jakiro
Source: CryptoSlate
If 2024 is the “Year of the Dragon”, then 2025 is the “Year of Stable Coins”.In particular, digital assets backed by the US dollar have become the focus and have even gained recognition from the highest level.
In March this year, the DeFi platform controlled by the Trump family launched the World Liberty stablecoin USD1. In May, Vice President JD Vance delivered a speech at the Bitcoin conference, clarifying the government’s positive position on stablecoins and believing that it can become a “power multiplier of the US economic strength.” This statement triggered the audience.
Subsequently, stablecoin issuer Circle completed a $20 billion IPO, triggering what the Bankless podcast duo called “Summer of Stablecoin”.Last week,The GENIUS Act was officially signed into law and became the first legislation in the United States to directly regulate digital assets, opening a turning point for global finance.
Even Jamie Dimon, who is personally skeptical about cryptocurrencies, joined the move.Although he publicly stated that he did not understand the attractiveness of cryptocurrencies, there was a gap between his words and deeds: this largest U.S. bank has long been a pioneer in blockchain technology, and has been developing its own stablecoin JPM Coin since 2019.
So, what do these latest developments in the global value transfer field mean?What impact does the GENIUS Act have on the future of cryptocurrencies, traditional finance (TradFi) and the global economy?Experts in the fields of technology, law and finance interpret this and analyze the possible technological advances in the coming years.
Core Summary: What is the GENIUS Act?
If you have been isolated from the world, let me take you out of the fog now.The full name of the GENIUS Act is “Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025”, but the term “GENIUS” is more catchy.This is the first federal law in the United States to comprehensively regulate “pay stablecoins” (i.e. digital tokens pegged to fiat currency).
The GENIUS Act established a long-awaited licensing and regulatory framework for stablecoin issuers, requiring stablecoins to be supported with 1:1 full reserve fund, implement strict consumer protection measures, and lay a clear legal foundation for stablecoins to integrate into the mainstream financial system.
The law also prohibits non-financial companies such as Facebook and Google from issuing stablecoins without special approval, and imposes severe penalties on violations (violators can be fined up to $200,000 per day, and criminal penalties include up to five years in prison).
Why is the GENIUS Act so important?Because in the United States, stablecoin issuers have been in regulatory ambiguity and uncertainty for many years, and the bill provides a federal legal framework for the first time, clarifying operating standards.As international law firm Winston & Strawn LLP said in a recent blog:
“The bill brings stablecoin issuers into the banking class regulatory system. For many businesses, this means hiring compliance officers, investing in risk management systems, and potentially working with experienced regulated agencies to meet the standards set by Congress.”
Utkarsh Ahuja, founder of the fast-growing crypto investment fund Moon Pursuit Capital, shared his views on the breakthrough significance of the GENIUS Act:
“The GENIUS Act is not only a major advance in the cryptocurrency space, but also an important step in the U.S. leadership in global finance. For the first time, we have established clear rules for stablecoins, which are at the heart of an open, programmable monetary infrastructure. Regulatory uncertainty has long hindered the industry and forced developers to turn overseas. The bill changed that, providing legal clarity for stablecoins and laying the foundation for the wider use of cryptocurrencies.”
Genna Garver, a partner at Troutman Pepper Locke LLP of international law firm Troutman Pepper Locke LLP, also shared her views with CryptoSlate readers:
“This is a watershed moment for institutional financial services. The GENIUS Act authorizes tokenization of fiat tokens and related regulation to enable legalization of digital dollarization.”
The perfect storm of digital assets: a comprehensive upgrade of tailwind
Alchemy is a developer platform that processes over $100 billion in transactions for companies within the ecosystem every year (from Fortune 500 companies such as Robinhood, Visa, JPMorgan Chase, PayPal, to crypto-native companies such as Coinbase and Circle).Its chief technology officer Guillaume Poncin said in a written comment:
“The GENIUS Act brings long-awaited clarity that institutions have helped legalize programmable currencies at the speed of the Internet.The importance of this legislation is that it reduces regulatory uncertainty that hinders institutional adoption.”
In addition, the introduction of the GENIUS Act is not an isolated incident.The government’s current support for digital assets is booming, and the downwind is fully upgraded.The gradual lifting of cryptocurrencies during Biden’s administration and the abolition of restrictive legislation such as SAB 121, which bans American banks from providing digital asset custody services, has jointly created a perfect storm.Poncin said excitedly:
“We see the immediate interest of large banks that were previously cautious. Now, with the implementation of the GENIUS Act, we believe that all large banks will issue or support stablecoins in some form. This will usher in a new era of programmable currencies that are trustworthy, regulated and born for the speed of the Internet scale.”
The bill will also strengthen the dominance of the dollar, promote innovation based on the dollar, and consolidate the dollar’s global reserve currency status for decades to come.Chris Perkins, president of crypto-native investment firm CoinFund, commented:
“The GENIUS Act will be in history and become the foundational law that promotes cryptocurrencies to become mainstream asset classes. By catalyzing innovation in the US’s most core export product, the US dollar, the bill will allow the US dollar to maintain its global reserve currency status for decades to come, enhance national security, and unlock financial opportunities for the world.
Stablecoins are obviously practical by providing low-cost, 7×24-hour payment services.In addition, by providing seamless and efficient access to the US dollar for developing countries, stablecoins can also serve as a store of value when local monetary policy fails.”
Stablecoin “killer apps” emerge
The purpose of stablecoins is far beyond the original “wealth storage tool that circumvents the volatility of digital assets such as Bitcoin and Ethereum”, and has now been recognized as a critical financial infrastructure by milestone bills.So, what major application scenarios will the GENIUS Act give rise to?What can we expect in the next few years?Ahuja commented:
“The GENIUS Act will unlock real innovations including instant remittances, AI native payments, and global trade without intermediaries.”
Poncin added: “The opportunity for stablecoins is not in holding, unless it is used to obtain revenue from DeFi. The real opportunity is in companies issuing their own stablecoins, such as payment processors integrating stablecoins and fintech companies launching their own tokens.
We are seeing fintech companies earn considerable revenue from stablecoin reserves through fund management.With the deposit scale of US$2-3 billion, the potential annual income can reach more than US$100 million.The real value creation of stablecoins lies in how they empower the new financial system.”
In addition to attempting to issue its own stablecoins, JPMorgan made headlines this week for allowing customers, especially institutional clients, to use Bitcoin as collateral for loans.Thanks to the GENIUS Act, the bank is developing a new plan that allows customers to pledge Bitcoin or Ether to obtain cash loans, similar to the model of using stocks or real estate mortgages.
While JPMorgan has allowed customers to borrow through crypto ETFs, accepting direct crypto assets as collateral remains a paradigm shift for institutions led by the industry’s most outspoken critics.
The impact of the GENIUS Act covers the entire industry, and DeFi platforms and tokenized RWA have also attracted much attention.Orest Gavryliak, chief legal officer of DEX aggregation pioneer 1inch Labs, said:
“Tokenization technology has become the core focus of traditional financial giants such as BlackRock and JPMorgan Chase, because it significantly optimizes the current financial standard system and greatly improves liquidity accessibility. With the help of blockchain technology, tokenization breaks through geographical restrictions, allowing limited and decentralized markets to integrate and obtain uninterrupted multi-source liquidity in the world in real time.”
Poncin further explained: “Banks will provide customers with ‘institutional opportunities’ such as private equity transactions, lending through holdings. Small businesses can ultimately take advantage of the advantages of the telecommunication era to pay overseas employees at a low cost. What we are about to witness is not one, but the emergence of hundreds of stablecoins ‘killer applications’ that will empower value exchange and creation in ways that would be unimaginable months ago.
Tokenized Treasury bonds are growing significantly.Stablecoin issuers such as Tether hold large amounts of U.S. debt.We have seen the market’s tokenization interest in traditional illiquid assets such as private equity credit and real estate to release liquidity.At the same time, infrastructure that makes RWA and DeFi protocols composable are also constantly evolving.The real innovation lies in making these assets programmable, which will spawn new financial products such as automated lending based on tokenized assets, or smart contracts that can interact with real-world collateral.”
Will the GENIUS Act give birth to a “super DeFi summer”?
An interesting provision in the GENIUS Act is to prohibit the payment of interest or income to stablecoin holders, which may trigger an explosion of demand for DeFi earnings opportunities.Perkins says:
“Under the GENIUS Act, stablecoins do not pay interest to end users, so stablecoins become depreciating assets. Holders will seek profits, and that’s where DeFi comes in. If the Ministry of Finance’s predictions are correct, trillions of dollars of stablecoins will enter the market, then we will usher in a ‘Super DeFi summer’ as users maximize returns through multiple earning strategies. Users will be attracted by income-type vaults and entrust AI agents to optimize returns.
As the United States returns to its leading position, countries around the world will have to accelerate the optimization of their own stable currency policies.The $7.5 trillion daily foreign exchange market will benefit from it.Please pay close attention to this area.”
Will Beeson, founder of MultiLiquid and former co-head of the tokenization platform of Standard Chartered Bank, commented: “The full ban on stablecoin returns marks a key turning point. Capital has begun to shift. Ethereum outperforms Bitcoin as traders seek returns through Ethereum native protocols and tokenized funds.
The stablecoin market is entering a new stage, and only institutions that can use capital efficiently can survive.But there is a bottleneck: stablecoins can run 24/7, while government bonds cannot.Liquidity infrastructure that bridges this gap is now a core priority.”
Gavryliak added: “The regulatory clarity brought by the GENIUS Act allows businesses and institutions to use stablecoins to carry out fast and low-cost cross-border payments, fund optimization and real-time settlement, bypassing traditional financial banking channels and unlocking operational efficiency. This is a positive progress for DeFi.
It also provides security for institutions and other traditional financial players to invest in the field.Institutions that previously only tried the waters can now fully enter the market under a clear framework.”
Will politics hinder this revolution?
As digital assets become increasingly partisan issues and core Democrats such as Elizabeth Warren still lead the anti-crypto camp, will the GENIUS Act or other relevant legislation face the risk of abolition if the Democrats return to power?In addition, the Trump family clearly benefited from digital assets. Is this obvious conflict of interest a threat?Poncin thinks it’s too late:
“The momentum of cryptocurrency adoption goes beyond political divisions. We work with institutions in various fields, and they all recognize the potential of blockchain. The abolition of SAB 121 has a cross-party basis, with cryptocurrency supporters in both parties. Large banks, asset management companies and payment companies are scrambling to blockchain because it provides better technology for settlement and programmable currencies.
also,The cryptocurrency industry has shown resilience over the years in a variety of challenges.The key is that institutions are building real utility on the blockchain. These application scenarios solve real problems such as settlement speed, operating costs, 24/7 availability, and this is the driving force for lasting adoption.”
Garver is also optimistic about the lasting changes brought about by the GENIUS Act: “During the legislative process, there have been many attempts to debate and propose amendments on conflicts of interest, but these amendments have not been included in the final bill. Today, the final legislation allowing payment of stablecoins has been introduced, and the adoption of digital assets may depend more on the application scenario.
Similar to the popularity of the previous generation of ATMs, people will eventually accept it when a technology is convenient and beneficial..I don’t think potential users will wait and see because of protests.I believe the trend is no longer reversible and cryptocurrencies will quickly integrate into the core of the U.S. economy, global economy and financial services industry.”
Faced with global debt expansion, liquidity expansion, geopolitical uncertainty and falling interest rates, the US’s friendly regulation of digital assets may mean “this train is unstoppable.”As Ahuja emphasizes:
“Frankly speaking, this is the most constructive macro environment you can ask for in terms of addressing event-driven risks such as tariffs or escalation in the Middle East. But from a purely market structure and liquidity perspective, the conditions are ripe.
We are entering a rare window period, with fundamentals, liquidity and macro dynamics improving in all respects, and this is the moment to unlock the maximum upward space.”
