Original author: TechFlow
The sentiment of the crypto market is once again focused on regulatory actions.
On May 19, the U.S. Senate passed the GENIUS Act (U.S. Stablecoin Innovation Guidance and Establishment Act of 2025) in a procedural vote with a vote of 66-32. This milestone marks the imminent implementation of the U.S. stablecoin regulatory framework.
As the first comprehensive U.S. federal stablecoin regulatory bill, the advancement of the GENIUS Act quickly triggered a heated response in the crypto market, and the DeFi and RWA sectors related to stablecoins led the market today.
Will the GENIUS Act become the catalyst for a new bull market?
According to Citibanks forecast, by 2030, the global stablecoin market is expected to reach 1.6 to 3.7 trillion US dollars. The passage of the bill gives stablecoins more compliance characterization and development space, and traditional companies have more reasonable reasons to enter.
The market is also expecting that the entry of incremental funds will bring about a flooding and inject new liquidity into related crypto assets.
But before that, you should at least understand what the bill actually contains and the legislative motivation behind it, so as to provide a more convincing reason for selecting relevant crypto assets.
From wild growth to standardization
GENIUS Act, literally translated as Genius Act, is actually the abbreviation of Guiding and Establishing National Innovation for US Stablecoins Act of 2025.
To put it simply, it is the national legislative document of the United States.
The reason why the market is paying attention is that it is the first comprehensive federal regulatory bill for stablecoins in U.S. history. Prior to this, stablecoins and cryptocurrencies have always been in a delicate gray area:
You can do anything unless it is expressly prohibited by law, but there are no clear rules in the law to tell you how to do it.
The goal of the GENIUS Act is to provide legitimacy and security to the stablecoin market through a clear regulatory framework while solidifying the dollar’s dominance in digital finance.
In summary, the key contents of the bill include:
Reserve requirements: Stablecoin issuers must be 100% reserve-backed, and reserve assets must be highly liquid assets such as US dollars and short-term US Treasury bonds, and the reserve composition must be disclosed monthly.
Regulatory levels: Large issuers with a market value of more than $10 billion (such as Tether and Circle) are subject to direct supervision by the Federal Reserve System or the Office of the Comptroller of the Currency (OCC), while small issuers can be regulated by the state.
Transparency and Compliance: Misleading marketing (such as claiming that stablecoins are guaranteed by the U.S. government) is prohibited, and issuers are required to comply with anti-money laundering (AML) and know your customer (KYC) regulations. Issuers with a market value of more than US$50 billion are required to audit financial statements annually to ensure transparency.
This means that the United States’ attitude towards stablecoins is actually friendly, but the prerequisite is that stablecoins must be backed by US dollars and must meet the requirements of openness and transparency.
Looking back at history, the birth of the GENIUS Act was not achieved overnight, but is the culmination of the United States exploration of stablecoin regulation over the years. We also quickly sorted out the full timeline of this bill to help you quickly understand the background and motivation of the bill:
The stablecoin market is developing rapidly, but the risks caused by the lack of supervision are becoming increasingly prominent. For example, the collapse of the algorithmic stablecoin UST in 2022 highlighted the need for clear supervision.
As early as 2023, the House Financial Services Committee proposed the STABLE Act, attempting to establish a regulatory framework for stablecoins, but it failed to pass the Senate due to bipartisan differences;
On February 4, 2025, Senator Bill Hagerty, together with bipartisan senators Kirsten Gillibrand and Cynthia Lummis, formally proposed the GENIUS Act, which aims to balance innovation and regulation. On March 13, the bill passed the Senate Banking Committee with a vote of 18-6, demonstrating strong bipartisan support.
However, the first unanimous vote on May 8 failed because it did not reach the 60-vote threshold (48-49), and some Democratic lawmakers (such as Elizabeth Warren) were concerned that the bill might benefit the Trump familys crypto projects (such as the USD 1 stablecoin), believing that there was a conflict of interest.
After revisions, the bill added restrictive clauses on large technology companies and eliminated the concerns of some lawmakers about conflicts of interest. It was ultimately passed by a procedural vote of 66-32 on May 19 and is expected to be passed by a full Senate vote by a simple majority soon.
So, what is the significance of legislation reaching this point?
First, the market wants certainty. The passage of the bill basically marks the transition of the US stablecoin market from wild growth to standardization, filling the long-standing regulatory gap and providing certainty for the market.
Secondly, it is clear that the US wants to consolidate the position of the US dollar through stablecoins, especially under the competitive pressure of Chinas digital RMB and the EUs MiCA regulations.
Finally, the advancement of the GENIUS Act may pave the way for broader crypto market legislation (such as the Market Structure Act), promote the integration of the crypto industry with traditional finance, and provide a legal basis for your expansion.
Interest-related crypto assets
The core provisions of the GENIUS Act directly affect the stablecoin ecosystem and spread to the entire crypto market through a chain reaction. This regulatory framework will not only reshape the stablecoin industry, but will also affect multiple crypto tracks such as DeFi, Layer 1 blockchain, and RWA through the widespread application of stablecoins.
However, projects in some tracks do not fully meet the regulatory requirements of the bill. If the bill is to be regarded as a benefit, corresponding adjustments need to be made in product design and business.
We have compiled some of the larger projects and listed the benefits and adjustment points as follows.
Centralized stablecoin issuers:
The bill’s reserve requirements (100% liquid assets, holding U.S. Treasuries) and transparency provisions (such as monthly disclosures) are most favorable to centralized stablecoins. These stablecoins have basically met the requirements, and clear regulation will attract more institutional funds to enter the market and expand their use in trading and payment areas.
$USDT (Tether): USDT is the largest stablecoin by market value (market value of approximately US$130 billion in 2025). Approximately 60% of its reserves are US short-term Treasury bonds (approximately US$78 billion) and 40% are cash and cash equivalents (data source: Tethers first quarter 2025 transparency report).
The GENIUS Act requires that reserve assets be mainly U.S. Treasuries, which Tether has fully complied with, and its transparency measures (such as quarterly audits) also meet the requirements of the Act. However, the point is that the use of USDT has always been part of the gray industry (such as online fraud), and how to adjust the business to adapt to regulation is the next issue to consider.
$USDC (Circle): USDC has a market value of approximately $60 billion, with 80% of its reserves in short-term U.S. Treasury bonds (approximately $48 billion) and 20% in cash (data source: Circles May 2025 monthly report). Circle has registered in the United States and actively cooperates with supervision (such as applying for an IPO in 2024), and its reserves fully comply with the requirements of the bill. The passage of the bill may make USDC the preferred stablecoin for institutions, especially in the DeFi field (USDCs share of DeFi has reached 30% in 2025), and its market share is expected to increase further.
Decentralized Stablecoins:
$MKR (MakerDAO, issuing DAI): DAI is the largest decentralized stablecoin (market value of approximately US$9 billion), issued through over-collateralized crypto assets (such as ETH). Currently, approximately 10% of its reserves are US Treasury bonds (approximately US$900 million), mainly collateralized by crypto assets (data source: MakerDAO May 2025 report).
The GENIUS Acts strict requirements for reserve assets may pose a challenge to DAI, but if MakerDAO increases its U.S. Treasury reserves, it can benefit from overall market growth. $MKR holders may benefit from increased DAI usage (the MakerDAO protocol will have annual revenue of approximately $200 million in 2025).
$FXS (Frax Finance, issuing FRAX): FRAX has a market value of approximately $2 billion and uses a partial algorithmic mechanism (50% collateral, 50% algorithmic), with approximately 15% of collateral assets being US Treasuries (approximately $300 million). If Frax adjusts to a full collateral model and increases the proportion of US Treasuries, it can benefit from market expansion, but its algorithmic mechanism may face regulatory pressure because the bill does not protect algorithmic stablecoins.
$ENA (Ethena Labs, issuing USDe): USDe has a market value of approximately US$1.4 billion and is issued through ETH hedging and income strategies. Only 5% of its reserves are US Treasury bonds (approximately US$70 million).
Their strategies may need to be significantly adjusted to comply with the bill, and if successful, they could benefit from market growth, but there are also risks.
DeFi Trading/Lending
$CRV (Curve Finance): Curve focuses on stablecoin trading (TVL of approximately US$2 billion in 2025), and 70% of its liquidity pool is stablecoin trading pairs (such as USDT/USDC).
The increased use of stablecoins driven by the GENIUS Act will directly increase Curves trading volume (currently about $300 million per day), and $CRV holders can benefit from trading fees (annualized yield of about 5%) and governance rights. If the stablecoin market continues to grow as predicted by Citi, Curves TVL may increase by another 20%.
$UNI (Uniswap): Uniswap is a general-purpose DEX (TVL of ~$5 billion in 2025), and stablecoin trading pairs (such as USDC/ETH) account for 30% of its liquidity. The increase in stablecoin trading activity brought about by the bill will indirectly benefit Uniswap, but its benefit will be less than Curve (due to its more decentralized business), and $UNI holders can benefit from trading fees (about 3% annualized).
$AAVE (Aave): Aave is the largest lending protocol (TVL of approximately $10 billion in 2025), and stablecoins (such as USDC, DAI) account for approximately 40% of its lending pool.
The passage of the bill will attract more users to use stablecoins for lending (such as borrowing ETH with USDC as collateral), and Aaves deposit and borrowing volume may grow further (based on current trends). $AAVE holders benefit from protocol revenue (approximately $150 million in annual revenue in 2025) and increased token value.
$COMP (Compound): Compound’s TVL is about $3 billion, with stablecoin lending accounting for about 35%. Similar to Aave, an increase in stablecoin lending will benefit Compound, but its market share and innovation speed are lower than Aave, and the potential increase of $COMP may be relatively small.
Revenue Agreement
$PENDLE (Pendle): Pendle focuses on yield tokenization (TVL of approximately $500 million in 2025), and stablecoins are often used in its yield strategy (such as the USDC yield pool, with a current annualized yield of approximately 3%). The growth of the stablecoin market driven by the bill will increase Pendles yield opportunities (such as the yield may rise to 5%), and $PENDLE holders may benefit from the growth of protocol revenue (annual revenue of approximately $30 million in 2025).
Layer 1
$ETH (Ethereum): Ethereum hosts 90% of stablecoin and DeFi activities (DeFi TVL exceeds $100 billion in 2025). The increase in stablecoin usage driven by the bill will increase Ethereums on-chain transaction volume (currently gas fee revenue is about $2 billion per year), and the value of $ETH may rise due to increased demand.
$TRX (Tron): Tron is an important network for the circulation of stablecoins. Public data shows that the circulation of USDT on the Tron chain will be approximately US$60 billion in 2025, accounting for 46% of the total USDT. The increase in the use of stablecoins driven by the bill may increase Trons on-chain activities.
$SOL (Solana): Solana has become an important platform for stablecoins and DeFi due to its high throughput and low cost (TVL of about $8 billion in 2025, and USDC circulation on the chain of about $5 billion). Increased stablecoin usage will drive Solanas DeFi activity (current daily average transaction volume of about $1 billion), and $SOL may benefit from increased on-chain activity.
$SUI (Sui): Sui is an emerging Layer 1 (TVL of about $1 billion in 2025) that supports stablecoin-related applications (such as Thalas stablecoin and DEX). The growth of the stablecoin ecosystem driven by the bill will attract more projects to deploy on Sui, and $SUI may benefit from the increased activity of the ecosystem (currently about 500,000 daily active users).
$APT (Aptos): Aptos is also an emerging Layer 1 (TVL of about $800 million in 2025), and its ecosystem supports stablecoin payments. The increase in stablecoin circulation will promote Aptos payment and DeFi applications, and $APT may benefit from user growth.
Payment track
$XRP (Ripple): XRP focuses on cross-border payments (average daily transaction volume of about $2 billion in 2025), and its low cost and high efficiency can complement stablecoins. The increase in demand for cross-border payments of stablecoins driven by the bill (such as USDC for international settlement) will indirectly enhance the use of XRP (such as as a bridge currency), and $XRP may benefit from the increase in payment demand.
$XLM (Stellar): Stellar also focuses on cross-border payments (average daily transaction volume of approximately US$500 million in 2025) and has collaborated with IBM to launch the World Wire project, using stablecoins as bridge assets.
Oracle
$LINK + $PYTH: Oracles provide price data for stablecoins and DeFi. The expansion of the stablecoin market driven by the bill will increase DeFi’s demand for real-time price data, and the volume of on-chain data calls may increase.
But this is more like an extension of the sectors positive logic rather than a completely strong correlation.
RWA
$ONDO (Ondo Finance): Focuses on tokenizing fixed-income assets such as U.S. Treasuries. Its flagship product USDY (stable-income token backed by U.S. Treasuries) has been issued on chains such as Solana and Ethereum (USDY circulation will be approximately $500 million in 2025). The GENIUS Act requires stablecoin reserves to hold U.S. Treasuries, which is directly beneficial to Ondos U.S. Treasuries tokenization business. USDY may become one of the preferred reserve assets for stablecoin issuers. In addition, the increase in the circulation of stablecoins will drive retail investors and institutions to purchase USDY through USDC. Ondos demand for asset tokenization may increase, and $ONDO holders will benefit.
The US dollar, a bigger conspiracy
The United States push for stablecoin legislation can be considered an open conspiracy.
On the one hand, the United States wants a weak dollar policy to increase exports, but on the other hand, it does not want to give up the dollars status as a global currency.
By supporting the development of stablecoins, the United States has digitally extended the global influence of the US dollar without increasing the Federal Reserve’s liabilities—currently 99% of stablecoins are pegged to the US dollar.
At the same time, regulatory requirements that stablecoins must hold U.S. short-term Treasury bonds as reserves have cleverly found new buyers for U.S. debt, just as the size of U.S. debt held by Tether has surpassed many developed countries.
This policy not only maintains the global dominance of the US dollar, but also finds a reliable buyer for the United States huge debt, which is a two-birds-with-one-stone policy.
The passage of the GENIUS Act is undoubtedly a milestone in the crypto market. By binding stablecoins and U.S. debt, it provides a new path for the continuation of the U.S. dollar hegemony, while promoting the overall prosperity of the crypto ecosystem.
However, this conspiracy is also a double-edged sword - while bringing opportunities, its high dependence on U.S. debt, the potential suppression of DeFi innovation, and the uncertainty of global competition may all become hidden dangers in the future.
However, uncertainty is always a step forward for the crypto market.
Risks may be uncertain, but participants are all waiting for a certain bull market to come.
