The U.S. Senate has advanced the GENIUS Act, which has the potential to significantly impact the stablecoin market and possibly Ethereum's price.
GENIUS Act Advances in the U.S. Senate
On Monday night, the U.S. Senate held a procedural vote, resulting in the advancement of the GENIUS Act. The vote passed with 66 senators in favor and 32 against, indicating strong bipartisan support. The bill will now move to the House of Representatives for further review. The GENIUS Act proposes clear rules for stablecoin issuers, requiring 1:1 backing by U.S. dollar reserves and introducing federal oversight for issuers with more than $10 billion in circulation.
Advantages for Ethereum with Stablecoin Regulation
Ethereum is the primary network for stablecoins like USDC and DAI. The regulations requiring 1:1 reserves will directly benefit ETH's ecosystem. Developers and institutions are likely to favor Ethereum for its maturity and security. Additionally, stablecoin regulations may draw more institutional investments into ETH-based DeFi services.
Historic Drop in Ethereum Exchange Supplies
According to analytics firm Santiment, only 4.9% of ETH is currently held on centralized exchanges, marking the lowest level in over ten years. This reduction in exchange supplies suggests that fewer investors are looking to sell in the near term. Almost 1 million ETH has been withdrawn from exchanges in the past month, coinciding with a more than 58% price increase.
With new regulatory norms, Ethereum stands out as one of the most advantageous players in the stablecoin market. Reduced exchange supplies and growing investor interest could fortify ETH's position and lead to further price growth.
