Author | Dingdang, Odaily Planet Daily
Recently, the stablecoin legislation (GENIUS Act) passed the Senate debate motion with 69 votes in favor and 31 against, officially entering the revision stage. Perhaps buoyed by this positive news, Bitcoin made a strong breakout past $110,000 after four months, setting a new historical high.
Currently, the global stablecoin market has surpassed $200 billion, gradually becoming a core pillar connecting traditional finance and the blockchain world. However, behind the prosperity lies significant issues—reserve transparency, systemic risk, and the long-standing absence of a regulatory framework.
Against this backdrop, the U.S. Senate Banking Committee has proposed the (GENIUS Act), which aims to set a systematic tone for this rapidly developing field. The bill requires stablecoin issuers to hold 1:1 high-quality reserve assets (such as U.S. Treasury bonds or cash) and prohibits stablecoins with interest-bearing characteristics to reduce potential financial risks. Previously, Odaily Planet Daily detailed the bill's specifics in an article titled "The GENIUS Act is Expected to Pass Through the Senate, Stablecoin Regulation Welcomes Historic Breakthrough"; interested readers can refer to it.
Now that the (GENIUS Act) has entered the revision stage, the sentiment in the crypto industry has also heated up. This bill, seen as a milestone in U.S. stablecoin regulation, has sparked considerable discussion within the industry.
Review of hotly debated provisions.
As a bill that has sparked widespread debate, it reflects the regulatory body's growing concern over the increasing importance and potential risks of the stablecoin market.
On the surface, it merely sets rules for stablecoins; but delving deeper, it attempts to clarify a question: As stablecoins gradually take on important roles in the digitalization of the dollar and cross-border payments, who should be granted the right to issue them? What kind of stability mechanism can be trusted? And how to prevent systemic risks from propagating on-chain?
To understand the true intent of this bill, we may need to start with a few of its most closely watched provisions:
A clear prohibition on 'yield-bearing' stablecoins. In simple terms, no issuer can pay interest or other forms of returns on stablecoins held by users. This seemingly straightforward provision directly raises alarms for many DeFi projects reliant on yield mechanisms. The bill's intent is to sever the ambiguous ties between stablecoins and traditional high-risk yield products, preventing potential financial bubbles; however, it directly targets decentralized stablecoins, presenting a significant survival challenge for innovative stablecoins like Ethena.
Strict limits on reserve systems. The bill requires that all stablecoins must maintain a 1:1 reserve ratio, and these reserves must be high-quality, highly liquid assets, such as U.S. Treasury bonds, cash, or federally insured deposits. This effectively 'insures' stablecoins, meaning that projects relying on algorithmic adjustments or staking mechanisms for stability may need to make difficult choices in the future.
Restrictions on issuer qualifications. The GENIUS Act explicitly excludes certain 'special individuals' from participating in stablecoin issuance, such as Elon Musk and David Sacks, who have a certain level of social influence. The signal conveyed here is clear: regulators do not want to see individuals or large tech companies having excessive power in the issuance of digital currencies, to avoid trust crises or market misjudgments.
In addition to the three core provisions mentioned above, another point worth discussing is that the original bill draft allowed certain foreign stablecoins to circulate in the U.S., as long as their issuing countries had a regulatory framework similar to that of the GENIUS Act. However, the latest revision has placed this discretion in the hands of U.S. Treasury Secretary Scott Basset. This not only strengthens regulatory flexibility but also gives the government greater sovereign control.
Four regulations, four barriers, each redefining 'who can play and how to play'. While protecting investors, it also reveals that the world of stablecoins is no longer a land of 'wild growth.'
Multiple viewpoints: Is it a booster paving the way for DeFi, or a tightening spell that constrains innovation?
Both supporters and skeptics are voicing their opinions. Odaily Planet Daily has summarized the viewpoints of several key industry figures, presenting the complex realities behind this regulatory storm from various angles.
Investment perspective: A new financial landscape is being reconstructed.
Although the (GENIUS Act) has only taken its first step, there is a consensus in the crypto industry that its eventual passage is only a matter of time. BITWU.ETH stated, "This bill opens up the imagination for the next decade of Crypto."
He believes that if passed, the most valuable asset to bet on is ETH— the underlying infrastructure for stablecoins and DeFi; followed by BTC— the representative of safe-haven assets. The real explosive potential lies in the entire RWA (real-world assets) track. As he said, "BTC is the biggest fish in this pool, ETH is the irrigation pipe. But what is truly worth betting on is the new financial landscape that emerges as the water flows."
Placeholder partner Chris Burniske is equally optimistic about Ethereum's position. He pointed out that the GENIUS Act may have the most direct positive impact on ETH, as Ethereum has a vast stablecoin ecosystem, solid DeFi infrastructure, and a long-established institutional partnership network. SOL follows closely, while TRX might become an overlooked dark horse due to historical factors.
Macroeconomic perspective: Another piece of the puzzle for dollar digitalization.
For policymakers, the (GENIUS Act) is not just about 'regulation'; it may be a key component in the dollar's pursuit of dominance in the digital world.
Bo Hines, Executive Director of the Trump Digital Asset Advisory Committee, stated that the (GENIUS Act) will solidify the position of stablecoins in the dollar ecosystem, modernize payment infrastructure, and enhance transaction efficiency and transparency. He believes, "Digital asset technology is the core of the next generation of finance, and the U.S. is expected to leverage this legislation to take a leading position in the global fintech sector."
@CryptoPainter_X pointed out that the bill may reflect the government's certain 'debt reduction strategy'; although it is not the main narrative, it still holds long-term benefits for crypto assets.
As for foreign stablecoins (such as USDT, TUSD), the doors to the U.S. market are not completely closed, but the entry barriers have significantly increased. @BTCBruce1 noted that the GENIUS Act introduces two new requirements: first, foreign stablecoins must comply with U.S. audit and disclosure standards; second, the president has the authority to veto their circulation qualifications based on national security. This means that the digital dollar is quietly constructing a global 'gatekeeper mechanism.'
Twitter user @0xulai expressed more directly: "The GENIUS amendment is essentially putting a tight leash on the financial ambitions of big tech companies—preventing Meta, Google, and Microsoft from 'messing around' in the financial sphere."
Project perspective: Is compliance an opportunity or a barrier?
Coinbase CEO Brian Armstrong clearly supports the bill, believing that its clear regulatory framework will promote the legalization of stablecoins and facilitate market growth. As one of the main issuers of USDC, Coinbase is expected to benefit, especially in the context of increasing compliance demands from institutional clients.
For decentralized stablecoin projects, the situation is not optimistic. Mint Ventures partner Alex Xu pointed out that although the (GENIUS Act) is touted as beneficial for stablecoin concept projects (such as Ethena, Sky, Liquity, Aave, etc.), if the bill is formally passed, most of these projects will likely struggle to meet compliance requirements, paving the way for traditional financial institutions to enter the competition, making the market more intense.
@cmdefi added: "Most existing projects do not meet the requirements of the bill; it is more of a framework prepared for new entrants. The demand for fully decentralized stablecoins still exists, such as censorship-resistant and non-dollar-pegged options, but the path to realization will be more tortuous."
Feng Liu, former editor-in-chief of Chain News, pointed out from another perspective that the ban on interest-bearing stablecoins in the bill will force many decentralized projects to rethink their product structures. In his view, this change is more likely to prompt decentralized projects to further reinforce their decentralized characteristics, rather than trying to integrate into a compliance system.
