By W.B. King
One of President Donald Trump’s campaign promises was to make the United States the “crypto capital of the world.” On January 23, 2025, he took a major step in that direction by issuing the following executive order: Strengthening American Leadership in Digital Financial Technology.
Section One of the missive reads: “The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership. It is therefore the policy of my administration to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy, including by:
Protecting and promoting the ability of individual citizens and private-sector entities alike to access and use for lawful purposes open public blockchain networks without persecution, including the ability to develop and deploy software, to participate in mining and validating, to transact with other persons without unlawful censorship, and to maintain self-custody of digital assets;
Promoting and protecting the sovereignty of the United States dollar, including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide;
Providing regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries, all of which are essential to supporting a vibrant and inclusive digital economy and innovation in digital assets, permissionless blockchains, and distributed ledger technologies; and
Taking measures to protect Americans from the risks of Central Bank Digital Currencies (CBDCs), which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the United States.”
GENIUS Act
In conjunction with his executive order, President Trump double-downed on this stance by announcing the launch of his “memecoin” also branded as “$TRUMP.” While the president said this was a move to support the payment platform, others questioned him on ethical grounds. Danielle Brian, head of the watchdog group Project on Government Oversight, told Reuters this was a “a blatant financial conflict of interest on behalf of the president...it is deepening his engagement in a world that raises real national security concerns.”
The Trump Administration didn’t respond to the noted backlash, which was echoed by some, but not all, political opponents, including U.S. House Financial Services Committee top Democrat Maxine Waters (Calif.). “Anyone globally, even individuals who have been sanctioned by the U.S. or banned from our capital markets, can now trade and profit off of $TRUMP through various unregulated platforms,” she said in a statement.
While there has been stablecoin bills introduced on Capitol Hill in recent years, one put forth recently by Tennessee Republican Senator Bill Hagerty, the Guiding and Establishing National Innovation in U.S. Stablecoins (GENIUS) Act, might draw broader support, including the Senate Banking Committee’s new chairman, Tim Scott (R-SC), and the head of its digital assets subcommittee, Wyoming Republican Senator Cynthia Lummis.
According to Hagerty, the legislation has benefited from extensive consultation with industry participants, academic experts, and federal government stakeholders. “From enhancing transaction efficiency to driving demand for U.S. Treasuries, the potential benefits of strong stablecoin innovation are immense,” he said. “My legislation establishes a safe and pro-growth regulatory framework that will unleash innovation and advance the President’s mission to make America the world capital of crypto. I look forward to working with Chairman French Hill and the House Financial Services Committee to get it to the President’s desk and signed into law.”
As explained by Hagerty, the GENIUS ACT:
Defines a payment stablecoin as a digital asset used for payment or settlement that is pegged to a fixed monetary value;
Establishes clear procedures for institutions seeking licenses to issue stablecoins;
Implements reserve requirements and light-touch, tailored regulatory standards for stablecoin issuers;
For issuers of more than $10 billion of stablecoins, applies the Federal Reserve’s regulatory framework to depository institutions and the Office of the Comptroller of the Currency’s framework for nonbank issuers;
Allows for state regulation of issuers under $10 billion in market capitalization and provides a waiver process for issuers exceeding the threshold to remain state-regulated; and
Establishes supervisory, examination, and enforcement regimes with clear limitations.
Removing Crypto Resistance
Federal Deposit Insurance Corporation (FDIC) Acting Chairman Hill also issued a statement in late January 2025, sending a clear message that the agency is investigating and pursuing blockchain and/or distributed ledger technologies for interested financial institutions.
“Upon becoming Acting Chairman, I directed staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services. While this review remains underway, we are releasing a large batch of documents today, in advance of a court-ordered deadline of Friday,” he noted. “Our decision to release these documents reflects a commitment to enhance transparency, beyond what is required by the Freedom of Information Act (FOIA), while also attempting to fulfill the spirit of the FOIA request.”
The 175-page FDIC document relates to its supervision of banks that engaged in, or sought to engage in, crypto-related activities, he explained.
“Previously, the FDIC released 25 so-called ‘pause’ letters sent to 24 institutions interested in pursuing crypto- or blockchain-related activities,” Hill said. “The documents released today include additional correspondence with those 24 institutions and correspondence with additional institutions beyond those 24.”
Hill noted that the 24 banks that expressed interest in pursuing crypto-blockchain were “almost universally met with resistance, ranging from repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity.”
These actions and measures, he added, made it “extraordinarily difficult—if not impossible” for banks to move forward. “As a result, the vast majority of banks simply stopped trying.”
Support Across the Aisle
New York U.S. Senator Kirsten Gillibrand is among Democrats supporting the GENIUS Act. “Passing clear and sensible regulations for stablecoins is critical to maintaining U.S. dollar dominance, promoting responsible innovation, and protecting consumers.”
She continued. “The bipartisan Guiding and Establishing National Innovation for U.S. Stablecoins Act protects consumers by requiring stablecoin issuers to maintain one-to-one reserves; prohibiting algorithmic stablecoins; and requiring issuers to comply with U.S. anti-money-laundering and sanctions rules. Importantly, it will empower responsible innovation, maintain U.S. leadership in digital assets and blockchain technology, and keep crypto companies and jobs onshore. The future of stablecoins and cryptocurrency has strong bipartisan support—I’m proud to introduce this bill with Senators Hagerty, Lummis and Scott, and look forward to working together to pass this important legislation.”
As Lummis views it, a bipartisanship regulatory framework will allow the U.S. to maintain “dollar dominance,” while promoting innovation. “I’m proud to support Sen. Hagerty’s important legislation, which goes a long way towards protecting Wyoming’s regulatory framework for digital assets, and ensures stablecoin issuers have a real choice when it comes to a state or national charter.”