Signed into law by President Donald Trump on July 18, 2025, the GENIUS Act dramatically alters the regulatory landscape for stablecoins in the United States, involving the Federal Reserve and eligible financial institutions.
Stablecoin Regulation in the USA
The GENIUS Act aims to stabilize the stablecoin market and attract significant institutional interest. It is expected that this will potentially increase the stablecoin market cap to $3 trillion by 2030. Stablecoin reserves are required to be 1:1 backed by cash or Treasuries, ensuring transparency through regular audits.
Federal Licensing and Distinctions from MiCA
Unlike previous regulatory measures such as MiCA, the GENIUS Act introduces a federal licensing structure, marking a distinctive regulatory development. Prior regulations often resulted in fractured liquidity and market volatility.
Market Impact Prospects for Stablecoins
Experts from Kanalcoin suggest that the GENIUS Act will increase liquidity demands on short-term US Treasuries while posing volatility risks to the broader crypto market due to potential outflows from stablecoin reserves.
The GENIUS Act brings significant changes to stablecoin regulation, providing prospects for future sustainable liquidity and development of the crypto economy in the USA.
