Significant Breakthrough in US Stablecoin Regulatory Framework

On June 17, the U.S. Senate passed the GENIUS Act, establishing a clear federal regulatory framework for U.S. dollar-backed cryptocurrencies (stablecoins). The bill will be submitted to the House of Representatives and the President for approval, and if passed, will take effect officially.

Main Content of the GENIUS Act

1. Asset backing requirements: Each stablecoin must be fully backed by high-quality, highly liquid assets, such as cash in USD, insured bank deposits, or short-term US Treasury bills. The issuer must hold at least one dollar in compliant reserves for each stablecoin. Issuers with a circulation exceeding 50 billion USD must conduct monthly reserve disclosures and audits.

2. Tiered Regulation: Different regulatory strategies are applied based on the size of the issuer. Large issuers that issue over $10 billion in stablecoins are subject to federal regulation; smaller issuers can opt for state-level regulation.

3. Prohibition of algorithmic stablecoins: Clearly prohibit "algorithmic stablecoins" that rely on programs or internal cryptocurrencies to maintain value.

4. Prohibition of Providing Returns: Payment-type stablecoins must not pay interest, dividends, or any form of returns to holders.

5. Non-securities or commodities: Compliant payment-type stablecoins do not fall under the category of securities or commodities.

6. Bankruptcy Protection: In the event of bankruptcy, the claims of stablecoin holders take precedence over those of other creditors.

Current Status of the Stablecoin Market

Stablecoins have become a key infrastructure in global financial activities. Currently, the total market capitalization of stablecoins exceeds $250 billion, mainly dominated by a few large issuers. Recently, a stablecoin issuer was listed on the New York Stock Exchange, reaching a market value of $37 billion, with a stock price increase of over 400% after the listing, reflecting the market's optimism about the future of stablecoins.

The annual trading volume of stablecoins has exceeded $30 trillion, with the number of active addresses reaching 261 million. In emerging markets, the adoption of stablecoins is accelerating. Latin America and Sub-Saharan Africa are leading globally in retail and professional-level stablecoin transfers, with an annual growth rate exceeding 40%; East Asia and Eastern Europe follow closely, growing by 32% and 29%, respectively.

Impact on the Industry

1. Regulated stablecoin issuers will benefit from regulatory legitimacy, paving the way for institutional funds to compliantly enter the on-chain payment space.

2. Unregulated stablecoin issuers that support or promise returns with illegal coins may exit the U.S. market.

3. The era of offshore stablecoin regulatory arbitrage may come to an end. Major stablecoin issuers that do not register in the United States may face challenges in the future.

4. Fintech companies will gain more development opportunities, but they also face strict compliance requirements.

Future Outlook

1. House Review: Attention should be paid to potential amendments that may affect the future stablecoin landscape.

2. Regulatory guidelines formulation: Institutions such as the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation will further develop specific rules.

3. Responses from States: The specific measures taken by each state under this regulation are worth noting.

The passage of the GENIUS Act marks a shift in U.S. cryptocurrency legislation from mere enforcement to structured policy-making, providing a clearer regulatory environment for the development of the stablecoin market. This will not only promote adoption among retail users but may also attract more capital into the space.