With U.S. President Trump completing the signing of the (GENIUS Act) (commonly known as the stablecoin bill), the global stablecoin market, valued at up to $260 billion, is facing a profound reshuffle. This legislation establishes a federal regulatory framework for the issuance and circulation of stablecoins, covering reserve requirements, auditing mechanisms, exchange rights protection, and issuance entity regulations, bringing legal stability to the market while significantly reshaping the competitive landscape for participants.
(Trump signs the (GENIUS Act)! The first stablecoin regulation bill in the U.S. is officially in effect)
Although the bill seemingly provides 'a fair path' for all compliant players, different participants exhibit diverging fates in this transformative regulatory landscape due to their starting points and structural differences.
(The U.S. (GENIUS Act) comprehensively regulates payment-type stablecoins: understanding issuance thresholds, reserve standards, and regulatory systems all at once)
Independent media (Unchained) author Jason Brett compiled the pros and cons of the businesses under the (GENIUS Act), identifying the winners and losers of this bill; Chain News supplements relevant information.
Stablecoin game restructuring: Who is the winner?
Circle: the regulatory model student stands in a leading position
The issuing company of the stablecoin USDC, Circle, is undoubtedly one of the biggest beneficiaries of this bill. For many years, it has actively lobbied Congress for legislation, and its compliance structure in New York State, monthly audit reports, and conservative reserve policies are highly aligned with the new law's standards. Circle's 'neutral positioning' has also become an asset, making it more universally applicable and internationally accepted in the face of future 'brand coins' launched by banks or corporations.
It successfully went public in June 2025, with a valuation of billions of dollars, further highlighting its market confidence and first-mover advantage.
Circle believes that USDC fully complies with the requirements of the GENIUS Act, as it is entirely backed by reserves of cash and cash-equivalent assets, and is regularly audited by the Big Four accounting firms. In contrast, competitors like Tether may need to adjust their reserve structures to meet the 1:1 support requirement for 'high-quality liquid assets' set by the act.
Large banks: latecomers with licenses taking the stage
According to the new law, federally regulated deposit institutions (such as JPMorgan, Citigroup, Bank of America) can legally issue stablecoins through authorized subsidiaries. This enables traditional financial giants to leverage their compliance experience, brand trust, and technological foundation to quickly enter the market in a clarified regulatory environment. This poses a direct challenge to crypto-native companies like Circle.
A member of the House Financial Services Committee pointed out as early as 2023: 'If stablecoins can generate profit, banks will not miss this opportunity. JPMorgan could easily crush Circle.'
Moreover, traditional banks have also expressed distrust towards digital asset companies. On July 17, the five major financial associations in the U.S. (such as the American Bankers Association, the National Credit Union Administration, etc.) sent a letter to the regional authorized supervisors of the Office of the Comptroller of the Currency (OCC), expressing serious concerns and opposition regarding several digital asset companies (such as Ripple, Fidelity Digital Assets, National Digital TR CO, etc.) applying for licenses to establish 'National Trust Banks.'
Trump and the 'First Family': double benefits from policy and business
This legislation not only solidifies Trump's image as a 'driver of economic modernization' but also injects legitimacy into the USD1 stablecoin plan supported by him and his family. This plan currently serves as a source of $2 billion funding for Binance's investment in the Abu Dhabi fund, but if it expands its scale through the licensing mechanism provided by the bill, its influence is expected to further increase.
It is noteworthy that while the bill prohibits Congress members from participating in the stablecoin business, it sets an 'exemption clause' for the presidential family, allowing the Trump family to remain active in the potential financial landscape.
(WLFI airdrops USD1, BitGo launches lock-up staking services, is this paving the way for WLFI to enter the institutional market?)
Gray area: Custodia Bank's dilemma and layout
As an early entrant in the stablecoin space, Custodia Bank is at a competitive disadvantage due to its failure to obtain a main account from the Federal Reserve. This account is crucial for participation in the U.S. payment system, and although Custodia has sued the Federal Reserve, it has not won.
However, Custodia holds a potential trump card—a patent obtained in 2022 covering 'bank-issued stablecoins and tokenized deposits.' CEO Caitlin Long stated that preparations have been initiated against potential infringers and that they are collaborating with Texas Vantage Bank to form a small bank alliance, attempting to create a 'civilian counteroffensive' shielded by patents.
(Custodia collaborates with Vantage to create the first bank stablecoin, Avit, providing tokenized dollar deposit services)
Losers' camp: Who will exit the U.S. market?
Tether: ranked first in global market capitalization, yet left out in the cold
Tether (USDT), despite a market value of $160 billion, has become a primary target of the new law due to its foreign background and lack of auditing transparency. The act specifies that only institutions established in the U.S. and subject to federal or state regulation are allowed to issue dollar stablecoins. If non-compliant, Tether's issued stablecoins will gradually be phased out of the U.S. market within three years.
Tether responds to the GENIUS Act: launching a dual-coin strategy towards comprehensive compliance
With the (GENIUS Act) officially passed on July 18, 2025, establishing a clear framework for the issuance and regulation of stablecoins in the U.S., Tether CEO Paolo Ardoino immediately issued multiple public statements explaining the company's response strategy. This act requires stablecoin issuers to implement full reserves, regular audits, and comply with anti-money laundering regulations, prompting Tether to undergo large-scale adjustments in an attempt to strike a balance between compliance and global expansion.
Dual stablecoin strategy: Segregating markets, attacking in concert
Tether is launching a 'dual stablecoin strategy,' retaining the existing USDT to continue focusing on cross-border payment scenarios globally, especially in emerging markets, and ensuring USDT can legally circulate in the U.S. under specific regulatory conditions through a 'foreign issuer channel.' On the other hand, Tether plans to issue a brand new stablecoin designed specifically for the U.S. that fully complies with the strict regulations of the GENIUS Act. This new coin will be fully backed by U.S. dollars or U.S. Treasury bonds, regularly audited by the Big Four accounting firms, primarily targeting institutional investors and the domestic market, and will introduce features like revenue sharing to compete directly with Circle's USDC.
Actively transforming for compliance: Achieving comprehensive standards within three years
In the face of new regulatory challenges, Tether expressed clear intentions to comply. Ardoino stated that the company will meet all legislative requirements within three years, including hiring one of the Big Four accounting firms for audits and adjusting its asset structure to meet the 1:1 backing standard for high-quality liquid assets. According to Tether's reserve report for the second quarter of 2025, only 81.5% of USDT reserves currently meet the standards, as they still include non-cash assets such as Bitcoin and precious metals. Over the next three years, the company will gradually transition to a reserve structure primarily consisting of cash and U.S. Treasury bonds.
Regulations bring new market opportunities: stablecoin supply expands tenfold
Ardoino holds an optimistic view regarding the regulatory clarity brought by the GENIUS Act, believing that this will provide Tether with legitimacy to expand into the U.S. market and help increase the global supply of USDT to over $1.6 trillion. He also pointed out that compared to the EU's MiCA regulation, the GENIUS Act is more practical, especially regarding reserve requirements, as the U.S. mandates 100% cash-equivalent assets, while Europe requires a forced 60% deposit in European banks, making it more operational and efficient.
Responding to past criticisms: moving from a black box to transparency
For a long time, Tether has faced criticism for a lack of transparency, unclear reserve information, and incomplete audits, and has previously been fined $42.5 million by the CFTC for misleading statements, as well as being banned from operating in New York. In response, Ardoino stated that the company will completely change its past practices, strengthen AML/KYC measures, and actively cooperate with U.S. regulatory agencies to ensure its survival and development in the U.S. market in the future.
Big Tech: The bill deliberately limits the ambitions of tech giants to issue tokens
Large tech companies like Meta, Apple, Amazon, and X, if they wish to issue stablecoins, must obtain unanimous approval from a 'review committee' consisting of the Secretary of the Treasury, the Chair of the Federal Reserve, and the Chair of the FDIC, which is an extremely high threshold.
This reflects that Congress still harbors lingering concerns over Meta's Libra project from years ago, fearing that tech giants might disrupt the financial order and invade privacy. Elon Musk has publicly stated that X currently has no plans for issuing tokens, seemingly facing current regulatory resistance with composure.
The stablecoin market enters the 'legalization arena'
(GENIUS Act) marks the official entry of the United States into the regulatory era of stablecoins, establishing system thresholds while also drawing clear boundaries:
For compliant players, it is an opportunity for expansion and mainstreaming;
For existing monopolists and tech giants, it is a resetting of competitive models;
For investors and users, it is a long-awaited security upgrade.
The next step will depend on who can run faster and stand more firmly on the path to compliance.
This article discusses Trump's signing of the (GENIUS Act): the U.S. stablecoin market enters a new regulatory era, who is the winner? How will USDT survive? Originally appeared on Chain News ABMedia.
