The GENIUS Act, which the U.S. Senate is voting on May 22, 2025, is paving the way for the legalization of stablecoins, promising to create a demand of trillions of USD for U.S. bonds. David Sacks, crypto advisor to President Trump, emphasized that this legal framework will strengthen the USD's position in the digital age. The article provides a detailed summary of the GENIUS Act, its impact on the stablecoin market, and lessons for investors in the USA and Japan.
The GENIUS Act and the potential of stablecoins
In an interview with #CNBC (May 22, 2025), David Sacks, White House advisor on crypto and AI, stated that the GENIUS Act will soon be passed, creating a clear legal framework for stablecoins. Currently, the stablecoin market has a capitalization of 248.6 billion USD (according to CoinGecko, May 22, 2025), with Tether (USDT) accounting for over 60% market share. Sacks predicts that if tightly regulated, stablecoins could boost demand for U.S. bonds by trillions of USD.
The GENIUS Act requires stablecoins to be fully backed by government bonds or USD-equivalent assets, subject to audits and anti-money laundering oversight, especially for large organizations like Tether and Circle ($USDC ). The U.S. Senate has passed the first procedural phase with 66 votes in favor, showing strong bipartisan consensus, especially in the U.S., where stablecoins are seen as a tool to maintain the dominance of the USD.
Impact on the crypto market
The GENIUS Act could scale the stablecoin market to 2.5 trillion USD, according to Bitwise CIO Matt Hougan. Tether currently invests 120 billion USD in U.S. bonds, surpassing Germany, and the act could attract significant capital flows from countries like Japan, where blockchain is strongly applied. However, some concerns about conflicts of interest arise, particularly related to the stablecoin $USD1 of World Liberty Financial, linked to the Trump family. Senator Elizabeth Warren questioned the transparency of USD1, which is backed by USD bonds and received a 2 billion USD investment from the MGX fund on Binance.
Nevertheless, Sacks emphasizes that stablecoins provide a fast, cheap, and efficient payment system, helping the U.S. maintain its advantage in the digital economy. Investors in Japan are also closely watching, as stablecoins could facilitate cross-border transactions.
Lessons for investors
The #GENIUS Act brings many lessons:
Understand the legal framework: Clear regulations will enhance the safety of stablecoins, but progress needs to be monitored.
Diversify your portfolio: Combine stablecoins (USDT, USDC) with assets like $BTC to reduce risk.
Follow reputable sources: Use Binance, CoinGecko to stay updated on market information.
Suggestions for investors
Learn about stablecoins and their role in digital finance.
Follow the progress of the GENIUS Act through sources like Binance.
Evaluate reputable stablecoin projects like USDT, USDC.
Risk warning
Investing in crypto, including stablecoins, carries high risks due to market volatility and legal changes. The information in this article is for reference only and is not investment advice. Please do thorough research (DYOR) before making a decision. #anhbacong