The U.S. Senate is moving ahead with regulating the new stablecoin industry with the progress of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, i.e, GENIUS Act. The goal of the bipartisan bill is to provide a clear regulatory path for stablecoins, which are digital currencies linked to conventional assets like the US dollar. While the bill finds favor due to its ability to stabilize the crypto market and support the financial system of the U.S., it also draws criticism on account of President Donald Trump’s family’s strong association with cryptocurrency activities, and there is fear about the conflict of interest.
A Step Towards Stablecoin Regulation with the GENIUS Act
By mandating stringent reserve requirements, regular audits, and complete collateralization with liquid holdings like US Treasuries, the GENIUS Act seeks to establish systematic regulation for stablecoin issuers. As long as they abide by the rules, the bill permits stablecoins to be issued by banks and non-bank organizations.Supporters of the bill say the regulatory clarity will validate stablecoins, bolster consumer protection, and bring these digital assets into the mainstream financial system.
President Trump’s lead crypto advisor, David Sacks, highlighted the financial gains of the bill, which he said could unleash trillions of demand for US Treasuries by creating legal certainty for the stablecoin market. “We’ve already got more than $200 billion in stablecoins—it’s just not regulated,” Sacks said. “I think we can generate trillions of dollars in demand for our Treasuries virtually overnight if we can provide the legal framework and clarity for this.”
Trump Crypto Ventures: A Contentious Issue
The Trump family’s cryptocurrency business has sparked ethical questions amid legislative developments. The USD1 stablecoin was introduced in March 2025 by World Liberty Financial (WLFI), a cryptocurrency company that was partially owned by the Trump family and co-founded by Trump’s sons. USD1 is fully secured by cash and U.S. government bonds, and BitGo provides custody services. The stablecoin gained momentum fast, achieving a market capitalization of more than $2 billion in two months since its inception.
Interestingly, Abu Dhabi-based investment company MGX made a $2 billion investment in Binance, the largest crypto exchange in the world, payable in USD1. The transaction, which was made possible by WLFI, has made USD1 a significant player in the stablecoin market. However, given that the Senate is still debating the GENIUS Act, the Trump family’s present participation in such widely reported cryptocurrency transactions has raised questions regarding conflicts of interest.
Ethical Issues and Political Consequences
Democratic lawmakers have been concerned with the entwining of Trump’s political power and his family’s crypto initiatives. Senator Elizabeth Warren condemned the MGX-Binance transaction, saying, “A dodgy fund with a foreign government backing just announced it will make a $2 billion deal using Donald Trump’s stablecoins. Meanwhile, the Senate is set to pass the ‘GENIUS’ Act—stablecoin legislation that will make it simpler for the President and his family to fill their own pockets.”
Compounding the issue, Senator Josh Hawley added an amendment to the GENIUS Act capping credit card interest at 10%. Opponents argue that this “poison pill” threatens to undermine the legislation by alienating financial stakeholders and deflecting attention from the bill’s main objective of regulating stablecoins.
