The United States Congress has enacted a new law that establishes a legal framework for regulating stablecoins. This marks the first legislation of its kind in the country’s history.

According to BBC, the new act, known as the Genius Act, outlines key principles for stablecoins, which are a type of cryptocurrency backed by stable assets like US dollars. The bill received support from a majority of Republicans and some Democrats.

Donald Trump, who is currently gaining backing from the cryptocurrency sector, is expected to sign the bill by the end of the week. The president, who previously expressed skepticism towards cryptocurrencies, now has business ties with companies in this sector.

The provisions of the law require stablecoin issuers to back their coins with reliable assets on a one-to-one basis. The law also aims to ensure that the US does not fall behind other countries that are already implementing digital payment solutions.

However, some experts caution about potential risks. "This represents a fundamental misunderstanding of the risks associated with these financial instruments," stated a coalition of consumer and civil rights groups in a letter to Congress. They warn that consumers might mistakenly perceive stablecoins as safe financial tools.