The GENIUS Act is becoming a chain-based revolution and key driver of dollar hegemony
U.S. Treasury Secretary Scott Bessent pointed out on July 20 on social media platform X that blockchain technology is becoming the core driving force of the next generation payment system.
Bessent stated that with the push of the Trump administration's working group, the passage of the GENIUS Act will accelerate the digitalization process of the dollar and consolidate its dominant position as the global reserve currency for future generations.
His view aligns with Deputy Treasury Secretary Michael Faulkender's mention that the GENIUS Act provides "faster, cheaper, and safer on-chain dollar transactions" which aims to enhance the global competitiveness of dollar digital payments and reinforce the U.S. leadership in the crypto center.
Meanwhile, Circle's Chief Strategy Officer Dante Disparte revealed the little-known anti-monopoly design of the GENIUS Act. The act requires non-bank institutions to establish an entity structure independent of the parent company when issuing dollar stablecoins.
At the same time, this independent entity must comply with: operating completely independently of the parent company, adhering strictly to the principles of "no lending, no risk-taking, no leverage" in its balance sheet, and accepting the final approval authority of the Treasury Department committee.
Notably, this structural design is more prudent than the deposit token models proposed by traditional financial institutions like JPMorgan. Disparte pointed out that this framework not only creates a fairer competitive market environment but will ultimately benefit both American consumers and the international status of the dollar.
In summary, the GENIUS Act injects strong momentum into the digitalization process of the dollar and brings new variables to the global crypto asset market. By empowering the payment system with blockchain technology, the act aims to consolidate the dollar's global dominance while creating a fairer competitive environment for market participants through its anti-monopoly design.
As the details of the act gradually take shape, the chain reactions it triggers may reshape the global digital currency competitive landscape, and whether the dollar can solidify its hegemonic status in the digital age will still need to be tested by the market and time.
Finally, what do you think about the restrictive clauses of the GENIUS Act on non-bank institutions? Is this protecting the healthy development of the industry or an act of over-regulation?
