The GENIUS Act has been signed into law, establishing the first comprehensive U.S. regulatory framework for dollar-backed stablecoins. The legislation mandates strict reserve requirements, federal licensing, and independent audits for domestic issuers while prohibiting yield-bearing products for individual holders. Supporters claim it will bolster dollar dominance and drive mainstream adoption, with Treasury Secretary Scott Bessent projecting stablecoin market growth from $267 billion to $2 trillion.
However, the Act faces criticism over vague "comparable standards" for foreign issuers like Tether (USDT), dubbed the "Tether loophole" by the Atlantic Council. Tether CEO Paolo Ardoino confirmed USDT will comply and plans a U.S.-specific stablecoin. Meanwhile, experts warn the yield ban may disadvantage U.S. issuers and drive demand toward Ethereum-based DeFi for passive income.
The law enables traditional players like Bank of America, Walmart, and Amazon to enter the stablecoin market. MIT's Christian Catalini noted this poses significant challenges for USDC but less so for offshore-dominated USDT. Sygnum Bank's Fabian Dori emphasized the Act's long-term impact on institutional adoption while highlighting regulatory divergence between innovation-focused U.S. and risk-averse Europe.