The U.S. House has passed the GENIUS Act — short for Guiding and Establishing National Innovation for US Stablecoins — with strong bipartisan support. Backed by over 100 Democrats, the bill aims to stop Big Tech firms and major banks from taking over the U.S. stablecoin market.
The Act’s most talked-about feature is what some call the “Libra clause.” This is a direct response to Meta’s failed global stablecoin project, Libra. Circle’s Chief Strategy Officer, Dante Disparte, shared his insights on the Unchained podcast, saying the clause helps avoid another situation where one tech company tries to dominate global digital payments.
Standalone Entities Required for Stablecoin Issuers
Under the new rules, any non-bank that wants to issue dollar-backed stablecoins must set up a separate company. This standalone entity will need approval from a Treasury-led committee, which holds the power to reject proposals that may raise antitrust concerns.
Banks also face tight limits. If a bank wants to issue stablecoins, it must do so through a legally distinct subsidiary. These subsidiaries cannot lend money, borrow funds, or engage in risky investments. Disparte says this setup is even more conservative than plans from big players like JPMorgan.
“This law gives clear boundaries,” Disparte said. “In the long run, it protects U.S. consumers, market participants, and the value of the dollar.”
Interest-Bearing Stablecoins Banned
One of the more debated parts of the law is the ban on yield-bearing stablecoins. These are coins that pay interest, similar to a savings account. Critics argue the ban could slow innovation and drive users to foreign or decentralized platforms.
But Disparte disagrees. He believes stablecoins should serve as a reliable base layer first. Yield, he says, should come from DeFi — not from centralized firms. “Build trust in the foundation. Then let DeFi offer the yield.”
This could boost interest in decentralized platforms like Ethereum, where billions of dollars are already locked in DeFi protocols.
A Step Toward Mainstream Use
Despite the restrictions, many see the GENIUS Act as a win for the industry. It offers long-awaited regulatory clarity and a clear path for crypto firms to operate within U.S. law.
Stablecoins are already catching the eye of major companies. Amazon, Walmart, and others are exploring stablecoin payments. In fact, stablecoin transaction volume briefly beat Visa in 2024, according to Crypto News.
Frank Combay of Next Generation says that clear rules like these are unlocking stablecoin potential. “They can cut transaction costs by more than 90%. That’s huge for businesses and users.”
Ripple CEO Brad Garlinghouse recently predicted that the stablecoin market could grow from $250 billion to $2 trillion. With a firm legal framework in place, that future seems more within reach.
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