The ground just shifted for digital money in America. With the signing of the “Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act” on 18 July 2025, the United States has finally laid down a federal rulebook for payment stablecoins.
This move is expected to open the floodgates for a market potentially worth hundreds of billions, fundamentally reshuffle the deck for stablecoin companies, and anchor the U.S. dollar in the next generation of finance.
Forged grueling bipartisan talks, the GENIUS Act is designed to pull the booming stablecoin market out of the regulatory gray zone. The government’s bet is that by creating clear guardrails for how these digital dollars are issued and managed, they can be safely woven into the fabric of the economy.
This is expected to fuel everything from instant global payments to decentralized finance and corporate cash management.
What do the news rules actually mean?
At its heart, the GENIUS Act tells stablecoin issuers one thing – You are now a specific type of financial institution, and banking regulators are watching. This decision rips payment stablecoins out of the legal purgatory where they were awkwardly debated as securities or commodities.
The law’s core commandments are strict –
Issuers must now back every single token with an equal amount of cash or short-term U.S Treasury bills. The days of using more esoteric assets are over. The framework creates two paths to legitimacy: Companies can get a federal license, or smaller state-chartered firms with less than $10 billion in circulation can operate under state rules. So long as those rules are just as tough as the federal ones.
To build trust, the era of quarterly attestations is finished. Companies must now publish monthly, publicly audited breakdowns of their reserves. The law also builds in new protections for users, forbidding issuers from paying interest and ensuring that if a company goes bust, stablecoin holders are first in line to get their money back.
Finally, it officially ropes all issuers into the Bank Secrecy Act, making serious anti-money laundering and customer-vetting programs mandatory.
Chasing a $200 billion prize
The certainty brought by the GENIUS Act is predicted to spark a gold rush across several markets, creating the foundation for the projected $200 billion opportunity.
The biggest long-term prize is the tokenization of real-world assets (RWAs). Turning things like real estate deeds or stakes in private companies into digital tokens could create a market that analysts believe might hit anywhere from $10 to $16 trillion, with some whispers of $30 trillion, by 2030. Regulated stablecoins are set to become the blood in the veins of this enormous new ecosystem.
Source: RWA.xyz
Another target is the creaky, expensive architecture of global remittances. The world is on track to send over $320 trillion across borders by 2030, and stablecoins offer a way to do it faster and cheaper. The GENIUS Act gives U.S companies a solid legal footing to grab a piece of a digital remittance market that’s projected to hit $67.4 billion by 2033.
Within decentralized finance (DeFi), where on-chain lending is already booming, regulated stablecoins are expected to become the go-to asset for collateral and exchange. The market for DeFi lending already topped $51 billion in outstanding loans as of mid-2025.
Finally, corporate America is starting to see digital assets as more than just a curiosity. A clear legal framework now allows companies to use dollar-backed tokens for treasury management, potentially moving billions in corporate cash off the sidelines and into the digital economy.
A new pecking order – The stablecoin shakeout
The GENIUS Act’s tough standards will inevitably crown new kings and dethrone old ones.
Circle, the Boston company behind USDC, looks like it was built for this moment. Its entire model—reserves in cash and T-bills, voluntary monthly reports—practically mirrors the new law. By getting ahead of regulations in both the U.S and Europe, Circle is perfectly positioned to attract the institutional money that craves legal safety above all else.
Tether, the industry’s titan and issuer of USDT, is now in a bind. Its dominance was built on a reserve strategy that included corporate bonds, metals, and other assets that are now explicitly forbidden for U.S.-regulated issuers. To get compliant, Tether would have to completely re-engineer its business model, likely sacrificing the profitability it earned from its investment portfolio.
Source: Coingecko
The law forces the competition to be about compliance, not investment yield – A game Circle has been playing for years.
America’s approach vs. Europe’s MiCA
While America just took its first big swing at crypto rules, it’s playing a different game than Europe. The EU’s Markets in Crypto-Assets (MiCA) regulation is a sweeping, all-encompassing framework for nearly every type of digital asset across its 27 nations.
MiCA demands stablecoin issuers get an e-money license and maintain 1:1 reserves, much like the GENIUS Act. However, America’s laser focus on stablecoins leaves the rest of the U.S crypto industry still guessing. This transatlantic split in strategy could become a major headache for companies trying to operate on both continents.
Backlash and hidden dangers
Not everyone is celebrating. The bill has been fiercely attacked by consumer groups and privacy advocates.
Consumer protection organizations are calling it a “giveaway to the crypto industry,” pointing out that it doesn’t offer federal deposit insurance for stablecoin holdings. They warn that without guaranteed payback timelines or the application of existing consumer laws, people are still vulnerable if an issuer fails.
Privacy experts are sounding the alarm about government overreach. The law’s anti-money laundering rules put issuers squarely under the Bank Secrecy Act – A move critics say turns stablecoins into a potential tool for mass financial surveillance. Senator Elizabeth Warren has lambasted the bill for what she sees as a lack of basic consumer and national security safeguards.
The GENIUS Act isn’t an endpoint; it’s the start of a high-stakes experiment. Washington has laid down the rules, but whether they foster genuine innovation or just a more regulated casino will be determined by the market itself and the watchdogs tasked with policing it.