The crypto market’s attention has once again pivoted to regulatory developments – and this time, the momentum could reshape entire sectors.
On May 19, the U.S. Senate passed a procedural vote on the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025) by a 66–32 margin. This landmark decision marks a critical step toward establishing a comprehensive federal regulatory framework for stablecoins in the United States.
As the first full-spectrum federal legislation targeting stablecoins, the GENIUS Act has already sent shockwaves through the market. DeFi and Real-World Assets (RWA) sectors surged in response, leading today’s crypto rally.
Could this bill be the long-awaited catalyst for the next bull cycle?
According to Citibank, the global stablecoin market could reach $1.6 to $3.7 trillion by 2030. The GENIUS Act doesn’t just predict growth — it enables it, by providing a clear path to compliance and institutional adoption. As traditional finance players seek regulated entry points, stablecoins become a bridge — and with them, new liquidity floods into crypto.
But before chasing price movements, it’s essential to understand what the bill actually says, why it matters, and which assets are best positioned to benefit.
👉 Discover how regulatory clarity is unlocking massive crypto opportunities
From Wild West to Regulatory Clarity
The GENIUS Act — while literally translating to “Genius” — is far from theatrical. It stands for Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, and represents the most serious attempt yet to bring order to the trillion-dollar stablecoin ecosystem.
For years, stablecoins operated in a gray zone: not explicitly illegal, but lacking clear rules. The collapse of algorithmic stablecoin UST in 2022 exposed the dangers of this ambiguity. Now, the GENIUS Act aims to fix that.
Its core objectives are threefold:
- Provide legal clarity and safety for stablecoin users and issuers.
- Promote financial innovation while enforcing accountability.
- Reinforce the U.S. dollar’s dominance in digital finance amid global competition from China’s digital yuan and the EU’s MiCA regulations.
Key Provisions of the GENIUS Act
- Full Reserves Requirement: Stablecoin issuers must hold 100% reserves in safe, liquid assets like cash or short-term U.S. Treasury bonds. Monthly public disclosures of reserve composition are mandatory.
- Tiered Oversight: Issuers with over $10 billion in market cap (e.g., Tether, Circle) fall under federal regulators like the Federal Reserve or OCC. Smaller players can remain under state supervision.
- Transparency & Compliance: Misleading claims (e.g., “government-backed”) are banned. All issuers must follow AML/KYC rules. Firms exceeding $50 billion in value face annual financial audits.
In short: If you issue a dollar-pegged stablecoin in the U.S., it must be fully backed, transparent, and compliant.
This isn’t just regulation — it’s legitimization. And that opens the floodgates for institutional capital.
A Timeline of Progress
The road to GENIUS wasn’t smooth:
- 2023: The STABLE Act failed due to partisan disagreements.
- February 4, 2025: Senators Bill Hagerty, Kirsten Gillibrand, and Cynthia Lummis introduced GENIUS as a bipartisan compromise.
- March 13, 2025: Passed the Senate Banking Committee 18–6.
- May 8, 2025: Initial procedural vote failed (48–49), held back by concerns over potential conflicts of interest involving political figures.
- May 19, 2025: Revised version passed 66–32 after adding safeguards against big tech monopolies.
With momentum building, full Senate approval via simple majority is expected soon.
Why This Matters: Stability, Sovereignty, and Scale
The passage of the GENIUS Act signals more than just regulatory progress — it reflects a strategic vision:
- Certainty for Markets: After years of ambiguity, projects and investors now have a clear rulebook.
- Dollar Digitalization: By tying stablecoins to U.S. Treasuries, America extends dollar dominance without expanding the Fed’s balance sheet.
- Gateway to Broader Crypto Regulation: This could pave the way for comprehensive laws covering exchanges, tokens, and DeFi.
In essence, the U.S. is playing the long game — using stablecoins to maintain financial supremacy while fostering innovation.
Which Crypto Assets Stand to Gain?
The GENIUS Act doesn’t just affect stablecoins — it creates ripple effects across DeFi, Layer 1 blockchains, RWA platforms, and payment networks.
Let’s break down the likely winners — and what they need to do to stay compliant.
Centralized Stablecoin Issuers
These projects are best positioned due to existing compliance practices.
- **$USDT (Tether)**: With ~$130B market cap and ~60% reserves in U.S. Treasuries, Tether already aligns with GENIUS standards. While past concerns around illicit use persist, its infrastructure gives it a first-mover advantage.
- $USDC (Circle): Holding ~80% in Treasuries and actively pursuing IPO status, USDC is poised to become the institutional favorite. Its deep integration into DeFi (30% of DeFi stablecoin usage) amplifies upside potential.
Decentralized Stablecoins
These face adaptation challenges but could thrive if compliant.
- **$MKR (MakerDAO / DAI)**: DAI (~$9B market cap) uses crypto overcollateralization but holds only ~10% in Treasuries. To comply, Maker may need to shift more reserves into Treasuries — a move that could attract regulated capital.
- **$FXS (Frax Finance / FRAX)**: FRAX (~$2B) uses a hybrid model. Its algorithmic component may face scrutiny, but increasing Treasury-backed collateral could align it with regulations.
- **$ENA (Ethena / USDe)**: USDe (~$1.4B) relies on ETH staking derivatives. With only 5% in Treasuries, it may need structural changes — but success could unlock major growth.
👉 See how compliant protocols are gaining traction in regulated markets
DeFi Protocols
Increased stablecoin usage means more volume, more fees, more yield.
- **$CRV (Curve Finance)**: With 70% of its $20B TVL in stablecoin pools, Curve is a direct beneficiary. Higher transaction volumes mean more fee revenue for $CRV stakers.
- $UNI (Uniswap): While broader in scope, its 30% stablecoin liquidity share ensures indirect gains from rising stablecoin trades.
- $AAVE & $COMP: As top lending platforms, both benefit from increased stablecoin deposits and borrowing activity — especially Aave, with its $100B TVL lead.
Yield & Tokenization Platforms
- **$PENDLE (Pendle Finance)**: As stablecoin yields rise under regulated frameworks, Pendle’s yield-tokenization model becomes more attractive. Its $500M TVL could expand rapidly.
Layer 1 Blockchains
Stablecoins drive chain activity — and these networks are central hubs.
- $ETH (Ethereum): Hosting 90% of DeFi and stablecoin activity, Ethereum stands to gain from increased gas fees and network demand.
- **$TRX (Tron)**: With ~46% of USDT流通 on its chain (~$60B), Tron benefits directly from higher transaction volume.
- **$SOL (Solana)**: Low fees and high speed make it ideal for stablecoin DeFi. $8B TVL and rising USDC use signal strong momentum.
- $SUI & $APT: Emerging L1s with growing stablecoin integrations (e.g., Thala on Sui). Regulatory tailwinds could accelerate ecosystem growth.
Payment Networks
- $XRP (Ripple): With stablecoins rising in cross-border payments, XRP’s role as a bridge asset gains relevance — especially for fast settlements.
- $XLM (Stellar): Similar use case; partnerships like IBM’s World Wire highlight its potential as a stablecoin rails provider.
Oracle Networks
- $LINK & $PYTH: As DeFi expands under regulation, demand for reliable price feeds grows. Oracles become critical infrastructure.
Real-World Assets (RWA)
This sector may see the most transformative impact.
- **$ONDO (Ondo Finance)**: Its USDY product — a Treasury-backed yield token — aligns perfectly with GENIUS requirements. As stablecoin issuers seek compliant reserve assets, USDY could become a preferred choice. With $500M in circulation across Ethereum and Solana, demand could skyrocket.
The Bigger Picture: Dollar Hegemony Meets Digital Finance
The GENIUS Act is more than regulation — it’s economic strategy.
By requiring stablecoins to hold U.S. Treasuries, the U.S. creates a new buyer class for its national debt — one that operates globally and grows with crypto adoption.
Today, over 99% of stablecoins are pegged to the dollar. This ensures that every transaction — whether in Nigeria or Singapore — reinforces dollar usage.
And with issuers like Tether already holding more Treasuries than some sovereign nations, this policy strengthens both monetary influence and fiscal sustainability.
It’s a win-win — but not without risks:
- Over-reliance on Treasuries may limit innovation.
- Regulatory pressure could stifle decentralized models.
- Global competitors may accelerate their own digital currency plans.
Yet one thing is clear: the era of unregulated stablecoins is ending — and those who adapt will lead the next wave.
👉 Stay ahead of regulatory shifts shaping crypto’s future
Frequently Asked Questions
Q: What is the GENIUS Act?
A: It’s the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, the first comprehensive federal bill regulating stablecoins in the U.S., focusing on reserves, transparency, and oversight.
Q: How does it affect decentralized stablecoins like DAI?
A: Projects like MakerDAO may need to increase their U.S. Treasury holdings to remain competitive or compliant, especially if they aim to integrate with regulated financial systems.
Q: Will this lead to a crypto bull run?
A: While not guaranteed, regulatory clarity often precedes institutional inflows. With billions in new liquidity expected, many analysts see this as a strong bullish signal.
Q: Which blockchains benefit most?
A: Ethereum leads due to dominance in DeFi, but Solana, Tron, and emerging L1s like Sui and Aptos also stand to gain from increased stablecoin activity.
Q: Is USDC safer than other stablecoins under this law?
A: USDC already meets most GENIUS requirements and is actively regulated — making it one of the safest options for institutional adoption.
Q: Can non-U.S. projects comply with the GENIUS Act?
A: Foreign issuers serving U.S. customers will likely need to meet similar standards to access American markets — influencing global compliance trends.
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