The new GENIUS Act introduces significant changes in the regulation of the cryptocurrency market in the US. Passed with strong bipartisan support, the law outlines which companies are allowed to issue stablecoins.
What is the GENIUS Act?
The GENIUS Act represents a new step in regulating cryptocurrencies in the US. The law requires non-bank organizations wishing to issue a dollar-pegged token to create separate entities and face antitrust scrutiny.
Restrictions for Stablecoin Issuers
According to Dante Disparte, Chief Strategy Officer of Circle, even traditional banks face new restrictions. They will need to create separate legal subsidiaries to issue stablecoins, with strict limits on lending and risk-taking. This is a more conservative approach compared to proposals from major banks like JPMorgan.
Future of Decentralized Finance
The new law also bans interest-bearing stablecoins and requires full reserve transparency. Analysts believe this will lead to a shift in capital towards decentralized finance platforms, such as DeFi, where passive income opportunities remain intact. Ethereum is expected to benefit the most from these changes.
The measures taken under the GENIUS Act could significantly alter the playing field for the stablecoin market and promote the development of decentralized finance in the US. Increased focus on transparency and compliance with strict standards may lead to a more stable financial landscape.
