Key Takeaways
How has the bill impacted stablecoin growth?
Stablecoin supply has nearly doubled on a year-on-year basis.
What’s next for the industry?
It must contend with being turned into a geopolitical and electoral issue going forward.
A year ago, the stablecoin market cap was about $170 billion and was only restricted to crypto trading and payments.
Only tech-native players like PayPal had warmed up to its true potential and launched its stablecoin PYUSD. The rest remained cautious due to a lack of regulatory clarity during the Biden era.
Then came the shift.
The pro-crypto Donald Trump Administration rolled out a U.S. stablecoin bill, the GENIUS Act, in record six months after assuming office. The results?
Every player jumped on it. From payment providers like Visa to banks like JPMorgan, everyone is now eyeing a piece of the pie.
Source: a16z
With clear rules, stablecoins have nearly doubled in market cap to $308B, crossed $1 trillion in monthly transfer volumes, and decoupled from the broader crypto market. Analysts at a16z crypto said that it signaled “organic adoption.”
But to what extent will the bill impact the market?
Assessing the impact of the GENIUS Act
The bill’s market influence lies within its provisions. The GENIUS Act requires that all stablecoins be backed 100% with liquid assets like U.S. Treasury bills and cash equivalents.
Source: GENIUS Act
As such, holders would be made whole again swiftly if the issuer goes bankrupt. But most importantly, it would reinforce the U.S. dollar as the world’s reserve currency, besides helping to service U.S. debt.
According to the White House, the Act would,
“Generate increased demand for U.S. debt and cement the dollar’s status as the global reserve currency by requiring stablecoin issuers to back their assets with Treasuries and U.S. dollars.”
Most of the $308 billion stablecoin supply is USD-based, reinforcing the White House’s outlook.
However, other countries have cautioned that the U.S. dominance in stablecoins could undermine local monetary authority and distort markets.
In fact, China has halted the experimentation with foreign stablecoins in Hong Kong. Meanwhile, Russia views the U.S. push for crypto adoption with suspicion, seeing it as a potential strategy to devalue Russian debt and destabilize the global economy.
In short, stablecoins are no longer just a financial tool; they’ve become a geopolitical flashpoint.
The Act also prohibits stablecoin rewards. But issuers have bypassed this using intermediaries. In fact, the fastest-growing stablecoins like PYUSD offer yield. With the massive demand for yield, the $3 trillion market target by 2030 could be feasible.
But banks are against the stablecoin rewards. And the ensuing fight and intensive lobbying between banks and crypto could play out in the 2026 and 2028 elections.
In sum, the U.S. stablecoin bill reignited the sector’s growth with a potential target of $3.7 trillion. However, the industry has also become a geopolitical and electoral issue.