Here’s a comprehensive look at what might happen if the U.S. Congress passes the 'GENIUS Act' to regulate stablecoins
✅ What is the GENIUS Act?
Name of the law: Guiding and Establishing National Innovation for U.S. Stablecoins Act.
Aims to regulate stablecoins like USDC and USDT and link them to a fixed reserve mechanism (dollars or short-term bonds) at a 1:1 ratio.
Requires issuers to disclose reserves monthly and undergo annual audits if the currency value exceeds the $50 billion cap.
🏦 Potential implications:
1. Enhancing trust and broad adoption
By providing regulatory clarity, the stablecoin market is likely to grow to $2–3 trillion over the decade.
The influx of founders like banks, major traders like Visa, Mastercard, and Amazon may increase.
2. Consumer protection and financial security
Priority for currency holders in case of issuer bankruptcy.
Prohibits claims that it is guaranteed by the government or insurance institutions like the FDIC.
Strict requirements against money laundering and restrictions on transactions with startups.
3. Increased activity in the U.S. bond market
Due to the mandatory holding of Treasury bonds, demand for short-term Treasury bonds may increase.
This could affect the financial market and the government's profit stability.
4. Balancing governance and political concerns
Members of Congress and executive staff are prohibited from issuing or owning these currencies; however, it is reported that this ban does not include the President's or Vice President's office.
Massachusetts Representative Elizabeth Warren raised concerns about Trump's spouse not being included in the ban.
Criticism: 'It's the fast track to corruption under Trump.'
⚖️ Pros and cons:
Benefits Challenges
Regulatory clarity establishes trust Risks to the bond market
Investor protection Concerns about conflicts of interest
Support for financial and tech institutions Higher compliance costs for exporters
📌 Next step
The GENIUS Act was passed by the Senate with a vote of 68 to 30, and the bill is now in the House of Representatives before being signed by President Trump.
If it passes the council and is expected to be signed, we will witness a historic shift in U.S. digital currency legislation, especially stablecoins.
🧭 Summary
If Congress passes the law and the president approves it:
A wide range of regulation and legal clarity will be achieved.
Encourages the expansion of stablecoins with confidence.
Enhances the United States' position in 'digital leadership'.
However, it may open discussions about political powers and its impact on the bond market.
