Congress Approves Stablecoin Bill; Crypto Market Breaks $4 Trillion

The global cryptocurrency market reached $4 trillion in value this week following new trading highs in Bitcoin, Ethereum, and other major tokens. The gains came after the U.S. Congress passed the first federal law regulating stablecoins, a form of cryptocurrency linked to the U.S. dollar.

Bitcoin rose as high as $123,205 earlier this week before moving back to $119,570 by Friday afternoon. Ethereum climbed 22% over the past five days. Uniswap gained 24% on Friday, while Solana rose 6.5% during the day.

Bitcoin continues to represent about 60% of the cryptocurrency market, according to exchange data.

U.S. Passes Stablecoin Rules for First Time

The U.S. House of Representatives approved the Stablecoin Transparency and Oversight Act this week. The law requires companies that issue stablecoins to maintain full reserves in cash or short-term Treasury assets. Issuers must submit to audits and register with either federal or state regulators, depending on their structure.

Stablecoins are used as trading pairs on most cryptocurrency exchanges. They allow traders to move funds between crypto assets without converting back to traditional money. Tokens like Tether (USDT) and USD Coin (USDC) have become central to daily transactions in crypto markets, with a combined circulation of more than $200 billion.

Lawmakers said the measure was necessary to prevent a repeat of the 2022 TerraUSD collapse, which wiped out billions of dollars when the token lost its dollar peg. Under the new law, all stablecoins must be backed one-to-one with cash or near-cash assets to avoid similar failures.

Several U.S. banks and payment companies have signaled plans to enter the stablecoin market once the legal framework is in place. The current stablecoin market is valued at around $265 billion, but financial analysts expect that figure to grow as regulated products enter the space.

New Crypto Rules Define Token Classifications

Congress also passed a second measure this week setting definitions for cryptocurrencies under U.S. law. The bill outlines how tokens will be classified for trading, taxation, and regulatory oversight. It sets guidelines for exchanges, custodians, and issuers.

The bill clarifies whether certain tokens are treated as securities or commodities, an issue that has slowed crypto industry growth in the U.S. due to legal uncertainty. The Senate has not yet voted on the bill.

ETFs and Options Trading See Heavy Use

Investors continue to move funds into cryptocurrency-linked exchange-traded funds. Bitcoin ETFs attracted $5.5 billionin new investments this month. Ethereum ETFs brought in $2.9 billion, according to fund tracking data.

Bitcoin options trading shows large open positions at the $130,000 strike price for contracts expiring in early August, based on data from Deribit. Options traders are using these contracts to manage risk or position for further price movement.

Crypto Market Growth Accelerates

The cryptocurrency market was valued at less than $500 billion five years ago. It now stands at over $4 trillion. Bitcoin remains the largest single asset in the sector, but more trading has shifted toward blockchain platforms such as Ethereum and Solana.

Tokens linked to decentralized exchanges, payment systems, and blockchain networks are seeing increased trading volume as crypto markets adjust to new regulations and institutional demand.

With the stablecoin law now passed and token classification rules moving through Congress, the crypto sector is moving into its next phase of development with clearer legal guidelines.

Also Read: U.S. House of Representatives Prepares to Pass Stablecoin Law After Adding CBDC Ban to Secure GOP Votes