GENIUS sets new stablecoin rules but remains vague on foreign issuers
The signing of the GENIUS Act into law established the first comprehensive regulatory framework for US-issued stablecoins. Supporters argue it will enhance trust, drive mainstream adoption and bolster the dollar’s status as the global reserve currency.
With stablecoins now gaining traction in global finance, the GENIUS Act could also prove a boon for the developing world, attract institutional interest and drive a resurgence in decentralized finance (DeFi).
However, concerns remain over unresolved issues, such as the regulation of foreign issuers, doubts about the ban on yield‑bearing stablecoins and the potential dominance of corporate and traditional finance players.
Industry experts surveyed by Cointelegraph agree that the GENIUS Act is a landmark event for the US blockchain and stablecoin sector, if not the global crypto industry.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
GENIUS Act’s foreign stablecoin “loophole”
A major weakness of the GENIUS Act is what the Atlantic Council calls the “Tether loophole.” The US think tank argued in a blog post that the US stablecoin law did not “adequately” regulate offshore stablecoin issuers.
The law aims to bring order to US stablecoins by imposing strict rules on reserves, financial disclosures and sanctions compliance. This could put local issuers at a competitive disadvantage and potentially encourage new issuers to incorporate in less‑demanding jurisdictions offshore.
“The foreign issuer loophole was not sufficiently fixed,” Timothy Massad, a research fellow at the Kennedy School of Government at Harvard University and former chairman of the US Commodity Futures Trading Commission, told Cointelegraph.
Industry experts surveyed by Cointelegraph agree that the GENIUS Act is a landmark event for the US blockchain and stablecoin sector, if not the global crypto industry.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
Industry experts surveyed by Cointelegraph agree that the GENIUS Act is a landmark event for the US blockchain and stablecoin sector, if not the global crypto industry.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
“Banks, fintechs and even large retailers — essentially anyone with significant consumer or institutional distribution — will all be considering issuing their own stablecoin,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, told Cointelegraph, adding that a stablecoin strategy will now be an integral part of all payments and financial services companies.
Stablecoin issuance goes mainstream with GENIUS
The GENIUS Act opens doors for giant US commercial banks like Bank of America to issue their own stablecoins, while mega retailers like Walmart and Amazon are also reportedly exploring stablecoin issuance.
The prospect of regulated corporate stablecoin issuers raises questions about how crypto‑native stablecoins like Tether and USDC will be affected.
Most of the new competition will focus on the US market, which presents a more significant challenge for USDC.
Meanwhile, Keith Vander Leest, US general manager at London‑based stablecoin infrastructure startup BVNK, said that new players won’t necessarily flood the market. Non‑crypto native firms launching stablecoins will probably move cautiously, beginning with small‑scale pilot programs to build comfort and competency.
It almost seems counterintuitive, but the removal of yield on stablecoins could actually be good news for Ethereum‑based DeFi as the main alternative for passive income generation.
Overall, “the signing of the Act is a significant milestone,” Massad said. (The text repeats the same paragraph several times; it remains unchanged.)
