Trump takes victory lap over signing stablecoin bill he championed
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President Trump arrives for a signing ceremony for the GENIUS Act in the East Room of the White House on July 18. Photographer: Al Drago/Bloomberg via Getty Images
President Trump took a step Friday toward his goal of giving the crypto industry clear rules of the road when he signed into law legislation establishing a regulatory framework for stablecoin issuers.
Why it matters: The GENIUS Act is the first piece of legislation regulating the cryptocurrency industry to be enacted in the U.S.
- "The GENIUS Act. They named it after me, you know," Trump joked Friday during a White House signing ceremony. He called the bill signing "a massive validation" of the crypto industry.
- The president thanked leaders from many of the biggest crypto companies who were present for the ceremony.
- "I pledged that we would bring back American liberty and leadership and make the United States the crypto capital of the world, and that's what we've done," Trump said.
Catch up fast: The legislation passed the House 308-122 on Thursday after Trump and GOP leaders overcame opposition from a group of hardline Republicans.
- It passed the Senate in June by a vote of 68-30.
The big picture: Stablecoins are cryptocurrencies that represent $1 worth of deposits, usually in cash or short-term treasuries.
- Users can use them to make very rapid, low-cost transactions, that settle nearly instantly (which can be important for large, overseas transactions).
- Stablecoins could allow retailers to keep as much of a customer's payment as cash does, whereas credit and debit card payments seriously cut into margins.
- "The emergence of dollar-based stablecoins has really introduced quite a lot of new ways of moving money that don't take bank holidays," Dante Disparte, global head of policy at Circle, the U.S.'s largest existing stablecoin issuer, told Axios before this week's House action.
Friction point: The Trump family's considerable personal investments in cryptocurrency led Democrats to warn about the risks for a conflict of interest with the White House.
- The president's family has launched its own stablecoin, USD1, through World Liberty Financial, a firm that sends most of its profits to the Trump family. The company has a market cap of $2.2 billion.
- Stablecoin issuers profit largely off the earnings on reserve funds backing their stablecoins — which can be substantial in a high interest-rate environments like the current one.
- That sets World Liberty Financial up to hold onto interest earned on more than $2 billion of reserves.
Yes, but: That hasn't stopped the president from pushing for lower interest rates.
Zoom out: "This the first step in deep crypto legislating. And it shows that Congress can still do big policy," former House Financial Services Chair Patrick McHenry, now an advisor to real-world assets startup Ondo Finance and to the venture firm Andreessen Horowitz, tells Axios.
- "Which is a nice and reassuring thing," McHenry added.
- "We spent an enormous amount of time trying to negotiate an outcome like we just had," he said, referring to his time as chairman.
What we're watching: Despite consistent objections by Democrats to the president's continued crypto interests, the minority party has turned out in large numbers for the final votes in each chamber.
- McHenry cited that as evidence that crypto will be an area ripe for bipartisan compromise going forward.
