U.S. President Donald Trump has signed the GENIUS Act, banning yield-generating stablecoins, which significantly affects the stablecoin market in the country.
Introduction to the GENIUS Act
The GENIUS Act was signed into law by Trump on July 18, 2025, targeting yield-generating stablecoins. This event occurs amid increased regulatory attention on digital assets in the U.S. Key advisor Bo Hines highlighted the Act's framework in discussions with regulators, emphasizing its goal to protect consumers from unregulated yield mechanisms.
Impact on the Stablecoin Market
The Act impacts stablecoin providers, particularly those offering interest-bearing products. Concerns arise over potential adjustments in the $250 billion market and operational shifts for providers. Stakeholders anticipate market responses, impacting assets associated with these stablecoins.
Historical Reactions to Regulatory Changes
Similar regulatory actions, like SEC actions against BlockFi, led to market declines. The GENIUS Act marks a unique stance on yield-generating stablecoins, previously rare in U.S. legislation. Experts speculate potential market volatility and shifts in investment strategies. Historical trends suggest adjustments in token valuations influenced by new regulatory parameters.
The GENIUS Act introduces significant changes to stablecoin regulations in the U.S., with potential wide-ranging consequences for the market and its participants.
