$USD1 — The United States Senate

The GENIUS Act establishes regulatory standards for stablecoins, requiring issuers to back their tokens with reserves of assets such as US dollars or Treasury securities to reduce volatility and protect consumers.

It also mandates priority payment for coin holders in the event of bankruptcy and imposes compliance with anti-money laundering and anti-terrorism measures.

Although presidential approval is still weeks away, Deutsche Bank has released its assessment of the implications of the bill for markets, technology, and the dollar.

'Stablecoin legislation consolidates USD supremacy:' The GENIUS Act requires that all stablecoins be fully backed by low-risk liquid assets, such as short-term US Treasury securities, insured bank deposits, or physical dollars. Monthly reserve disclosures will be mandatory.

This framework enshrines practices already adopted by major players like Tether, whose USD-pegged coins represent over 61% of the market value of stablecoins.

According to analysts at Deutsche Bank, the regulation "formalizes the role of stablecoin issuers as almost money market funds," deepening their integration into the American financial system.

'Big Tech's stablecoin ambitions are limited:' Revisions to the bill block tech giants like Meta (NASDAQ:META), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN) from issuing stablecoins unless they meet strict criteria about financial risk, data privacy, and fair conduct.

'No interest-bearing stablecoins – but the market is growing:' The GENIUS Act prohibits interest or yield payments on regulated stablecoins.