Compiled by TechFlow
Guest | Dante Disparte, Chief Strategy Officer and Head of Global Policy and Operations, Circle
Host | Laura Shin
Summary of key points
After years of hostility, the United States has finally passed its first federal law regarding the crypto industry.
Bipartisan stablecoin legislation (the GENIUS Act) was signed into law by President Trump after a last-minute standoff in Congress. Although considered a sure thing, its passage became turbulent this week, with Democrats raising objections to Trump's ties to cryptocurrencies and the Freedom Caucus suddenly rebelling over provisions opposing central bank digital currencies (CBDCs).
Now that the bill has passed, what will be its impact, and who will benefit or lose from it?
In this episode, Circle’s Chief Strategy Officer Dante Disparte — one of the key figures behind this legislation, explains:
How the bill could win bipartisan support amid political tensions
Why banks might think twice before issuing stablecoins
Why Circle is applying for a national trust bank charter
Additionally, the show discusses the debate surrounding interest-bearing stablecoins, how this bill fits into the broader financial regulatory landscape, and whether American consumers and the dollar will benefit as a result.
Summary of highlights
· The use of money should be as free as possible.
The point is that the crypto industry is finally getting the legitimization it has long desired, a clear path forward in U.S. law and regulation, and the opportunity to compete.
The GENIUS Act's significance extends far beyond cryptocurrency itself. It may be the first financial regulatory bill in U.S. history designed to promote growth, competition, and consumer protection. Its core is to establish clear market rules and foster a rules-based competitive environment.
The (GENIUS Act) establishes clear rules for the market, ultimately benefiting American consumers and market participants, while further consolidating the dollar’s position in the global economy.
The most important aspect of the GENIUS Act is the concept of international reciprocity, which empowers the U.S. Treasury to promote the U.S. regulatory framework globally. This is crucial because it ensures that the United States can take a leading role in shaping international rules, rather than passively accepting the rules of other countries. This applies not only to cryptocurrencies but also to the global use of stablecoins.
Throughout my career, I have often represented American interests in international institutions and government and banking meetings, and although I have represented the private sector, this time, the United States will finally have a formal voice in the development of these rules.
A significant gap in financial access remains globally, and the United States and other countries urgently need alternative payment systems. In the future, many companies may compete over data, viewing it as an asset. In an era where data is being called the "new oil," can blockchain become the "new tool" to carry this data? This is a question worth pondering.
The full-reserve stablecoin model solves a core problem in the early days of cryptocurrency — consumer regret caused by price volatility. This asset serves not only as a pricing mechanism for crypto transactions but also as a vital medium of exchange for the internet economy.
The GENIUS Act and the upcoming U.S. market structure regulation bill will gradually shift cryptocurrencies and blockchain technology from obvious applications to deeper infrastructure, and their impact will gradually become apparent.
I hope that over the next five years, we will not only consolidate the dollar’s position as the core currency of the internet economy and leverage it as a strategic advantage for the United States in global competition, but also enable more people to enjoy secure and reliable financial services based on smart devices.
Crypto Week Was Better Than Anyone Expected
Laura: This is a very important moment for the crypto industry. This week marks the end of what's been called "Crypto Week" in Congress. The GENIUS Act, the first major piece of crypto legislation in the United States, will soon be signed into law by President Trump. This bill, the culmination of years of collaborative work by several members of Congress, aims to regulate the development of stablecoins. Before we started recording, you mentioned that you'd been working on this for seven years. While many believed this bill would pass easily at the beginning of this administration, the final outcome has become more uncertain as it's progressed.
So, what led to this suspense and how was it finally passed?
Dante: Yes, Crypto Week wouldn’t be complete without some political wrangling and drama. One of the biggest dramas this week was the backlash against central bank digital currencies (CBDCs), which really caught a lot of people by surprise.
However, the key lies in the final results, which actually exceeded everyone's expectations. First, the GENIUS Act passed with over 300 votes in favor, with 102 Democrats voting alongside Republicans. The passage of this bill, amidst the current highly polarized political climate in the United States, is clearly a significant bipartisan achievement, reflecting the national interest and the importance of the US dollar in the global economy. It is undoubtedly a tremendous achievement.
Two other bills also made significant progress. The Clarity Act, the House's response to legislation addressing crypto market structure, also received broad bipartisan support and is expected to undergo in-depth debate in the Senate. Another provision opposing CBDCs further demonstrates the United States' commitment to actively participating in the global digital currency competition by regulating dollar-denominated stablecoins.
How to Win Bipartisan Support in a Time of Major Political Friction
Laura: As you mentioned, the bill ultimately received broad support. However, as it progressed, we also saw a lot of opposition from Democrats to the Trump administration's cryptocurrency-related business activities, particularly World Liberty Finance's move to launch its own stablecoin.
I'm curious how Democrats were persuaded to vote for this bill in larger numbers, given that it didn't seem likely at this early stage.
Dante: First, let's be frank. Crypto legislation has become a bipartisan issue in the United States. This leads me to jokingly say that I've helped unite Washington twice in my career. The first was when the Libra project launched, when Republicans and Democrats united in their opposition to the project, sparking numerous hearings and controversy. Despite this, this opposition fostered an unexpected bipartisan unity.
Fast forward to today, and the bill has undergone extensive hearings, interagency meetings, and public consultations. While the Biden administration has issued executive orders on digital assets, the Trump administration has adopted a sincere and growth-oriented, whole-of-government approach to promoting the development of related technologies, particularly those related to artificial intelligence. However, without properly addressing these key interests, including potential political differences, it would have been difficult for the GENIUS Act to secure the support of 18 Democratic senators in the Senate, let alone achieve such significant success in the House. Therefore, this is undoubtedly a significant victory.
The key takeaway for us is that the crypto industry is finally getting the legitimization it has long desired, a clear path forward in U.S. law and regulation, and the opportunity to compete.
Why Dante believes the bill’s significance goes beyond cryptocurrencies
Laura: Circle is widely considered one of the biggest winners from this bill. So, what are the specifics of the bill regarding what types of companies are regulated? Which companies are included and which are excluded? Clearly, certain companies will be able to legally conduct stablecoin-related business in the US, while others will need to meet higher standards to enter this space. Could you briefly explain the impact of this bill on different types of participants and how it will change their operating models?
Dante: First, I believe the GENIUS Act has far greater significance than just cryptocurrency itself. This is perhaps the first financial regulatory bill in American history designed to promote growth, competition, and consumer protection. Its core is to establish clear rules for the market and foster a rules-based competitive environment. I'm excited to share some of the unique features of this bill.
First, it preserves state regulatory authority over banking and payments, a significant obstacle to past attempts to legislate stablecoins. The US financial system is characterized by "fintech federalism," whereby states independently regulate banking and payments. The GENIUS Act respects and continues this tradition. Furthermore, the bill allows banks, non-bank institutions, and credit unions to issue dollar-denominated payment stablecoins with a scale of $1 billion or more. These entities will be brought under the federal regulatory framework, primarily under the Office of the Comptroller of the Currency (OCC), while also promoting the possibility of international competition.
The bill also contains many subtle provisions, such as those regarding international product portability, ensuring that products subject to similar regulatory structures in other countries can flow freely between the United States and abroad. Notable among these is the so-called "Libra Clause." Under this provision, if a non-bank or commercial company wishes to issue a stablecoin, or a product that might be categorized as a vanity stablecoin (TechFlow Note: Vanity Stablecoin is an emerging stablecoin concept primarily designed to meet the customized needs of individuals or brands. It allows users to create a uniquely identified stablecoin based on their preferences or identity, often based on blockchain technology), they must not only establish a separate entity (similar to Circle, rather than a bank) but also address a series of competition law issues and ultimately obtain approval from a Treasury Select Committee. This creates important market protections while also raising barriers to entry. For banks planning to issue stablecoins under the GENIUS Act, they must establish a separate entity, separate from core banking operations, and manage stablecoin issuance and redemption activities in a completely different manner, rather than the same way traditional banks manage lending and credit creation. This regulatory approach is even more conservative than the so-called deposit token era.
This also raises an important question: Are banks willing to adopt a conservative balance sheet management strategy, taking no risk, using no leverage, and not making any loans, focusing solely on issuing stablecoins? Or are they more willing to compete in this niche market by providing core banking services? Overall, this bill sets clear rules for the market, and I believe the ultimate winners are American consumers and market participants, while also further consolidating the dollar's position in the global economy.
How Circle plans to compete with banking giants
Laura: Let's talk about the big banks' moves. This week, Bank of America, JPMorgan Chase, and Citigroup all announced efforts to launch stablecoins, or at least consider them. While the bill doesn't fully cover these banks' activities, they do fall into the same area as Circle's. JPMorgan Chase also plans to launch a deposit token. Currently, Circle's USDC is primarily used for trading and decentralized finance (DeFi), and through its partnership with Coinbase, it has become its largest merchant partner. Furthermore, USDC will be available to millions of Shopify merchants on Coinbase's Base network.
So, at the moment, Circle is more of a crypto-native project, while these banks have a larger distribution among non-crypto users, which is obviously a larger market. So, how does Circle compete with these big banks?
Dante: That's an interesting question. I think that's been the case in discussions about competing digital currencies between banks, non-banks, and even central banks. Our operating model and long-term belief is that once very clear rules of the road are established, the breakthrough is not in tokenized forms of money. The technological breakthrough in banking and payments is actually in the infrastructure.
Our long-term vision is to build an internet-based financial system that interconnects global capital and financial services through blockchain technology. As you may know, USDC is a multi-chain innovation designed to promote interoperability between different blockchains. It is committed to building a trusted financial infrastructure that can bring capital and financial services to areas beyond the reach of traditional banking and payment systems.
This isn't a strategy to oppose banks. In fact, our strategy relies heavily on collaboration with them, leveraging the trust and security they have built in the real economy. The GENIUS Act will undoubtedly foster competition on multiple levels, a positive force for the U.S. economy and the entire market category. It's also the best way to ensure the widespread adoption of digital assets and cryptocurrencies, which require full interoperability with the traditional financial system.
Another key point is that before the GENIUS Act, the United States lacked a clear regulatory framework for cryptocurrencies and non-bank payment systems. Take the Libra project, for example. Due to the lack of relevant US legislation, Libra was ultimately established in Switzerland, which is able to regulate it as a financial infrastructure. The implementation of the GENIUS Act provides the US with an "America First" institutional framework while avoiding the limitations of an "America alone" approach. This allows companies like Circle, as well as other US businesses, including traditional banks, to compete in the global market without worrying that their business models or internet-based digital dollars will be restricted by other countries' regulations. This is particularly important as the competition between stablecoins and central bank digital currencies (CBDCs) becomes an increasingly prominent focus in the global financial landscape. Discussions over the past week have demonstrated that many countries and financial institutions are attempting to break away from their reliance on the US dollar and explore alternative payment systems.
Laura: Okay, I'd like to confirm one of your points. I originally thought this bill was primarily aimed at domestic business activities in the United States, but from what you just described, it seems that it may also have an impact on the use of stablecoins in other countries?
Dante: Absolutely. This is actually a key provision in the [GENIUS Act], which was originally introduced in the House of Representatives. You may recall that there were different proposals for stablecoin legislation between the House and Senate. The bill introduced in the House was called the "Stablecoin Act," while the bill introduced in the Senate was called the [GENIUS Act].
Ultimately, the GENIUS Act incorporated many of the improvements in the House version and garnered the support of 102 Democratic members. Key among these was the concept of international reciprocity, which empowers the US Treasury to promote the US regulatory framework globally. This is crucial because it ensures the US can take a leading role in shaping international rules, rather than passively accepting the rules of others. This applies not only to cryptocurrencies but also to the global use of stablecoins. This is also a significant milestone for me personally. Throughout my career, I have frequently represented US interests in international institutions and government-bank meetings, albeit as a representative of the private sector. This time, the US finally has a formal voice in the shaping of these rules.
What does Circle hope to achieve by applying for a national trust bank charter?
Laura: At the end of June of this year, Circle filed an application to establish a national trust bank in the United States. This will enable Circle to directly manage its own reserves and provide cryptocurrency custody services to institutional clients. Please elaborate on Circle's plans for this national trust bank.
Dante: Yes, custody and guarantee services are part of our plan. Furthermore, with the implementation of the [GENIUS Act], non-bank stablecoin issuers in the US will be required to obtain a charter and trust license from the Office of the Comptroller of the Currency (OCC). Therefore, this move is clearly an early preparation for future regulatory requirements. This strategy is not surprising, as it aligns with our approach under the Markets and Crypto-Assets (MiCA) framework in Europe.
Our business goal has always been to strive for excellence. As Europe spent years developing the MiCA framework, we realized we had to establish a presence there. We chose France for this purpose, securing an e-money license and ensuring that Circle's USDC and euro stablecoins were among the first products to comply with MiCA regulations. Therefore, as regulations in the United States mature, it was logical for us to adopt a similar model.
Laura: I'd also like to ask about competing with big banks. (Fortune) recently reported that JPMorgan Chase plans to charge fintech companies for accessing its data. Imagine a fintech company, like Plaid, that connects Coinbase (your largest partner) with its client banks. If that bank is JPMorgan Chase, then what was once a free data connection might start charging a fee. Do you think this change would hinder Circle's growth? How would Circle respond if similar bank-imposed fees were to occur?
Dante: This is a complex issue, and it's difficult to predict the specific impact at this point. However, one thing is clear: the legality of using money has been a hotly debated issue for years, and that's one of the reasons I got into this industry. I've always believed that the right to use money should be as free as possible.
Furthermore, traditional banking payment methods resemble those of the landline telephone era, where longer calls incur higher charges. Consequently, many companies may compete over data in the future, viewing it as an asset. In an era where data is being called the "new oil," can blockchain become the "new tool" for storing this data? This is a question worth pondering.
Why financial privacy is so important in the American system
Dante: The American public has a deep-seated need for financial privacy, which is one of the main reasons for opposing central bank digital currencies (CBDCs). However, truly ensuring financial privacy is not easy. Only by establishing clear rules and a fair competition system can we provide users with a comprehensive range of financial services securely and privately. Crypto wallets play a crucial role in this process, providing users with secure tools for storing and managing cryptocurrencies while protecting personal privacy.
Currently, stablecoins are achieving this goal through the US dollar, while mobile digital wallets, open-source wallets, and blockchain infrastructure are supporting this competitive ecosystem, enabling it to reach every user. In a post-GENIUS Act world, consumers will have more choices for accessing financial services while preserving their privacy. If large institutions attempt to compete by monetizing data, implementation of the GENIUS Act will provide consumers with alternatives without sacrificing their privacy.
How deposit tokens differ from stablecoins
Laura: The topic of deposit tokens has been gaining attention recently, and I wasn't familiar with the concept before. Each unit of a deposit token represents a portion of a bank deposit. So, how does its use differ from that of stablecoins? Do deposit tokens have the potential for widespread adoption? In what scenarios might they be used? Are they competitive with stablecoins, or are they simply different in purpose? How should consumers view the two?
Dante: This question is indeed somewhat complex. As a supporter of the movement against central bank digital currencies (CBDCs), I have conducted in-depth research on this topic, drawing on several academic papers to support my views. There are indeed certain similarities between deposit tokens and stablecoins. The [GENIUS Act] allows banks to issue payment stablecoins, but stipulates that bank-issued payment stablecoins are the only legal products. The bill sets out some key requirements for payment stablecoin legislation.
If I were on the board of directors of a major bank, I would be concerned about the following issues: First, the issuer cannot pay out returns directly, which means that this digital currency does not compete with traditional deposits but is instead a fully-reserve form of digital currency. This also raises the question — if a deposit token were issued by a failed bank (such as Credit Suisse), would you accept it? Because if a deposit token fails to comply with the (GENIUS Act) regulations, it could become a digital representation of the bank's balance sheet risk. This means that your right to redeem dollars at par could be affected by factors such as loans, credit risk, and term risk on the bank's balance sheet. Therefore, the (GENIUS Act) requires banks to issue stablecoins through independent entities and independent balance sheets to ensure their security.
Furthermore, the GENIUS Act puts an end to the era of stablecoins that were often misnamed. For example, Terra Luna is no longer tradable in the US market. If stablecoin issuers fail to prove the authenticity of their assets (i.e., pass the "Jerry Maguire test"—a common metaphor in startups, investment, and product development, derived from the classic film "Jerry Maguire"—they could even face criminal penalties. The GENIUS Act imposes strict requirements for trust, transparency, and auditability, and imposes criminal liability on those responsible. This ensures that counterfeit crypto-dollars, disguised as stablecoins, will no longer emerge and ultimately collapse.
What actions Circle might take when interest-bearing stablecoins are finally approved
Laura: I understand that stablecoins inherently have certain centralized characteristics, but that's completely different from the Terra Luna situation. However, I want to discuss stablecoins that carry interest. Clearly, the law currently prohibits such stablecoins, and this regulation doesn't entirely serve the interests of consumers. In some ways, it's even somewhat counterintuitive, as the law was actually pushed by Democrats. However, it's a positive for Circle and companies like it. I understand that the law won't change in the short term, but in the future, as consumers realize that this regulation isn't working for them, it could drive policy changes. If the law allows stablecoins that carry interest, Circle might need to compete to attract more customers, perhaps by offering returns to consumers. While this may not be your current focus, I imagine this could happen in the future.
Dante: We've certainly considered this question. Let me share our perspective. The full-reserve stablecoin model addresses a core issue in the early days of cryptocurrency—consumer regret stemming from price volatility. Due to its volatile price fluctuations and appreciation, Bitcoin has gradually lost its function as an internet medium of exchange, becoming defined as digital gold rather than an asset for everyday consumption. For example, the "Bitcoin Pizza Day" incident is a prime example, fueling the demand for a full-reserve stablecoin. This asset serves not only as a pricing mechanism for crypto transactions but also as a crucial medium of exchange for the internet economy.
Currently, both MiCA and the GENIUS Act prohibit stablecoin issuers from paying yields directly to token holders, but we believe yield is a key characteristic of cryptocurrencies. DeFi and the lending and borrowing capabilities associated with programmable money can generate yields through secondary markets. The GENIUS Act prohibits regulated issuers from paying yields directly, but yield, as a secondary market innovation, is a core function of this sector. Just as physical dollars create loans and credit on bank balance sheets, fully-reserve stablecoins are becoming a crucial foundational layer for the internet economy. Unlike traditional money, consumers enjoy other advantages of using money, such as liquidity unaffected by bank holidays, programmability, composability, and the flexibility of DeFi. These advantages are unattainable if the money itself is not fully-reserve or carries risks. This is why we support the GENIUS Act and MiCA, which have become the legal foundation for stablecoins in Europe and the United States.
In addition, the United States needs further regulation of the crypto market structure to address other issues in the market, such as how to define commodities, securities, and digital collectibles, and how to handle comprehensive economic activities across banking, payment regulation, and capital markets. I believe that innovation in the secondary market and the income function of stablecoins will usher in new development opportunities in this area.
Laura: I have a few more questions about Circle's recent IPO. The stock was trading around $234 as of an hour ago, well above the IPO price of $31.
I'm curious about the atmosphere at the company since the IPO, because I think, at least in the crypto space, there can be a gap between pre-IPO expectations and actual results. Is that your sentiment as well? Or was it a shock to you?
Dante: Unfortunately, I can't speak for Circle as a whole. I can't say much about the stock price or the IPO itself, but becoming a public company has always been a long-term goal for Circle. As a public company, we remain focused on the core principles that drive the company, which is long-term growth. That's probably the most I can share.
However, I think the real news headline right now is the GENIUS Act. In fact, I'm on my way to the White House right now to attend the signing ceremony for a law that I personally invested a lot of effort in. This moment is not only great for the company, but also for the entire country and the market because we finally have legal clarity in the United States.
How this new law might affect ordinary Americans and their money
Laura: One last question. If we look out five years from now, how do you think this law will impact the lives of ordinary Americans, consumer rights, and America's standing in the world?
Dante: I once wrote an article titled "When Blockchain is No Longer a Topic, How We Can Use It to Change the World." I'd like to thank you, Laura Shin, for giving me this opportunity when you were the editor at Forbes. I believe that the GENIUS Act and the upcoming US market structure regulation bill will gradually shift cryptocurrency and blockchain technology from obvious applications to deeper infrastructure, and their impact will gradually become apparent.
I hope that over the next five years, we will not only consolidate the dollar's position as the core currency of the internet economy and leverage it as a strategic advantage for the United States in global competition, but also enable more people to enjoy secure and reliable financial services powered by smart devices. These services will encompass not only simple payment functions but also complex financial activities such as savings, loans, and credit, bringing greater convenience and benefits to consumers. Therefore, the United States has officially entered this field.
Just yesterday, I attended a global conference with approximately 40 to 50 international regulators and central bank representatives. This is the first time in my seven years working in this field that I can confidently say that the United States is developing a legal framework for the cryptocurrency and blockchain industry and is no longer relying solely on the private sector to represent the country.
