Original | Odaily Planet Daily ( @OdailyChina )
Author | Dingdang ( @XiaMiPP )
Recently, the stablecoin bill GENIUS Act passed the Senate debate motion with 69 votes in favor and 31 votes against, and officially entered the revision stage. Perhaps boosted by this good news, Bitcoin broke through $110,000 after four months, setting a record high.
Currently, the global stablecoin market has exceeded $200 billion, gradually becoming the core pillar connecting traditional finance and the blockchain world. However, behind the prosperity are also problems that cannot be ignored - reserve transparency, systemic risks, and the long-missing regulatory framework.
Against this backdrop, the U.S. Senate Financial Services Committee proposed the GENIUS Act, intending to set an institutional tone for this rapidly developing field. The bill requires stablecoin issuers to hold 1:1 high-quality reserve assets (such as U.S. Treasury bonds or cash) and prohibits stablecoins with interest attributes to reduce potential financial risks. Previously, Odaily Planet Daily explained the details of the bill in detail in the article GENIUS Act is expected to pass the Senate, and stablecoin regulation has ushered in a historic breakthrough . Interested readers can go and check it out.
Now that the GENIUS Act has entered the revision phase, the mood in the crypto industry has also heated up. This bill, which is regarded as a milestone in the regulation of stablecoins in the United States, has sparked considerable discussion in the industry.
Review of Hotly Debated Terms
As a bill that has sparked widespread heated debate, it reflects the regulators dual concerns about the growing importance and potential risks of the stablecoin market.
On the surface, it only sets rules for stablecoins; but in depth, it attempts to clarify the following question: When stablecoins gradually assume an important role in the digitization of the US dollar and cross-border payments, who should be given the right to issue them? What kind of stabilization mechanism can be trusted? And how to prevent systemic risks from being transmitted on the chain?
To understand the true intention of this bill, we may have to start with the most concerned provisions:
The explicit prohibition of profitable stablecoins . Simply put, no issuer can pay interest or other forms of income for stablecoins held by users. This may seem simple, but it directly sounded the alarm for many DeFi projects that rely on income mechanisms. The original intention of the bill was to cut off the gray area between stablecoins and traditional high-risk and profitable products and prevent the breeding of potential financial bubbles, but it directly targets decentralized stablecoins, which is also a huge survival challenge for innovative stablecoins like Ethena.
Strict restrictions on the reserve system. The bill requires that all stablecoins must maintain a 1:1 reserve ratio, and these reserves must be high-quality, highly liquid assets, such as U.S. Treasury bonds, cash, or federally insured deposits. This is equivalent to insurance for stablecoins, which also means that projects that rely on algorithmic adjustments or pledge mechanisms to maintain stability may need to make difficult decisions in the future.
Restrictions on the qualifications of issuers. The GENIUS Act explicitly excludes certain special figures from participating in the issuance of stablecoins, such as Elon Musk and David Sachs, technology leaders with a certain social influence. The signal behind this is very clear: regulators do not want to see individuals or large technology companies have too much power to issue coins in the field of digital currencies, so as not to cause a crisis of trust or market misjudgment.
In addition to the above three core clauses, another point worth discussing is that the original draft bill allows some foreign stablecoins to circulate in the United States, as long as their issuing countries have a regulatory framework similar to the GENIUS Act. However, the latest revised version handed this discretion to US Treasury Secretary Scott Bessant. This not only strengthens regulatory flexibility, but also gives the government greater sovereign control space.
Four regulations and four thresholds, each of which redefines “who can play and how to play”. While protecting investors, it also makes it clear that the world of stablecoins is no longer a hotbed of “wild growth”.
Multiple perspectives: Is it a booster that paves the way for DeFi, or a shackle that constrains innovation?
Supporters and skeptics are all speaking out. Odaily Planet Daily sorted out the views of several key industry figures, presenting the complex reality behind this regulatory storm from different angles.
Investment perspective: The new financial landscape is being reconstructed
Although the GENIUS Act has only taken its first step, the consensus in the crypto industry is that it is only a matter of time before it is finally passed. BITWU.ETH said: “ This bill opens up the imagination of Crypto for the next decade.”
He believes that once it is passed, the most worthwhile asset to bet on is ETH, the underlying infrastructure of stablecoins and DeFi; followed by BTC, the representative of safe-haven assets. The real potential for explosion is the entire RWA (real world asset) track. As he said, BTC is the biggest fish in the pond, and ETH is the irrigation pipe. But what is really worth betting on is the new financial landscape that emerges after the water flows.
Chris Burniske, partner at Placeholder, is also optimistic about Ethereums position. He pointed out that the GENIUS Act may have the most direct benefit to ETH because Ethereum has a huge stablecoin ecosystem, solid DeFi infrastructure, and a long-established institutional cooperation network. SOL follows closely behind, while TRX may become an overlooked dark horse due to historical factors.
Macro perspective: Another piece of the puzzle for the digitalization of the US dollar
For policymakers, the GENIUS Act is more than just “regulation”; it could be an important part of the dollar’s quest for dominance in the digital world.
Bo Hines, executive director of the Trump Digital Asset Advisory Committee, said that the GENIUS Act will consolidate the position of stablecoins in the US dollar ecosystem, promote the modernization of payment infrastructure, and improve transaction efficiency and transparency. He believes: Digital asset technology is the core of the next generation of finance, and the United States is expected to take a leading position in the global financial technology field through this bill.
@CryptoPainter_X pointed out that the bill may reflect a certain debt reduction strategy of the government. Although it is not the main narrative, it is still beneficial to crypto assets in the long run.
As for foreign stablecoins (such as USDT and TUSD), the door to the US market is not completely closed, but the entry threshold has been significantly increased. @BTCBruce 1 pointed out that the GENIUS Act adds two new requirements: one is that foreign stablecoins must comply with US audit and information disclosure standards, and the other is that the president has the right to veto their circulation qualifications based on national security. This means that the digital dollar is quietly building a global gatekeeper mechanism.
Twitter user @0x ulai put it more directly: The GENIUS Amendment is essentially putting a tight rein on the financial ambitions of big tech companies - preventing Meta, Google, and Microsoft from messing around in the financial circle.
Project perspective: Is compliance an opportunity or a threshold?
Coinbase CEO Brian Armstrong explicitly supports the bill, believing that its clear regulatory framework will promote the legalization of stablecoins and promote market growth. As one of the main issuance platforms of USDC, Coinbase will obviously benefit from it, especially in the context of the increasing compliance needs of institutional clients.
For decentralized stablecoin projects, the situation is not optimistic. Alex Xu, partner of Mint Ventures , pointed out that although the GENIUS Act is hotly debated as a boon to stablecoin concept projects (such as Ethena, Sky, Liquity, Aave, etc.), if the bill is formally passed, most of these projects will find it difficult to meet compliance requirements, and may instead pave the way for traditional financial institutions to enter the market, making the market more competitive.
@cmdefi added: “Most of the existing projects do not meet the requirements of the bill. This is more like a framework for new institutions. The demand for fully decentralized stablecoins still exists, such as anti-censorship and non-dollar anchoring, but the path to achieve it will be more tortuous.”
Feng Liu, former editor-in-chief of ChainNews, pointed out from another perspective that the ban on interest-bearing stablecoins in the bill will force many decentralized projects to rethink their product structures. In his view, this change is more likely to prompt decentralized projects to further strengthen their decentralized characteristics rather than trying to integrate into the compliance system.
