Banks Rush Into $264 Billion Stablecoin Market After Trump Signs New Law

The GENIUS Act, signed into law by President TRUMP on July 18, 2025, has established the first federal regulatory framework for fiat-backed stablecoins in the U.S. This landmark legislation triggered a $4 billion surge in the stablecoin market, pushing its total capitalization beyond $264 billion within just seven days.

Major financial institutions—Bank of America, JPMorgan, and Citigroup among them—are now mobilizing to enter the space. The law mandates strict reserve requirements: stablecoins must be fully backed by cash or short-term U.S. Treasuries, with monthly audits to ensure compliance. Algorithmic stablecoins face a two-year moratorium as regulators craft separate rules for this riskier category.

The bill's passage followed intense bipartisan negotiations, with consumer protections and anti-CBDC provisions added to secure support. Issuers must now choose between federal charters or state-level programs meeting federal standards—a structure designed to balance innovation with systemic stability.