Original | Odaily (@OdailyChina)
Author | Ding Dong (@XiaMiPP)
Recently, the stablecoin bill 'GENIUS Act' passed the Senate debate motion with 69 votes in favor and 31 votes against, officially entering the revision stage. Possibly boosted by this positive news, Bitcoin broke through $110,000 for the first time in four months, creating a new historical high.
Currently, the global stablecoin market size has exceeded $200 billion, gradually becoming the core pillar connecting traditional finance and the blockchain world. However, behind the prosperity, there are unavoidable problems - reserve fund transparency, systemic risks, and the long-missing regulatory framework.
Against this background, the US Senate Financial Services Committee proposed the 'GENIUS Act', intending to set an institutionalized tone for this rapidly developing field.The bill requires stablecoin issuers to hold 1:1 high-quality reserve assets (such as US Treasury bonds or cash) and prohibits stablecoins with interest attributes to reduce potential financial risks. Previously, Odaily detailed the bill's specifics in the article 'GENIUS Act Likely to Pass Senate, Stablecoin Regulation Sees Historic Breakthrough', which interested readers can refer to.
Now, the 'GENIUS Act' has entered the revision stage, and the crypto industry's sentiment has also heated up. This bill, viewed as a milestone in US stablecoin regulation, has sparked significant discussion in the industry.
Review of Hotly Debated Clauses
As a bill generating widespread discussion, it reflects regulators' dual focus on the growing importance and potential risks of the stablecoin market.
On the surface, it only establishes rules for stablecoins; but looking deeper, it attempts to clarify: When stablecoins gradually assume the crucial role of USD digitization and cross-border payments, who should be granted issuance rights? What stabilization mechanism can be trusted? And how to prevent systemic risks from spreading on-chain?
To understand the bill's true intent, we might start with the most discussed clauses:
Explicit prohibition of "yield-bearing" stablecoins. Simply put, no issuer can pay interest or other forms of returns for users' held stablecoins. This clause seems simple but directly sounds the alarm for many DeFi projects relying on yield mechanisms. The bill's intention is to cut the blurry zone between stablecoins and traditional high-risk yield products, preventing potential financial bubbles, but it directly targets decentralized stablecoins, presenting a huge survival challenge for innovative stablecoins like Ethena.
Strict limitations on reserve fund systems. The bill requires all stablecoins to maintain a 1:1 reserve ratio, and these reserves must be high-quality, highly liquid assets like US Treasury bonds, cash, or federal deposit insurance. This is equivalent to "insuring" stablecoins and means that projects relying on algorithmic or pledge mechanisms for stabilization may need to make difficult choices.
Restrictions on issuer qualifications. The GENIUS Act explicitly excludes certain "special individuals" from stablecoin issuance, such as tech leaders like Elon Musk and David Sachs. The signal is clear: regulators do not want individuals or large tech companies to have excessive currency issuance power in the digital currency realm to avoid trust crises or market misjudgments.
Besides these three core clauses, another point worth discussing is that the original bill draft allowed some foreign stablecoins to circulate in the US, provided their issuing country has a similar regulatory framework to the GENIUS Act. However, the latest revised version hands this discretionary power to US Treasury Secretary Scott Besent, not only strengthening regulatory flexibility but also granting the government more sovereign control space.
Four regulations, four thresholds, each redefining "who can play and how to play". While protecting investors, it also makes clear: the world of stablecoins is no longer a land of "wild growth".
Multiple Perspectives: A Catalyst Paving the Way for DeFi or a Restrictive Constraint on Innovation?
Both supporters and skeptics are voicing their opinions. Odaily has compiled perspectives from several key industry figures, presenting the complex reality behind this regulatory storm from different angles.
Investment Perspective: A New Financial Landscape is Being Reconstructed
Although the 'GENIUS Act' has only taken its first step, the crypto industry consensus is that its final passage is just a matter of time. BITWU.ETH stated: "This bill opens up the imagination for Crypto's next decade."
He believes that once passed, the most worthwhile assets are primarily ETH - the underlying infrastructure for stablecoins and DeFi; secondly, BTC - the representative of hedge assets. What truly has explosive potential is the entire RWA (Real World Assets) track. As he said, "BTC is the largest fish in this pool, ETH is the water pipe. But what's truly worth betting on is the new financial landscape that emerges after the water flows."
Placeholder partner Chris Burniske similarly sees Ethereum's position favorably. He points out that the GENIUS Act might have the most direct positive impact on ETH because Ethereum has a massive stablecoin ecosystem, solid DeFi infrastructure, and a long-established institutional collaboration network. SOL follows closely, while TRX might become an overlooked dark horse due to historical factors.
Macro Perspective: Another Piece of the USD Digitization Puzzle
For policymakers, the 'GENIUS Act' is more than just "regulation" - it might be a crucial part of the US dollar's efforts to dominate the digital world.
Trump's Digital Asset Advisory Council Executive Director Bo Hines stated that the 'GENIUS Act' will consolidate stablecoins' position in the US dollar ecosystem, modernize payment infrastructure, and enhance transaction efficiency and transparency. He believes: "Digital asset technology is the core of next-generation finance, and the US is poised to lead the global financial technology field through this bill."
@CryptoPainter_X suggests that the bill might reflect a government "debt resolution strategy" which, while not the main narrative, still offers long-term benefits for crypto assets.
For foreign stablecoins (like USDT, TUSD), the US market's door is not completely closed, but the entry threshold has significantly increased. @BTCBruce1 points out that the GENIUS Act adds two requirements: first, foreign stablecoins must meet US audit and information disclosure standards, and second, the president has the right to veto their circulation based on national security. This means digital dollars are quietly building a global "gatekeeper mechanism".
Twitter user @0x ulai more directly stated: "The GENIUS amendment is essentially putting a restraint on big tech companies' financial ambitions - preventing Meta, Google, and Microsoft from 'messing around' in the financial realm."
Project Perspective: Is Compliance an Opportunity or a Barrier?
Coinbase CEO Brian Armstrong clearly supports the bill, believing that its clear regulatory framework will promote stablecoin legalization and market growth. As one of the main issuance platforms for USDC, Coinbase will obviously benefit, especially in the context of increasing compliance requirements from institutional clients.
For decentralized stablecoin projects, the situation is not optimistic.Mint Ventures partner Alex Xu pointed out that although the GENIUS Act is widely discussed as a positive for stablecoin concept projects (such as Ethena, Sky, Liquity, Aave, etc.), if the bill is officially passed, most of these projects will find it difficult to meet compliance requirements, and may instead pave the way for traditional financial institutions to enter the competition, making the market more intense.
@cmdefi added: "Most existing projects do not meet the bill's requirements, which seems more like a framework prepared for new institutional entrants. The demand for fully decentralized stablecoins still exists, such as those resistant to censorship and not pegged to the US dollar, but the path to implementation will be more tortuous."
Feng Liu, former editor-in-chief of the blockchain news outlet, from another perspective, pointed out that the bill's ban on interest-bearing stablecoins will force many decentralized projects to rethink their product structure. In his view, this change is more likely to encourage decentralized projects to further strengthen their decentralized characteristics, rather than trying to integrate into the compliance system.
