✍️ The impact of the GENIUS Act on the future of Stablecoins

On July 18, 2025, U.S. President Donald Trump signed GENIUS Act (The Guiding and Establishing National Innovation for U.S. Stablecoins Act is the first comprehensive federal regulatory framework for stablecoins in the United States. The new law carries stringent restrictions to protect users and sets the stage for a fundamental shift in the cryptocurrency ecosystem. Here's what the science says 🌐:

1. Support 100% Reserve and Liquidity Movement 💵

The law requires each unit of fixed currency to be backed 1:1 by liquid assets such as US dollars or short-term treasuries, with a monthly disclosure of the reserve composition. This transparency minimizes the risk of sudden collapses and builds greater confidence among users.

2. Clear regulation + supervision of financial institutions

The law defines the category of "permitted issuer" as only financial institutions that are licensed to issue stablecoins, and prohibits unlicensed persons from doing so within the United States. This reduces unregulated activity and promotes transparency.

3. Class priority for currency holders in bankruptcy

In the event of an issuer's bankruptcy, holders of the stablecoin are given the highest priority in recovering their funds, as the reserve is considered a separate property from the issuer's assets, enhancing legal protection and trust.

4. An opportunity for giants like Walmart and Amazon 🏪

As regulatory frameworks become clearer, large corporations have an opportunity to launch their own stablecoins. They can reduce costs, accelerate payments, and boost loyalty programs with a private digital currency.

5. Dollar Strengthening and Declining Authority of Traditional Authorities

The law ties fixed currencies to the U.S. Treasury, strengthening the dollar's position globally. It also reduces the authority of agencies such as the SEC and CFTC over these currencies by classifying them as payment instruments rather than securities or commodities.

6. Future challenges and balances

Smaller companies are expected to face difficulties in complying with capital and transparency restrictions. There may also be concerns about government intervention or excessive oversight of digital wallets. In addition, increased demand for treasuries could lead to changes in global interest rate markets.

🧭 Final Equilibrium: A leap towards organization and competition

The GENIUS Act marks a watershed moment in the cryptocurrency world, providing a secure and regulated framework for businesses and users alike, and opening the door to healthy competition between giants within a modern digital financial system.

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