Stablecoin Bill and FXS

On May 20, the U.S. stablecoin legislative bill (GENIUS Bill) passed in the Senate, with the final passage pending a House vote and submission for presidential signature. The market previously believed that the Senate vote was the biggest obstacle to the bill's passage; barring any surprises, the bill's complete passage is merely a matter of time.

Which crypto project is the biggest winner of this legislative victory? Based on token price performance, it might be Frax Finance.

With the bill's passage in the Senate, Frax Finance's token FXS (now renamed FRAX, not yet updated on centralized exchanges) briefly surged above 4.4 USDT, ranking first on mainstream exchanges' growth charts. Even though the current price has slightly retraced, looking at the longer timeline, FXS's increase in the month still exceeds 100%.

Why does this bill favor Frax Finance, and why is Frax regarded by some as the biggest winner of the GENIUS Bill?

Frax Finance

Frax Finance's products are not just stablecoins; they also include liquidity staking, lending, L2, etc. However, they have deep roots with stablecoins. Frax was the issuer of the hybrid algorithmic stablecoin FRAX, but after the Luna UST crash, it abandoned the 'algorithmic stablecoin' track and transformed into a fully collateralized stablecoin.

Afterward, FRAX was further updated to frxUSD, using fiat as collateral, with the entire roadmap aiming to become the first licensed fiat stablecoin.

But what gives frxUSD the edge to become the 'first' licensed fiat stablecoin before products like USDC and USDY? On the regulatory level, it indeed has a possibility of 'getting the moonlight first from the riverside'.

Sam Kazemian, the founder of Frax Finance, has frequently shared photos of himself with crypto legislators in Washington, D.C. since the beginning of this year. It is rumored that he has deeply participated in the discussions and drafting of the (GENIUS Bill) as an industry insider. The market seems to be pricing in the regulatory advantage that Frax Finance may gain from this.

If the speculation is true, as the drafter and participant of the bill, Sam naturally has a deeper understanding of the (GENIUS Bill) and finds it easier for his own projects to meet the requirements. Additionally, whether a friendly relationship with legislators will open regulatory green lights for FRAX's future remains to be seen.

The Future Path of FRAX

In addition to the potential regulatory advantage, FRAX is building a vertically integrated stablecoin ecosystem, including frxUSD (stablecoin), FraxNet (banking interface), and Fraxtal (L2 execution layer), to adapt to future regulatory environment demands.

  • frxUSD: As FRAX's stablecoin, it is pegged 1:1 to the USD.

  • FraxNet: A banking interface designed to connect traditional financial systems with DeFi.

  • Fraxtal: An L2 execution layer (potentially transitioning to L1), providing efficient transactions and scalability.

Token restructuring is also part of FRAX's future plans. FXS has been renamed to FRAX and endowed with functions such as Gas, governance, burning, and staking. This adjustment aims to enhance FRAX's functionality and market competitiveness, making its operations more flexible in a compliant environment.

By staking FRAX for veFRAX, one can earn potential rewards such as FXTL (Frax's own points), Karak, Ethena, and Symbiotic points.

The founder actively engages in stablecoin-related legislation, and the product roadmap is actively adjusted to serve narrative purposes. With the further implementation of the (GENIUS Bill), the performance of FXS (FRAX) is worth further anticipation.

  • This article is authorized for reprint from: (ForesightNews)

  • Author: Alex Liu, Foresight News

'The U.S. Stablecoin Bill Passed the Senate! Frax Token FXS Soars 100%, Expected to Seize Regulatory Opportunity?' This article was first published in 'Crypto City'