In June 2025, the U.S. Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), marking a pivotal moment in crypto and digital assets. The bill creates a clear framework for USD-pegged stablecoins, requiring 1:1 backing with liquid assets such as U.S. dollars or short-term Treasury bills under 93 days. The bill mandates segregated reserves, regular audits, and transparency for large issuers. This bill is proof that stablecoins, and crypto at large, are moving into the mainstream of the U.S. financial system. The House is expected to pass the bill and President Trump has said he will sign it before Congress recesses in August.
While this legislation may be good for mainstream adoption, with companies like Fiserv, Apple, and Airbnb are preparing stablecoin integrations, it’s also important to consider the implications of political entanglements with crypto. President Trump, as well as both of his sons, have championed crypto and have become involved in various ventures. Trump recently disclosed $57 million in personal income from World Liberty Financial (WLF), a crypto firm that issues the USD1 stablecoin. The Trump family reportedly owns 60% of WLF, which has attracted $2 billion in foreign investment, including funds from Abu Dhabi and Chinese billionaire Justin Sun. While it seems that having the support of big names is good for the crypto space, it does trigger some concerns. Do we want government this entrenched in crypto?
At the same time, stablecoins have had a range of serious issues. The most prominent example is still the 2022 collapse of TerraUSD (UST), an algorithmic stablecoin whose failure triggered a $60 billion meltdown across the crypto market. Terraform Labs founder Do Kwon has been charged with fraud by the SEC and was arrested in Montenegro in 2023. Tether (USDT), the largest stablecoin by market cap, has also faced scrutiny. In 2021, the Commodity Futures Trading Commission fined Tether $41 million for falsely claiming its tokens were always fully backed by U.S. dollars. Tether still hasn’t undergone a full, independent audit, which leaves concerns about its reserves unresolved. Tron’s stablecoin, USDD, has also lost its peg multiple times between 2022 and 2023. Even stablecoins considered more reputable, like Circle’s USDC, have encountered trouble. In March 2023, USDC briefly dropped to $0.87 after the collapse of the Silicon Valley Bank, since $3.3 billion of its reserves were held there. Though the peg was quickly restored, the incident illustrated how traditional banking risks affect the stablecoin ecosystem.
These are just a few examples of how regulation is both necessary and complex. The GENIUS and STABLE Acts represent steps toward building consumer trust and financial stability, but the political backdrop raises questions of their impartiality. Critics argue that these laws may be well-intentioned, but could be used to further the interests of political elites or favored corporate partners. In response to these issues, lawmakers have introduced proposals like the MEME Act (Modern Emoluments and Malfeasance Enforcement), which would bar public officials from personally profiting off of cryptocurrencies during or shortly before holding office. For the crypto community, this is a critical moment. Regulation offers the opportunity to legitimize stablecoins and protect consumers, but also presents the risk of power consolidation and regulatory capture.
These are all important things for those in crypto to consider. Oversight must be shaped by transparency, fairness, and decentralization not influencers. Even if those influencers are the president. Stablecoins are too important to leave in the hands of unchecked power. The very ethos of crypto demand that regulation be implemented in a way that strengthens the foundations of the ecosystem. We cannot sacrifice open access, neutrality, and decentralization for a photo opportunity and short-term gains.