What is the story about?
Donald Trump once dismissed cryptocurrencies outright. In 2019, he said digital currencies were “not money” and “based on thin air.” Six years later, that
view has flipped completely. In the first year of his second term as US president, Trump has moved faster than expected to reshape how money flows in the American financial system, with crypto at the centre of that shift.
What Changed Trump’s Mind on Crypto?
The change has been both political and personal. Since leaving office after his first term, Trump’s family wealth has become deeply tied to digital assets. Crypto ventures linked to the Trump brand, including tokens and blockchain projects, have turned into major money-makers.
Also Read: This Crypto Firm Was Under Investigation Until 2024. Now It’s Doing Business With the Trump Family
At the same time, Trump’s second administration has openly embraced crypto - more than any US government before it.
The GENIUS Act: A Turning Point
The most important move came in July, when Trump signed the GENIUS Act, a law that regulates stablecoins, digital tokens pegged to the US dollar.
The law gives stablecoins legal clarity and opens the door for them to be used widely by banks, companies and consumers. That single step has already changed the market.
Stablecoins Move Into the Mainstream
Stablecoins like USDC, issued by newly listed Circle Internet Group, are already widely used by crypto traders. Now, big Wall Street banks are stepping in. Banks such as JPMorgan and Citigroup are expanding their involvement in stablecoins and similar digital products, a Bloomberg report said
According to the Citi Institute, the global stablecoin market could grow to $4 trillion by 2030, up from around $310 billion today, the report added.
That growth potential has also pushed Tether, the world’s largest stablecoin issuer, to announce plans to enter the US market.
New Crypto Billionaires Are Emerging
The boom is creating enormous wealth. After Circle’s public listing, co-founder Jeremy Allaire saw his personal wealth surge to more than $5 billion in June.
Meanwhile, Tether Holdings is reportedly seeking a $500 billion valuation in private markets, according to Bloomberg. If successful, that would make its chairman worth nearly $224 billion, more than Warren Buffett.
Why Small Banks Are Worried
Not everyone is celebrating. Small banks fear that stablecoins could pull money out of traditional bank deposits. People may move their savings into stablecoins to earn higher returns.
Economists at the American Bankers Association warn that in a worst-case scenario, up to 10% of bank deposits could shift into stablecoins. That could raise banks’ funding costs by 30 basis points and reduce lending.
The Fed Sees a Different Outcome
The Federal Reserve is less alarmed. In a recent research note, the Fed said stablecoins could actually increase bank deposits, especially if demand comes from overseas and if stablecoin issuers keep their reserves within the US.
The GENIUS Act also ties stablecoins closely to US government debt.
Under the law, stablecoin issuers must hold reserves on a 1:1 basis, and US Treasuries are explicitly allowed as backing.
Treasury Secretary Scott Bessent said demand from stablecoins would increase appetite for US government debt and expand use of the US dollar worldwide.
The law favours short-term Treasuries, requiring issuers to hold government debt with a remaining maturity of 93 days or less.
What Comes Next
Trump’s crypto pivot has already changed the US financial markets. Stablecoins are moving from the fringes into the core of banking, government debt markets, and global payments.
If projections hold, Trump’s second-term gamble on crypto could help redraw how money, banks and the dollar itself work — not just in the US, but across the world.
