The GENIUS Act (Generating Innovative New Ideas for the United States Act), recently passed by the U.S. Senate with bipartisan support, aims to establish comprehensive regulations for stablecoins. Key provisions mandate full collateralization by high-quality liquid assets like U.S. Treasuries, impose capital requirements similar to traditional banks, and enforce strict AML/KYC compliance under regulatory oversight. Senators Cory Booker and Adam Schiff championed the legislation, which now moves to the House of Representatives.
Europe's largest asset manager, Amundi, issued an urgent warning through Chief Investment Officer Vincent Mortier, arguing the Act could inadvertently undermine dollar dominance by signaling reduced confidence in traditional currency systems. Mortier cautioned that creating "quasi-bank" stablecoin entities might fragment global payments, accelerate alternative CBDC development, and destabilize financial stability through currency volatility and reduced Treasury demand.
Conversely, proponents highlight potential benefits including increased institutional adoption of stablecoins like USDC and USDT, bolstered demand for U.S. Treasuries, and strengthened digital dollar leadership. Mike Cahill, CEO of Douro Labs, emphasized: "If the U.S. gets this right, it won’t just lead the crypto market — it will write the rulebook for the next global financial system." The Act may set global regulatory precedents while integrating stablecoins into mainstream finance.