How the GENIUS Act Could Make Your Stablecoin Dreams Come True 🤑

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Experts believe the recently passed GENIUS Act in the U.S. will significantly influence global stablecoin regulation, establishing compliance standards that non-U.S. issuers must meet to access U.S. financial systems. But let’s be real, who doesn’t love a good compliance standard? 🤷‍♂️

GENIUS Act Sets Global Stablecoin Precedent

Experts suggest that the GENIUS Act, while a U.S. law, is poised to set a significant global precedent for stablecoin regulation. They believe its frameworks will heavily influence international standards, effectively making compliance a prerequisite for stablecoin issuers outside the U.S. who wish to maintain interoperability and access to U.S.-linked financial rails, liquidity pools, and payment systems. Because nothing says “global finance” like jumping through hoops. 🤸‍♂️

Specifically, the Act’s focus on requirements such as 1:1 reserve backing, regular audits, and strong consumer protections is expected to become industry norms worldwide. Those unable or unwilling to meet these heightened standards may face exclusion from crucial U.S.-based integrations, thereby limiting their growth. Conversely, for qualified non-U.S. issuers who do comply, the Act could provide a clear pathway into the U.S. market, fostering broader competition. It’s like getting a gold star in kindergarten, but for finance. 🌟

The experts also draw parallels to recent U.S. Securities and Exchange Commission (SEC) guidance on crypto exchange-traded product (ETP) disclosures, emphasizing that U.S. regulatory expectations can exert practical extraterritorial effects even without direct jurisdictional reach. In essence, for non-U.S. stablecoin issuers, aligning with the GENIUS Act’s standards may become the necessary price of admission to global financial liquidity. Welcome to the club, everyone! 🥳

The remarks by the experts surveyed by Bitcoin.com news came as U.S. President Donald Trump assented to the GENIUS Act, which the U.S. House of Representatives recently passed. By adopting the bill, the U.S. formally signaled its new approach to digital assets, which is a shift from the Biden administration’s. Who knew changing administrations could mean such a dramatic pivot in policy? 🤔

With Trump now having appended his signature to the bill, the experts now expect U.S. financial institutions to start taking concrete steps toward issuing their own stablecoins. Martins Benkitis, CEO and co-founder of Gravity Team, said he foresees “early moves from fintech-forward banks already piloting stablecoin infrastructure.” He said the most “innovative” institutions will likely use this as “a springboard to build beyond SWIFT and modernize cross-border settlement.” It’s like the Wild West, but with more regulations and fewer horses. 🐴

Mete AI, the co-founder at ICB Labs, said the increased clarity stemming from the enactment of the recently passed bills “could open the floodgates for new financial instruments tied to blockchain, with compliance risks more manageable.” Marvin Bertin, CEO at Maestro, like other experts, told Bitcoin.com news he believes financial institutions will view this move positively. He, however, expressed concern that the GENIUS Act in its current form gives an unfair advantage to legacy financial institutions. “One concern is that the GENIUS Act bans yield generation on stable tokens in the US, favoring the existing banking system and stifling potential innovations with this technology,” Bertin argued. Because why innovate when you can just stick to what works, right? 😏

Clarifying Regulatory Authority with the CMSA

While the media spotlight has largely illuminated the GENIUS Act, another crucial piece of legislation has been steadily advancing through U.S. Congress: the Crypto Market Structure Act (CMSA). This bill directly addresses a long-standing regulatory quagmire that has plagued the burgeoning digital asset industry. Because nothing says “progress” like untangling a web of bureaucracy. 🕸️

For years, the SEC and the Commodity Futures Trading Commission (CFTC), the nation’s primary financial regulators, have frequently issued contradictory statements regarding the classification of digital assets. This jurisdictional ambiguity has left market participants in a perpetual state of uncertainty, stifling innovation and often trapping them in a legal limbo, unsure of which agency’s rules to follow. It’s like being stuck in a choose-your-own-adventure novel, but with more lawyers. 📚

However, under the CMSA, the two agencies will have distinct roles, and according to Bertin, this “clear, dual-regulator framework gives blockchain companies like Maestro the confidence to develop compliant, Bitcoin-native financial products.” George Massim, general counsel at Caladan, explained that under the CMSA, developers can, in theory, petition the SEC to have their token classified as a digital commodity. If successful, this will see the token removed from the SEC’s purview. However, Massim said this so-called decentralization certification may create new challenges. “Unless the SEC begins to accept decentralization claims more broadly, this framework won’t necessarily shrink the Commission’s role. So, while the Clarity and Market Structure bills aim to formalize boundaries, the practical outcome will hinge on how both the SEC and the CFTC operationalize those changes,” Massim argued. It’s like trying to play chess when the rules keep changing. 🏹

Although the passage of the three bills is seen as a win for the Trump administration, some have expressed concern at ongoing opposition to digital assets legislation by the Democratic Party. While the final vote tally for the GENIUS Act shows over 100 Democrats voted in favor, the party’s apparent anti-crypto stance creates uncertainty that makes it difficult for projects to make long-term commitments. Mete AI warned that if crypto legislation passes strictly along party lines, “its sustainability is at risk.” Such polarization also deters institutional adoption and can undermine public trust in the government’s ability to handle digital assets wisely, Mete AI added. Massim shares these sentiments, seeing this dynamic as rendering the perceived progress made “undeniably fragile.” It’s like trying to build a house on quicksand. 🏠🌊

To overcome the partisan politics of Washington, Massim instead advocates using established regulatory frameworks but adapting them to reflect crypto technical realities like decentralization, tokenized assets, and 24/7 markets. Massim added:

“If the SEC’s guidance earlier this month on crypto asset ETP disclosures under Reg S-K and S-X is any indication, the Commission seems to be signaling that it believes legacy tools can be flexed to accommodate digital assets without needing entirely new regimes.”

Meanwhile, Bertin said dialogue between industry stakeholders, regulators, and lawmakers across party lines is needed to ensure any legislation is not perceived as the sole product of any particular political party. Because nothing says “bipartisanship” like a good old-fashioned crypto debate. 🗨️

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2025-07-22 01:14