The United States legalized cryptocurrency: a legal breakthrough and Trump’s strategy for the private digital dollar

In 2025, the US enacted a legislative breakthrough in the digital asset sphere — President Donald Trump signed the so-called GENIUS Act, giving cryptocurrency comprehensive federal legal status for the first time. The fact that this happened less than six months into Trump’s second term demonstrates the administration’s systematic political will to make the US a financial and technological leader in the digital economy. Decisive priority is given to private stablecoins (“digital dollar”), not a state CBDC — and this is crucial for the future global financial architecture.

1. The New Law: What Exactly Is Legalized?
   The GENIUS Act provides legal regulation for stablecoins — digital currencies strictly backed by US dollars or government bonds, with 100% reserve coverage and monthly reserve audits. Private banks, fintech companies, and even tech giants (Amazon, Google, Facebook) can issue their own digital dollars as commercial products.
   Banks or non-bank providers are required to:

• fully back stablecoins with real dollars or securities;
• regularly disclose reserve structure;
• comply with AML/CFT requirements and obtain licensing;
• prevent tokens from changing status or losing backing.
  Importantly, the law prohibits launching a state-issued digital currency (CBDC) in the USA, preventing excessive government control over private finance and preserving the flexibility of the American financial system.

2. Reasons for the “Crypto Shift”: Politics and Strategic Interest
   Financial Leadership
   Trump and his team justify the new policy by arguing that preserving and strengthening the dominance of the dollar in the global financial system depends on embracing innovation. With growing competition from China and the EU, integrating a dollar-based cryptocurrency is a strategic step to avoid losing influence.

Economic Expediency
Launching private digital dollars allows:

• making international payments instant and cheap;
• integrating millions of unbanked consumers into the US financial system;
• increasing demand for dollar reserves, helping address debt issues.

New Tax and Legal Horizons
By legalizing the crypto business, the federal government receives not only new tax channels, but also tools to close “grey zones” of uncontrolled capital movement.

3. How Trump Is Pushing This and Who is Behind It

• Trump opposed launching a state CBDC, citing risks of excessive control, privacy threats, and potential disruption of the banking system;
• Alongside the GENIUS Act, the president signed an executive order to create a strategic reserve of bitcoin and other digital assets, recognizing them as state assets;
• Industry leaders, the Treasury, and the SEC participated in drafting the bill. Notably, the crypto sector gave Trump record election support in 2024, and company leaders were present at the signing.

4. Legal Analysis: Pros, Risks, Interest Balance
   Positive Aspects

• Legal certainty: cryptocurrencies move from the “grey zone” into a regulated framework.
• Consumer protection: full backing, transparency, and AML/CFT control reduce fraud and crash risks.
• Competition: allowing tech giants and banks to issue their own coins creates market competition that promises to cut consumer costs.

Risks and Issues

• Financial stability threats: potential for “bank runs,” as instant shifting of deposits to tokens in a crisis could destabilize banks.
• Regulatory arbitrage: a challenge for the SEC, CFTC, and Treasury to synchronize oversight of non-traditional issuers with banking standards.
• Political corruption: lobbying and campaign donations by the crypto sector create risks of biased regulation.
• Refusal of CBDC: may weaken the state’s ability to respond to future financial crises and compete with global central banks.

International Impact

• Strengthening the dollar against the digital yuan and future digital euro.
• Driving global liberalization of the crypto market — setting a US legal benchmark for others.

5. Why a Private Digital Dollar: Concept and Objectives
   Trump and his team chose the private digital dollar to:

• promote innovation through issuer competition;
• minimize political and government control risks;
• reinforce the dollar as the dominant global currency through stablecoin expansion beyond the US.

The rejection of a CBDC is enshrined in the GENIUS Act and justified by the need to prevent state overreach at the cost of privacy and decentralization.

6. Legal Prospects: User Protection Tools

• Stablecoin creditors and holders have clearly defined claims over reserve assets.
• The law provides for jurisdiction and class action lawsuits in case of violations.
• Consumers’ personal data remains protected (compared to state CBDCs), since companies aren’t required to store full transaction history.

7. Key Challenges for the Legal Community

• Oversight of private digital dollars, especially for anti-money laundering;
• Balancing innovation in the financial sector and prevention of systemic risks;
• Forming judicial practice for disputes in the digital asset market and defining evidentiary standards in crypto-related criminal cases.

Conclusion
The legalization of stablecoins and launch of the private digital dollar under Trump signifies a fundamental paradigm shift globally: from cautious marginalization of digital assets to their integration into the official global financial infrastructure. From a legal perspective this establishes new regulation practices, enhances investor and consumer protection, and boosts dollar competitiveness, but it also increases the need to monitor risks for banks and financial stability. The future will depend on a balance of policy, economics, and an evolving body of legal precedent.

Author: Ihor Yasko, Managing Partner of “Winner” Law Firm, PhD in Law.