In the ongoing evolution of the cryptocurrency market, stablecoins have played a crucial role.
With the U.S. Senate's procedural voting to pass the GENIUS Act (2025 U.S. Stablecoin Innovation Guidance and Establishment Act), the stablecoin market welcomes a new regulatory framework.
This bill not only provides assurance for the legitimacy and security of stablecoins but also paves the way for the future development of the cryptocurrency market. This article will delve into the contents of the GENIUS Act, its impact, and the future development direction of the cryptocurrency market.
| Core Content of the Stablecoin Bill
The GENIUS Act is the first comprehensive federal regulatory bill for stablecoins in U.S. history, aiming to provide legitimacy and security for the stablecoin market through a clear regulatory framework while consolidating the dollar's dominant position in digital finance. Key contents of the bill include:
Reserve Requirements:
Stablecoin issuers must be 100% reserve-backed.
Reserve assets must be highly liquid assets such as U.S. dollars and short-term U.S. Treasury bonds, with monthly public disclosures of reserve composition.
Regulatory Hierarchy:
Large issuers with a market value exceeding $10 billion (such as Tether and Circle) are subject to direct regulation by the Federal Reserve System or the Office of the Comptroller of the Currency (OCC).
Small issuers can be regulated by states.
Transparency and Compliance:
Prohibition of misleading marketing (such as claiming that stablecoins are backed by the U.S. government).
Issuers are required to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.
Issuers with a market value exceeding $50 billion are required to undergo annual audits of financial statements to ensure transparency.
These provisions indicate that the U.S. attitude towards stablecoins is actually friendly, provided that stablecoins are backed by U.S. dollars and meet public transparency requirements.
| Impact of the Bill and Market Reaction
The passage of the GENIUS Act marks the transition of the U.S. stablecoin market from 'wild growth' to regulation, filling a long-standing regulatory gap and providing certainty for the market.
The market's reaction to this bill has been enthusiastic, with DeFi and RWA sectors related to stablecoins leading the market.
According to Citibank's forecast, the global stablecoin market is expected to reach $1.6 to $3.7 trillion by 2030.
The passage of the bill ensures compliance and development space for stablecoins, attracting more traditional companies to enter.
The market expects the inflow of incremental funds to bring about a 'flooding' effect, injecting new liquidity into related crypto assets.
There will definitely be DeFi and RWA sectors involved.
However, the advancement of the bill has also raised some concerns.
Some Democratic lawmakers are concerned that the bill may benefit cryptocurrency projects associated with the Trump family, viewing it as a potential conflict of interest.
After revisions, the bill added restrictions on large tech companies, alleviating some lawmakers' concerns, and ultimately passed through procedural voting in the Senate.
| Benefits and Adjustments of Crypto Assets
The core provisions of the GENIUS Act directly impact the stablecoin ecosystem and ripple through the entire cryptocurrency market due to a chain reaction.
This regulatory framework will not only reshape the stablecoin industry but also influence multiple crypto sectors such as DeFi, Layer 1 blockchains, and RWA through the widespread application of stablecoins.
Centralized Stablecoin Issuers:
The reserve requirements and transparency regulations of the bill are most favorable to centralized stablecoins. These stablecoins already largely meet the requirements, and clear regulation will attract more institutional capital, expanding their use in trading and payments.
USDT (Tether):
USDT is the largest stablecoin by market value, with approximately 60% of its reserves in U.S. short-term Treasury bonds and 40% in cash and cash equivalents.
The GENIUS Act requires that reserve assets be primarily U.S. Treasury bonds, and Tether has fully complied, with its transparency measures also meeting the bill's requirements.
However, the use of USDT has long been associated with gray market activities, and how to adjust its business to comply with regulations is the next issue to consider.
USDC (Circle):
USDC has a market value of approximately $60 billion, with 80% of its reserves in short-term U.S. Treasury bonds and 20% in cash.
Circle has registered in the U.S. and actively cooperates with regulators, with its reserves fully compliant with the requirements of the bill.
The passage of the bill may make USDC the preferred stablecoin for institutions, especially in the DeFi space, where its market share is expected to further increase.
Decentralized Stablecoins:
Decentralized stablecoins like DAI and FRAX may face challenges.
The strict requirements of the GENIUS Act for reserve assets may pose challenges for DAI, but if MakerDAO increases its proportion of Treasury bond reserves, it could benefit from overall market growth.
| Macroeconomic Impact of the Bill
The passage of the GENIUS Act is not only a milestone for the cryptocurrency market but also provides a new path for the continuation of dollar hegemony. By supporting stablecoin development, the U.S. extends the global influence of the dollar in a digital way without increasing the Federal Reserve's liabilities.
The regulatory requirement that stablecoins must hold U.S. short-term Treasury bonds as reserves has found new buyers for U.S. Treasury bonds.
This policy is also a double-edged sword.
While presenting opportunities, its high dependence on U.S. Treasury bonds, potential suppression of DeFi innovation, and uncertainties of global competition may pose future risks.
For the cryptocurrency market, the advancement of the GENIUS Act could pave the way for broader cryptocurrency market legislation and promote the integration of the cryptocurrency industry with traditional finance.
The standardization of the stablecoin market will attract more participation from traditional financial institutions, injecting new vitality into crypto assets.