The U.S. Senate has passed the GENIUS Act, introducing the first federal regulatory framework for stablecoins, leading to significant market shifts.
The GENIUS Act: A Regulatory Breakthrough for Stablecoins
The GENIUS Act, or Guiding and Establishing National Innovation for U.S. Stablecoins Act, establishes federal requirements for stablecoins, including full reserve backing, monthly audits, and anti-money laundering compliance. Around 99% of all stablecoins are pegged to the U.S. dollar, making them competitors to traditional payment systems. The Treasury Secretary has broad authority to implement this law.
Market Response: Crypto Stocks Surge
Following the passage of the bill, Coinbase Global shares rose by 10.57% to $280.67, while Circle Internet Group shares surged by 18.08% to $176.12. These companies have shown strong financial performance and expect to benefit from greater regulatory clarity in stablecoin regulation.
The Future of Stablecoins and Market Impact
The passage of the GENIUS Act signals a shift in how traditional financial institutions approach stablecoins. Research indicates stablecoin transaction volumes significantly exceed those of Mastercard and Visa, highlighting the growing importance of digital payment methods and the potential influx of new participants into the market.
The GENIUS Act represents a significant milestone for the crypto industry, opening new avenues for stablecoins and prompting notable market changes. It could herald a new era in digital finance and payments.
