On March 1, 2023, the U.S. Senate finally passed the Stablecoin Genius Act with a vote of 68 to 30.

Why is it so important? Because this bill is not a ban, but an attempt at "systemic regulation."

The GENIUS Act requires all dollar-pegged stablecoins to have a 1:1 full reserve, with assets limited to cash or short-term U.S. Treasury bonds. Reserve audit results must be disclosed monthly, and users' funds are prohibited from being misappropriated or re-collateralized. Once the market capitalization exceeds $10 billion, it must enter the federal regulatory system. Stablecoins are now treated as "formal financial instruments."

Personally, I feel this is a competition for monetary dominance. The U.S. does not want stablecoins to run out of control, nor does it want to be outpaced by other CBDCs. Therefore, it chooses to set rules directly, first incorporating stablecoins, and then pushing them globally.

The real impact of this legislation goes beyond the blockchain:

1️⃣ Increase the transparency of stablecoins and rebuild market trust.

2️⃣ Provide traditional financial institutions with a compliance pathway.

3️⃣ Projects face higher compliance thresholds, reducing innovation.

In a sense, this is a reshuffle. Stablecoins will resemble real-world 🏦 products more and will no longer just be a "medium of exchange" in the crypto world, but may become a key bridge between the real world and the blockchain world.

For instance, in and out payments. In the past, many users could only rely on OTC and gray channels. Now, if compliant stablecoins can directly access bank accounts, the barriers for payment, cross-border transactions, and on-chain settlements will significantly decrease. This is the key to truly pushing stablecoins into the mainstream.

Of course, not everyone supports this approach. Some worry that excessive regulation will stifle innovation and completely turn Crypto into a subsidiary of the financial industry. Moreover, if only a few giants are left licensed to issue compliant stablecoins, then what remains of "decentralization"?

But in my view, this may be a compromise that must be made. There must always be a balance between regulation, user trust, institutional entry, and technological innovation.

The Genius Act brings about not just simple benefits, nor direct downsides, but the establishment of a new order.

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