US President Donald Trump Signs GENIUS Act To Regulate Stablecoins

US President Donald Trump has signed the "Guiding and Establishing National Innovation for U.S. Stablecoins" (GENIUS) Act, which establishes the first federal regulations for Stablecoins. The Bill was signed on July 18, 2025, at the White House, in the presence of representatives of large crypto firms, such as Circle, Kraken, Gemini, Tether, and Coinbase. During the signing, Trump called the law a “massive validation” of the crypto industry. 

The GENIUS Act establishes strict guidelines for Stablecoin issuers. They will need to maintain a complete 1:1 reserve funded by cash or U.S. Treasuries. According to Cointelegraph, issuers will also be required to make public monthly reports, independent audits, and approval from state or federal regulators. Foreign Stablecoins will be prohibited unless subject to the same standards. A key rule in the law bans yield-bearing Stablecoins. This means issuers cannot pay interest or give direct returns to users. 

The law will take effect within 120 days, although regulators may take a maximum period of 18 months to complete all the rules. 

Incidentally, the GENIUS Act is the first of three major crypto bills passed this July, along with the CLARITY Act and the Anti-CBDC Surveillance State Act.

Analysts See DeFi Surge As GENIUS Act Ends Stablecoin Yields

The GENIUS Act, recently signed into law by President Donald Trump, has introduced a ban on yield-bearing Stablecoins. This means issuers can no longer offer interest or direct returns to holders, a move that could shift investor interest toward decentralised finance (DeFi).

According to experts, the law would drive users to use DeFi services, such as liquidity pools, which provide returns without depending on centralised issuers. Still, they warned that such platforms carry greater risk, including price volatility, hacks, and exploits in smart contracts.

However, some crypto industry players believe the move will push innovation and yield-seeking investors toward decentralised systems. Developers in the DeFi space will likely see this as an opportunity to attract new users and expand Ethereum’s ecosystem.

Bitcoin ETFs Raise Concerns Over Self-Custody Philosophy 

The emergence of Bitcoin exchange-traded funds (ETFs) is putting the original concept of self-custody of cryptocurrencies under threat, according to experts.

They said Bitcoin was conceived so that people could be in charge of their own money without banks or third parties. Yet with ETFs, investors are transferring the control of their Bitcoin to fund managers. This change has the potential to undermine the "not your keys, not your coins" philosophy that has long been at the heart of Bitcoin, Cointelegraph quoted an expert as saying.

According to analysts, while ETFs have brought Bitcoin to the attention of mainstream investors, they are also promoting centralisation. Big institutions managing the funds could potentially have their hands on large quantities of Bitcoin in contradiction to Bitcoin’s decentralised philosophy. However, ETFs will continue being in vogue because they are easy and backed by regulators, they said.