👉 Background: We all know that bitcoin was started back in 2008 by the mysterious Satoshi Nakomoto. Since then, we've seen the launch of ethereum, XRP, Dogecoin and millions of other meme coins. But one of the most practical types of digital currency? Stablecoins.

‍👉 What happened: Despite the fact that Donald Trump once said that crypto was “based on thin air”, he’s now gone full Web3. In fact, Trump has signed the first major crypto legislation in US history, called the GENIUS Act. He also claimed the Act was “named after me”. Gotta love his modesty.

👉 What else: One of the key focuses of the GENIUS Act is regulating stablecoins. As part of the new legislation, stablecoins must be backed 1:1 with cash or short-term US government debt. This opens the door for private companies to issue digital dollars and potentially use them in real-world scenarios like payments, payroll, and even savings.

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‍What's the key learning?

‍💡Stablecoins are a type of cryptocurrency designed to hold a steady value. Unlike Bitcoin or Ethereum, stablecoins are backed by actual assets with a 1:1 ratio.  

💡For example, if $1 USDT stablecoin was purchased, then $1 in real-world assets, like cash or short-term US government debt must be held in reserve to back it.

💡Stablecoins have been booming this year, even before the legislation. In fact, the total market cap of stablecoin right now is $245 billion USD which has jumped over 20% in market cap so far this year. But, with federal regulation now in place, stablecoins could be used more broadly in traditional finance because banks and institutions will have a clearer rulebook.