Trump Backs GENIUS Act to Boost Dollar with Stablecoins

- Trump administration promotes GENIUS Act to regulate stablecoins and reinforce the U.S. dollar. - Growing international support for non-dollar stablecoins poses a challenge to the dollar's dominance. On July 10, 2025, the U.S. government, under President Donald Trump, began prioritizing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act as a key effort to maintain the international dominance of the U.S. dollar. This follows the Senate's passage of the legislation on June 17, 2025, which aims to counter growing competition from innovative foreign financial systems, including non-dollar stablecoins and blockchain-driven alternatives. The GENIUS Act introduces a robust regulatory framework for dollar-backed stablecoins, mandating that issuers maintain 1:1 reserves in high-quality assets like U.S. dollars or short-term treasuries. In addition, the act explicitly prohibits reserve commingling and requires issuers to comply with anti-money laundering protocols, including the ability to freeze and seize assets on lawful orders. Treasury Secretary Scott Bessent and "Crypto and AI Czar" David Sacks have emphasized that such stablecoins could meet the rising demand for U.S. dollars in developing nations grappling with inflation and currency instability. Although President Trump has urged the House of Representatives to pass the GENIUS Act swiftly and without amendments, the bill's trajectory remains uncertain. Lawmakers are currently debating how to reconcile it with the House’s competing STABLE Act, as the two bills have notable differences in enforcement focus and jurisdictional authority between state and federal entities. This legislative push faces significant challenges amid growing international preference for alternative stablecoin initiatives. For instance, three major institutions in Abu Dhabi are collaborating to launch a dirham-pegged stablecoin, which is awaiting regulatory approval. Meanwhile, Italy's finance minister has raised concerns about the systemic risks posed by U.S. dollar stablecoins. Furthermore, the BRICS nations also threaten the dollar's hegemony as they advance toward a multipolar financial landscape that uses multiple fiat currencies for trade. The House of Representatives is expected to vote on the GENIUS Act and other crypto-related bills in mid-July. This pivotal decision will shape the future regulatory landscape for stablecoins and will either reinforce or diminish the U.S. dollar’s role in global markets. As of 18:09 UTC on July 10, leading dollar-backed stablecoins showed minor price fluctuations. PayPal USD (PYUSD) held steady at $1, with its 24-hour volume changing by 0.2%. Tether USDt (USDT) traded at $1.001, with a 0.07% rise in trading volume, while USDD (USDD) was also priced at $1.001, with a 0.065% increase. USD Coin (USDC) maintained its parity at $1, showing a slight 0.029% uptick in trading volume.