President Trump's GENIUS Act Induces Stablecoin Growth Despite Regulatory Hurdles in the US Cryptocurrency Market

President Trump Signs GENIUS Act, Brings Clarity to Stablecoin Regulation in the U.S.

On July 18, President Donald Trump brought long-awaited clarity to the growing U.S. market for dollar-pegged tokens, by signing the GENIUS Act into law. This Act was intended to establish the first comprehensive federal framework to regulate stablecoin.

Growth and Resilience of Stablecoin Market

The market for stablecoins worldwide has shown significant resilience and growth since the Act’s inception. Skeptics are finding it increasingly hard to dismiss its impact. Just over a month after being signed into law, regulations around how stablecoins must be backed, audited, and supervised gave renewed confidence to institutions and everyday investors. The stablecoin market cap saw an additional $18 billion growth, rising from $260 billion on July 18 to over $278 billion by Aug. 21. This represents almost a 7% increase in just over a month.

Regulations under the GENIUS Act

Senator Bill Hagerty (R-Tenn.) played a pivotal role in shepherding the GENIUS Act through Congress, which was passed with rare bipartisan consensus. This Act mandates that all payment stablecoins be backed one-to-one by low-risk assets, such as cash or U.S. Treasury bills. It also subjects these assets to monthly attestations by a Big Four auditor and ongoing Bank Secrecy Act obligations. The GENIUS Act also creates a tiered oversight regime. Issuers under $10 billion in market capitalization may operate under state supervision. However, crossing the $10 billion threshold triggers a mandatory shift to federal regulators, or alternatively, a temporary halt in new coin issuance until the cap recedes below the limit.

Growth of Stablecoin Market Since the GENIUS Act

Compared with the broader crypto market capitalization which sits just below $4 trillion, stablecoins have carved out a steadily growing niche, now accounting for roughly 6.8% of the total crypto market. Since the stablecoin legislation was signed into law on July 18, total stablecoin supply globally climbed by almost 7%. This is a notable acceleration compared to the 1% monthly drift observed in the first half of 2025. Standout performers include Tether’s USDT, the largest stablecoin by market cap. It alone added over $7 billion to its circulating supply, boasting a market cap of over $167 billion as of Aug. 21.

Emergence of Yield-Bearing Stablecoins

The strongest growth has been observed in yield-bearing stablecoins. ‘USDE’, the largest yield-bearing stablecoin, saw its supply increase by around $6 billion over the same period. This is an astonishing growth rate of 107%, from $5.6 billion to $11.6 billion. This growth was despite US legislation banning such products.

U.S. Based Issuers Also Experience Growth

Among stablecoins from U.S. issuers, PayPal’s PYUSD is the largest yield-bearing token with its supply growing 35%, from $885 million to $1.2 billion. Meanwhile, the largest U.S.-based stablecoin issuer, Circle, saw a 4% growth in its non-yield-bearing USDC from $64.8 billion to $67.5 billion.

Praise and Predictions for the Stablecoin Market

The GENIUS Act has been hailed as transformative, with Jeremy Allaire, co-founder and CEO of Circle, praising it as one of the most transformative pieces of legislation in decades. Sergey Nazarov, co-founder of blockchain oracle, Chainlink believes that the GENIUS Act could stimulate tech and financial institutions to launch their own stablecoins, potentially growing the market tenfold.

Regulatory Challenges and Global Developments in the Stablecoin Market

However, the Act comes with regulatory challenges for smaller issuers. Those with more than $10 billion in assets now need to either obtain a federal charter, a costly and lengthy process, or halt growth. Internationally, developments are also accelerating. The European Union’s MiCA regime and Hong Kong’s new stablecoin guidelines have developed in parallel to the U.S. model. This is causing global issuers to reassess compliance frameworks on a multi-jurisdictional basis.

Views on the Act from Industry Leaders

Amram Adar, co-founder, and CEO of Oobit, a Tether-backed stablecoin payments platform, sees the Act as a milestone that sends a clear message of acceptance towards digital dollars. However, he emphasized that regulation alone is not enough. There is a need to focus on the demand side, and facilitate spending through stablecoins. Gitay Shafran, founder of The Fedz, cautioned against complacency, stating that the Act is just the beginning of what’s needed for a resilient and decentralized financial system. He argued for the need for decentralized stablecoins and synthetic dollars that are not tied to a single company. These developments mark a new era in the stablecoin market, signalling greater acceptance, regulation, and growth potential for these digital assets. With United States at the forefront, stablecoins are gaining more legitimacy and are becoming an increasingly important part of the financial landscape.