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The US Treasury has started to implement the GENIUS Act by issuing a formal request for feedback from the public on 18 August 2025. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is aimed at the regulation of stablecoins, but will serve a far broader purpose in relation to digital assets in general and the broader markets that it affects.
Interested parties have until the 16th of October 2025 to provide feedback. Specifically, feedback on the techniques or considerations that specific institutions may deploy to detect criminal or illicit activity in the cryptocurrency industry.
Public Input Will Help Shape Stablecoin Regulation
The Treasury needs input around the use of APIs for data sharing, digital identity verification (KYC), AI monitoring of suspicious activity, and blockchain tracing for illicit transactions. Contributions from developers and interested parties in industries such as iGaming, that already make use of such security methods, will be especially valuable.
For example, insights from the routine use of KYC checks and crypto payment integrations in gambling sites available in Arizona could serve as use cases for the coming regulations. In fully regulated iGaming sites, there are usually clear rules and wagering terms, and seamless payment systems that cater to methods like crypto, illustrating an equilibrium of innovation and regulation in a thriving industry.
Open communication between the public and private sectors is also critical to ensure stablecoins are developed to work in everyone’s favor. The aim of the public call is also to gain insights to determine costs, risks, and cybersecurity issues of different tools that will be applied in the regulation of “payment stablecoins”.
Promoting Innovation While Adding Guardrails
The passing of the GENIUS Act and the potential passing of a broader crypto industry bill later this year mark a significant step toward the integration of digital assets and blockchain technology into mainstream finance in the US. The Act is part of Trump’s broader ambition of making the US the “crypto capital of the world” by integrating stablecoins into mainstream finance.
The GENIUS Act is a milestone piece of legislation as it’s the first time ever that an attempt of this scale has been made by the US Congress to regulate the crypto industry, and it contains three significant provisions for Stablecoin issuers. Issuers are limited to financial institutions approved by the Federal Reserve; must hold one-to-one reserves in liquid assets for any stablecoins issued; and comply with the Bank Secrecy Act, thereby implementing protection against money laundering and the financing of terrorism to bolster consumer protection.
By providing much-needed certainty, the GENIUS Act may create fresh positive sentiment for the Stablecoin space from established financial institutions. It will also likely result in an increase in the number of Stablecoin issuers. Currently, the Stablecoin market is dominated by Tether (USDT) and Circle (USDC). More issuers will increase competition in this growing market segment, potentially creating higher standards and wider adoption.
Some worry that the hype in the wake of stablecoin integration could create chaos in the US. If panicked customers follow the trail of which treasuries back stablecoins and sell in a frenzy, prices could freefall. This could have a ripple effect on interest rates, other financial markets, and ultimately destabilize the US economy as a whole.
Beyond Stablecoins
According to the World Economic Forum, the usage of stablecoin and its impact are growing rapidly. Since the end of July last year, usage has increased by 28%, with transaction volumes greater than that of Visa and Mastercard combined. Yet fewer than 10 major economies around the world have adopted stablecoin-specific legislation.
Trump’s move toward the regulation of stablecoins in the US is part of a growing global trend spanning several jurisdictions. For example, in December 2024, the European Union signed its Markets in Crypto-Assets Regulation (MiCA) act into effect. More recently, in May 2025, Hong Kong passed its Stablecoin Ordinance legislation.
Beyond stablecoins, more comprehensive regulation is needed in other areas of the digital assets ecosystem, which includes decentralized finance (DeFi) and broader crypto assets. The US continues to pursue regulations, including another proposed piece of legislation, that would seek to bring clarity to the edification of the broader crypto market.
As digital asset adoption continues to surge around the world, the emphasis will be on consumer protection, global standards for stablecoin regulation, and public-private collaboration to ensure consistent regulation.
