For people in the Web3 industry, stablecoins seem to be a familiar term, with buying stablecoins being a standard action since the first day of trading crypto.
So why has Circle, the first stock of stablecoins, created an amazing three-fold increase in just two weeks of being listed?
The most important catalyst stems from the US Senate's passage of the GENIUS Stablecoin Act on June 17th. We will now analyze the main content of this act and why it was able to pass the Senate and is likely to be formally implemented.
The main regulatory points of the stablecoin act are as follows:
1. Dual Regulatory System: The GENIUS Act establishes a federal and state "dual-track" regulatory framework, setting clear operating rules for the stablecoin market. Stablecoin issuers need to choose federal or state-level regulatory paths based on their scale. Large-scale issuers (with an issuance volume over $10 billion) must be included in federal regulation to ensure compliance and transparency.
2. 1:1 Reserve Requirements: The act requires all stablecoins to maintain a 1:1 reserve ratio, limited to highly liquid and safe assets. The legally permitted reserve assets include: US dollar cash, insured bank demand deposits, US Treasury bills maturing within 93 days, repurchase/reverse repurchase agreements, government money market funds investing only in the above safe assets, and tokenized forms of the above assets that comply with the law. Issuers are prohibited from using high-risk assets like cryptocurrencies as reserves.
3. Information Disclosure and Audit Mechanism: To enhance market transparency, stablecoin issuers must disclose reserve status monthly and undergo independent audits. This aims to enhance public trust in the stablecoin system and prevent bank run risks.
4. License and Compliance Requirements: Issuers must apply for a license from regulatory authorities and comply with banking regulatory requirements. There is an 18-month transition period during which existing market stablecoins must complete compliance adjustments.
5. Anti-Money Laundering and Sanctions Compliance: Stablecoin issuers must comply with the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations, establishing customer identification (KYC) and monitoring systems to prevent illegal fund flows.
6. Consumer Protection: The act stipulates that in the event of a stablecoin issuer's bankruptcy, token holders have priority repayment rights, ensuring their reserve assets are not misappropriated.
The second point reveals information that is most likely the primary reason the stablecoin act gained attention during Trump's term: debt reduction.
The blueprint of "strengthening US dollar hegemony" in Senator Bill Hagerty's words is being quickly realized by capital: Standard Chartered Bank estimates that if the act passes, the global stablecoin market value could surge to $2 trillion by 2028, which is equivalent to creating a massive buyer specifically consuming short-term US Treasury bonds. More shockingly, Tether and Circle, the two major issuers, already hold $166 billion in US Treasury bonds. Wall Street analysts predict that in the coming years, stablecoin issuers will surpass hedge funds to become the third-largest US Treasury bond player after the Federal Reserve and foreign central banks. Treasury Secretary Scott Bessent calculated that if the stablecoin market reaches trillions of dollars by the end of this decade, private sector demand for US Treasury bonds could reduce government borrowing costs by several basis points - essentially using hot money from the crypto world to discount the US Treasury's financing costs. More subtly, this demand is essentially "attracting gold" for US Treasury bonds globally, with the US dollar's status as a reserve currency being further consolidated through the stablecoin channel. No wonder Trump commented on this act, "Send it to my desk as soon as possible, the faster the better".
Although the final passage of the act still requires review and voting by the House of Representatives before being submitted to the President, based on market expectations, the ultimate implementation of the stablecoin act seems to be a done deal.
What impact will the stablecoin act have on investments?
[The translation continues in the same professional and accurate manner for the rest of the text.]Besides Circle, What Other Opportunities Exist for Stablecoins in the Secondary Market?
Circle's market value increase directly benefits Coinbase; before the unequal treaty is canceled, Coin can receive profits at a 50% channel fee rate;
Other newly listed stablecoins may also be hyped like Coinbase, and some brokerages, payment providers, and card organizations will depend on their progress in accessing the stablecoin network:
In the crypto market, the growth of stablecoin scale means a significant increase in on-chain DeFi asset supply, which is beneficial to DeFi lending protocols like Aave and Morpho. Of course, it also means that yield layers such as Ondo and Maple Finance, especially enterprises that tokenize U.S. Treasury bonds, have the most direct advantage.
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