How the Genius & Stable Act Could Revolutionize Crypto
This article analyzes legislation like the GENIUS and STABLE Acts, key differences between the bills, impacts on issuers, risks of yield-bearing coins, the global outlook, and more.
The Genius and Stable Acts are groundbreaking bills aimed at regulating stablecoins and promoting American 'leadership' in financial innovation. What many see as transformational pieces of legislation—for better or worse—could revolutionize the way dollars are accessed and exchanged around the world, and more importantly, their relationship to cryptocurrency.
While the two stablecoin bills are currently being considered by lawmakers, the Genius Act will likely reach a full Senate vote within the next X days. But before these two bills pass through Congressional chambers and become law, we need to understand what they are. So, let's take a look...
What is the GENIUS Act?
First of all, the one that is closest to becoming law in the future, if we can believe official sources, is the Genius Act, a bill that standardizes payment stablecoins—digital assets used for payments and pegged to a fixed value. As we also discussed on our blog page here.👇
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This act requires reserves in liquid assets, transparency, and AML compliance—all the good stuff. It also aims to regulate stablecoins and promote their use in the financial system.
If a stablecoin issuance exceeds the $10 billion mark, the issuer must become federally regulated. Non-bank payment stablecoin issuers with smaller issuances can opt to be federally regulated.
As Chair French Hill observed, "Publicly traded big tech companies couldn't be an issuer.
These provisions are designed to prevent public companies, including big tech firms, from owning stablecoin issuers—a way to maintain the separation between commerce and banking and prevent conflicts of interest. It is also an approach designed to ensure that public companies are not penalized while private companies are not."
The GENIUS Act is a first step toward bringing digital assets into our financial system and promoting American leadership in financial innovation.
— Leader John Thune (@LeaderJohnThune) May 8, 2025
We have the opportunity to move the ball forward today, and I encourage my colleagues to take it. pic.twitter.com/85FD1KgjYM
Difference Between the GENIUS Act and the STABLE Act
While they both relate to the same subjects, the GENIUS Act and the STABLE Act have some key differences, particularly in regulatory structure and who can control stablecoin issuers.
One of the main differences between the two bills is the regulatory pathway for non-banks and banks. The Genius Act has a cleaner State-Federal pathway than the Stable Act, with the OCC overseeing non-banks and bank supervisors overseeing banks. The Genius Act also preserves a state pathway but allows for a Federal charter, whereas the Stable Act does not include an intermediate step.
The Genius Act has a clause that prevents a public company from owning an issuer, which was recently extended to include foreign public companies. This applies to all public companies, although legislators had big tech particularly in mind when drafting it. In contrast, the Stable Act has no restrictions on ownership.
Both bills allow the Secretary of the Treasury to recognize issuers from jurisdictions with substantially similar rules to the United States so the issuer must agree to US reporting and examination requirements. This could have significant implications for the regulation of stablecoin issuers.
The GENIUS Act is going to propel America’s payment system into the 21st century. Let’s get it done! pic.twitter.com/mIGpocZmUs
— Senator Bill Hagerty (@SenatorHagerty) June 4, 2025
Impact on Stablecoin Issuers
While the act could make stablecoins more 'legit', it could make it more difficult for foreign issuers to operate in the US, if they want to facilitate dollar products.
The reconciliation of the two acts will likely have a significant impact on foreign stablecoin issuers, with the final bill that will determine the regulatory framework for foreign issuers operating in the US.
Prohibition on Yield-Bearing Coins
What also could happen is the prohibition on yield-bearing coins in a way to ensure that dollar-backed payment stablecoins are not considered yield-bearing activities.
According to Congressman, "It's a payment rail...It's not a money market account." This means that stablecoins should be used for payment purposes only, rather than as an investment vehicle.
The prohibition on yield-bearing coins could have significant implications for the stablecoin industry and could mean that stablecoin issuers will not be able to offer yield-bearing products to their customers (in the US), which could limit the appeal of stablecoins overall.
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Impact on the Market in General
These Acts could drastically expand the availability of dollars and create a more open, liquid global market. Currently, access to dollar swap lines is tightly controlled by the Federal Reserve and limited to a select group of friendly nations.
However, with the these new legislations, anyone could theoretically buy dollar-backed stablecoins from a variety of issuers, using a wide range of assets as collateral.
This could have far-reaching implications for the global financial system. The increased availability of dollars could provide a boost to global liquidity, but it also comes with significant risks.
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Potential Risks
With the rapid expansion of the dollar supply could lead to a decline in the value of the dollar. This, in turn, could have ripple effects throughout the global financial system. Could this lead to a shift in crypto volatility to banks that also could impact bonds and rates?
Current State of Stablecoins
If we look at the stablecoin market that is a barometer for the overall health and growth of the crypto economy, we see over $249 billion in total stablecoin supply across all issuers, it's evident that the market for these assets are growing.
With Ethereum still being the largest and most important player in the crypto market, with over $124 billion locked up and with Bitcoin 6 billion in TVL in total, which is relatively low.
Looking at the supply growth of major stablecoins like USDC and USDT, it's clear that the demand for dollar-pegged assets in the crypto space is stronger than ever.
The charts for these tokens look almost identical to traditional money supply metrics like M0 or M2 – a clear sign that stablecoins are becoming an increasingly important part of the global financial system.
While the stablecoin market is still dominated by household names, there's a growing long tail of smaller issuers that are starting to gain traction. Stablecoins that may not be as well-known as their larger counterparts, are still collectively worth billions of dollars.
What is the Next Step in the Legislative Process?
The next step in the legislative process is to reconcile the Genius Act and the Stable Act between Congressional chambers. This will involve negotiations and discussions between lawmakers to bridge the differences between the two bills.
The outcome of these negotiations will determine the future of stablecoin regulation in the US. However, we are still not there yet...
Not Out of the Woods Yet…
Like all laws that take their time to brew, we need to be realistic and understand that many forces are at play. So is the CCCA Amendment one thing that could potentially derail the Stablecoin Bill. As the CCCA targets the Visa/Mastercard duopoly, requiring banks to offer alternative payment networks and reducing "swipe fees," which cost merchants $187B annually.
While this would be beneficial for merchants and consumers, the lobbying efforts against the inclusion of the CCCA could have a significant impact on future legislation and the time to finalize this and put this into law.
The Bottom Line
The Genius and Stable Act represents a major turning point in the evolution of global finance, with far-reaching implications for the dollar, stablecoins, and the broader crypto market. While the outcome of the vote remains uncertain, it's clear that change is coming.
It's hard to find a perfect analogy for what's happening in the world of crypto today. In some ways, it feels like the early days of the internet – a time of incredible innovation and potential, but also a lot of confusion and skepticism from the mainstream. Others have compared it to the Industrial Revolution or the rise of the stock market in the 1920s.
Whatever it can be compared with, the current rise in crypto activity is notably different from previous periods. The crypto ecosystem has matured and evolved in ways that were hard to imagine even a few short years ago. This isn't just speculation anymore – it's a full-fledged financial system, with all the complexity and potential that comes with it.
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