In the continuous evolution of the crypto market, stablecoins have always played a crucial role.
With the U.S. Senate's procedural vote to pass the GENIUS Act (2025 U.S. Stablecoin Innovation and Establishment Act), the stablecoin market has welcomed a new regulatory framework.
This bill not only guarantees the legitimacy and security of stablecoins but also paves the way for the future development of the crypto market. This article will delve into the content, impact, and future development directions of the GENIUS Act.
|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 aspects of the bill include:
Reserve Requirements:
Stablecoin issuers must be 100% reserve-backed.
Reserve assets must be high liquidity assets such as U.S. dollars and short-term U.S. government bonds, and the reserve composition must be disclosed monthly.
Regulatory Tiering:
Large issuers with a market capitalization exceeding $10 billion (such as Tether and Circle) must accept direct supervision from the Federal Reserve System or the Office of the Comptroller of the Currency (OCC).
Small issuers can be regulated by state authorities.
Transparency and Compliance:
Prohibition of misleading marketing (such as claiming that stablecoins are backed by the U.S. government)
Require issuers to comply with anti-money laundering (AML) and know your customer (KYC) regulations.
Issuers with a market capitalization exceeding $50 billion must undergo an annual audit of financial statements to ensure transparency.
These regulations indicate that the U.S. attitude towards stablecoins is actually friendly, but on the condition that stablecoins must be backed by U.S. dollars and meet transparency requirements.
|Impact of the Bill and Market Reactions
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 reacted enthusiastically to this bill, 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 provides assurance for the compliance and development space of stablecoins, attracting more traditional companies to enter.
The market hopes that the entry of incremental funds can bring a "flood of liquidity" to 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, believing there is a conflict of interest.
After revisions, the bill added restrictions on large tech companies, alleviating some concerns among lawmakers, and ultimately passed procedural voting in the Senate.
|Benefits and Adjustments of Crypto Assets
The core provisions of the GENIUS Act directly affect the stablecoin ecosystem and, through chain reactions, impact the entire crypto market.
This regulatory framework will not only reshape the stablecoin industry but also impact 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 beneficial for centralized stablecoins. These stablecoins already generally meet the requirements, and clear regulation will attract more institutional funds, expanding their use in trading and payments.
USDT (Tether):
USDT is the largest stablecoin by market capitalization, with approximately 60% of its reserves in U.S. short-term government bonds and 40% in cash and cash equivalents.
The GENIUS Act requires that reserve assets be primarily U.S. Treasuries, which Tether fully complies with, and its transparency measures also meet the bill's requirements.
However, the use of USDT has always had a gray market aspect, and how to adjust operations to comply with regulations is a question that needs to be considered next.
USDC (Circle):
USDC's market capitalization is approximately $60 billion, with 80% of its reserves in short-term U.S. government bonds and 20% in cash.
Circle has registered in the U.S. and actively cooperates with regulators, and its reserves fully comply with the bill's requirements.
The passage of the bill may make USDC the preferred stablecoin for institutions, especially in the DeFi space, and 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 on reserve assets may pose challenges for DAI, but if MakerDAO increases the proportion of U.S. Treasury 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 crypto market but also provides a new path for the continuation of U.S. dollar hegemony. By supporting the development of stablecoins, the U.S. has extended the global influence of the dollar in a digital manner without increasing the Fed's liabilities.
Regulatory requirements that stablecoins must hold U.S. short-term government bonds as reserves have found new buyers for U.S. Treasuries.
"This policy is also a double-edged sword"
While it brings opportunities, the high dependence on U.S. Treasuries, potential suppression of DeFi innovation, and uncertainties in global competition may pose risks in the future.
For the crypto market, the advancement of the GENIUS Act may pave the way for broader crypto market legislation and promote the integration of the crypto industry with traditional finance.
The normalization of the stablecoin market will attract more participation from traditional financial institutions, injecting new vitality into crypto assets.
