![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
Cryptocurrency News Articles
GENIUS Act Could Be the Spark That Ignites a Global Race Towards Stablecoin Dominance
Mar 14, 2025 at 08:58 pm
It’s been a long journey from the entry of stablecoins into DeFi spaces to their adoption by mainstream finance industries.
It’s been a long journey from the entry of stablecoins into DeFi spaces to their adoption by mainstream finance industries. Regulations are always slow to respond to technological innovations. But with the proposed GENIUS (Guiding and Establishing National Innovation) Act we might be witnessing a step towards the largest banking and fintech industries, including central banks and G-SIBs, widely adopting stablecoins as a means of transferring money.
Senator Bill Hagerty introduced the GENIUS Act in February 2025, co-sponsored by senators Cynthia Lummis, Kristen Gillibrand and Tim Scott. Stablecoin proponents have long called for something that would bring these assets to the mainstream. But what does this hefty bill achieve, and how will it change the landscapes of banking and fintech?
I’ve said it once, and I’ll say it again: this is the year for digital assets.I joined @SenatorHagerty to introduce the GENIUS Act, fulfilling @POTUS's promise to make America the capital of crypto. 🇺🇸
We've reached this milestone thanks to the tireless work of many. 🤝
— Senator Bill Hagerty (@SenatorHagerty) February 27, 2025
Why are Stablecoins Becoming Mainstream?
We have written a lot about stablecoins at Disruption Banking. We’re one of the few outlets to have really investigated the ‘Sand Dollar,’ the unlikely currency which revolutionized stablecoins from the Bahamas.
Stablecoins are a cryptocurrency with a value pegged to another asset. This can be a fiat currency, another cryptocurrency, or a commodity such as gold.
Stablecoins are especially revolutionary for cross-currency transactions and remittances. They can provide instant payments with increased confidence for both parties, without currency conversion or intermediary processing fees.
In some ways, it’s helpful to think of the Euro as a sort of proto-stablecoin. A central-bank digital currency (CBDC) is a digital fiat currency which, in the same way, would provide a stable value for cross-border payments.
The Sand Dollar brought financial services to unbanked and under-banked communities, but faced regulatory problems. Improved legislative clarity for issuers of stablecoins, addressing stablecoin’s cybersecurity and criminal threats, could do the same on a global scale.
What’s in the GENIUS Act?
The GENIUS Act is intended to establish clear legislative guidelines for institutions looking to issue stablecoins. Regulatory concerns made banks and fintech firms cautious in the past, but the bill could make the adoption of stablecoins much easier and less risky.
The bill is bipartisan but led by Republicans, so the regulations would provide guidelines without a lot of federal oversight. In fact, the latest draft of the bill would see regulatory decisions being shifted to a state level for issuers under $10 billion. The goal is to provide regulations for issuers entering the market without sacrificing a financial environment that fosters innovation.
If a stablecoin doesn’t have enough in assets to back a transaction, the coin could lose its peg. So, the bill would also ensure that issuers of stablecoins meet certain reserve requirements. To ensure a 1:1 backing of the stablecoin, issuers will be required to maintain enough assets in reserve to collateralize customer transactions. The assets in the reserve must be the same assets that are backing the coin.
Additionally, the updated bill introduces anti-money laundering and counter-terrorism regulations, further destigmatizing stablecoins in mainstream finance. This would be significant as illegal misuse is one of the most common complaints launched against stablecoins, and cryptocurrencies in general.
The bottom line is that the bill aims to encourage the merging of traditional banking and fintech with stablecoins. But it aims to do so by ensuring that any new issuer has the financial and technological capacity to do so.
Criticism of the GENIUS Act
The bill is not without its critics. Elizabeth Warren, for one. Warren argues that the bill does not comprehensively cover the illicit behaviour made possible by stablecoins. For example, though the bill addresses money laundering and terrorism, Warren argues the technology can be used to evade financial sanctions. Additionally, she is unconvinced by the bill’s protection of consumer funds, which has been a problem for stablecoin issuers in the past.
Stablecoin excitement may obscure such threats. On the one hand, any new regulation will be progress towards a better payment system. But it could be more damaging in the long run to rush a bill into law that does not fully address its potential dangers.
Fintechs, Banks, and the Stablecoin ‘Gold Rush’
Banks and Fintechs are rushing to join the “Stablecoin Gold Rush.” Bank of America recently pledged to launch its own stablecoin if better legislation passes. Last month, Stripe acquired stablecoin company Bridge for $1.1 billion and added stablecoins as a method of payment. And Standard Chartered last month announced it would be launching a Hong-Kong
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- Sleep Token are back with Even In Arcadia, their fourth album and first under RCA Records, set for release on May 9.
- Mar 16, 2025 at 01:05 pm
- The album follows their acclaimed third album,Take Me Back to Eden. To celebrate the announcement, the group has unveiled their new single, “Emergence,” which is also available on seven-inch vinyl.
-
-
-
-
-
-
- ADA price analysis: As the weekend approaches, the overall cryptocurrency market has begun to output: to recover, showing signs of an upward rally.
- Mar 16, 2025 at 12:45 pm
- According to expert technical analysis, ADA has formed a bullish inverted head and shoulders pattern and is now on the verge of a breakout.
-
-
- Bitcoin [BTC] Options market exhibits moderately bullish sentiment, as reflected by the call-to-put Open Interest ratio
- Mar 16, 2025 at 12:45 pm
- The Call Open Interest stood at 11873.52 contracts at press time, surpassing Put Open Interest at 8594.58 contracts, resulting in a put/call ratio of 0.72. This means that more traders have been betting on BTC's price hike shortly.