US President Donald Trump has made it no secret that cryptocurrency is a major part of his economic plans, now looking to pass stablecoin legislation as part of this initiative.
Trump recently spoke via video at the Blockworks Digital Asset Summit in New York City this past weekend, becoming the first active President to appear at a blockchain-related event.
He told the audience that he has called on Congress to pass legislation regulating stablecoins in order to bring forth an “explosion of economic growth”.
“I’ve called on Congress to pass landmark legislation creating simple, common-sense rules for stablecoins and market structure,” Trump remarked.
“With the right legal framework, institutions large and small will be liberated to invest, innovate and take part in one of the most exciting technological revolutions in modern history.
“Pioneers like you will be able to improve our banking and payment system and promote greater privacy, safety, security and wealth for American consumers and businesses alike. You will unleash an explosion of economic growth.”
Stablecoins form part of Trump’s mission to establish the US as a global leader in crypto adoption and innovation. He set about putting this mission into action on 4 March, when he signed an executive order to create a strategic Bitcoin reserve.
With upwards of 200,000 BTC held in the reserve, used to stockpile and maintain store of value, Trump also confirmed that other cryptocurrencies, such as ETH, XRP, SOL and ADA will also become part of the wider crypto reserve.
While these cryptocurrencies have been growing in terms of adoption and popularity, they have yet to make their mark when it comes to being used as a payment facilitator, and this is where stablecoins come in.
The recent stablecoin boom
Stablecoins, a digital currency pegged to a fiat currency – like the US dollar – to maintain its value, have soared in popularity amongst large financial institutions in recent years.
With the ability to instantly send and receive settlements in seconds, stablecoins are being viewed currently as a use case for cross-border payments which are currently being developed by the likes of Visa through its collaborative approach with Solana through the use of USDC.
The growing interest in stablecoins has also seen major traditional finance players enter the market, with PayPal launching PYUSD and fintech firms such as Revolut also looking to launch its own native stablecoin.
Not only are the likes of Visa working on developing stablecoin payment use cases to test speed of transaction, but the digital currency is also a lot cheaper than traditional remittance services.
Past US stablecoin bill attempts
The regulation of stablecoins has been a topic of conversation around Congress in past years.
There are currently several bills drafted and have been discussed in Congress that have been pushed by the House Financial Services Committee during Joe Biden’s term as President.
However, due to the Biden administration’s cautious and even combative approach against crypto, the bills never advanced to anything meaningful, but Trump has already outlined his legislations in hope of passing law.
The GENIUS Act is the most prominent bill proposition from the Trump administration, seeking to clearly define stablecoins and their place within the wider US financial and payment systems.
Federal standards and practices are outlined in the GENIUS Act for stablecoin issuers, including a rule that states that only state-regulated stablecoin issuers are to issue stablecoins. There are also relevant rules around anti-money laundering and other consumer protection regulations.
