Bank of America (BofA) projects the stablecoin market could expand by $25 billion to $75 billion in the near term following the enactment of the GENIUS Act, which President Donald Trump signed into law last Friday. This legislation establishes the first comprehensive U.S. regulatory framework for stablecoins, resolving longstanding legal ambiguities that previously deterred traditional financial institutions from entering the market.
According to BofA's report, major banks are actively preparing to launch consortium-led stablecoins, with CEO Brian Moynihan confirming the bank's own development plans. The current stablecoin market capitalization of $270 billion could see rapid growth through bank-issued tokens backed 1:1 by U.S. dollars and held to stringent compliance standards.
The GENIUS Act mandates clear reserve requirements and redemption mechanisms, enabling banks to leverage existing infrastructure while ensuring consumer protection. This regulatory clarity is expected to accelerate institutional adoption, though challenges remain in technological integration and competition with established players like Tether (USDT) and Circle (USDC).
Notably, the surge in bank stablecoins may significantly increase demand for short-term U.S. Treasury bills, as issuers will likely allocate reserves to these liquid assets. BofA analysts anticipate this could influence Treasury yields and auction dynamics while further bridging traditional finance and digital asset ecosystems.
Looking ahead, the CLARITY Act—currently under Senate consideration—may drive additional consolidation and tokenized asset adoption over the next 2-3 years. Cross-border payments are identified as an immediate use case, though domestic payment systems face limited near-term disruption.