Washington just drew a line in the sand for digital currency. The GENIUS Act, officially signed on 18 July 2025, represents America’s first real attempt to put guardrails around payment stablecoins. Backed by both parties, its mission is clear – Encourage safe innovation, keep consumers from getting burned, and ensure the U.S dollar remains king in the digital era.
At its core, the law targets “payment stablecoins” – Digital tokens pegged to the dollar. Only specific, approved issuers, like bank offshoots or federally vetted non-banks, get a license to operate. The non-negotiable rule? Every digital dollar must be backed by a real dollar or a short-term Treasury bill, with audited proofs published every month.
Here are three ways this new law will ripple across the globe –
A new global template emerges
America is now setting the pace for crypto rules worldwide. With the GENIUS Act, the U.S has essentially published a playbook that other countries are sure to read. Since most of the world’s stablecoins are tied to the dollar anyway, this move carries immense weight.
Any foreign company wanting to offer its stablecoin to Americans will have to play by these new, tough rules, forcing a global standard.
This American blueprint doesn’t exist in a vacuum; it lands alongside the EU’s own Markets in Crypto-Assets (MiCA) regulations. While the two frameworks aren’t identical, they sing from the same hymn sheet on the big stuff – Solid reserves, official approval for issuers, and a safety net for users.
Their shared decision to ban interest payments on stablecoins is telling. It shows a coordinated effort to stop these digital dollars from looking and acting like bank deposits or securities, which could create a more unified regulatory front across the Atlantic.
Big money gets a green light, reshuffling the market
For years, big money has sat on the crypto sidelines, spooked by the legal chaos. The GENIUS Act could be the green light they’ve been waiting for. Strict rules on reserves, mandatory audits, and consumer safeguards are designed to strip away the wild-west reputation of stablecoins, making them palatable for cautious corporate treasuries and asset managers.
However, this new legitimacy comes at a price. The steep costs of compliance will likely squeeze out smaller startups, clearing the field for a handful of giant, well-funded players. Legacy financial giants, already equipped with compliance departments, are now perfectly positioned to jump into the stablecoin arena, cranking up the competitive heat.
Even the Act’s carve-out for state-regulated issuers isn’t much of an escape hatch. Especially since it demands state rules be nearly identical to the federal ones, keeping the bar high for everyone.
Dragnet for dirty money gets tighter
The law also throws a wrench in the works for money launderers. It officially labels stablecoin providers as “financial institutions,” forcing them to play by the same anti-money laundering (AML) rules as traditional banks under the Bank Secrecy Act. This means they must follow all U.S. sanctions and AML protocols.
This decision locks the U.S. into step with global standards pushed by the Financial Action Task Force (FATF), the world’s anti-crime-money watchdog. FATF has been hounding countries to enforce its “Travel Rule,” which makes crypto transfers as traceable as bank wires by requiring data on who’s sending and who’s receiving.
By yoking stablecoin issuers to the Bank Secrecy Act, America is effectively hard-coding the Travel Rule into its system. Given how many nations have dragged their feet on FATF’s recommendations, this decisive action from the U.S will undoubtedly put pressure on the rest of the world to get its act together.