The "GENIUS Act" Opens a New Era for Stablecoins, Fully Promoting the Development of Digital Assets

2025 may become the "Year of Stablecoins." Dollar-backed digital assets have become the focus, even receiving recognition from the highest levels. In March of this year, a DeFi platform launched the world's free stablecoin USD1. In May, the Vice President clarified the government's positive stance on stablecoins at a Bitcoin conference, stating that they could become "a force multiplier for the strength of the U.S. economy."

Subsequently, a stablecoin issuer completed a $20 billion IPO, triggering the "Summer of Stablecoins." Last week, the "GENIUS Act" was officially signed into law, becoming the first legislation in the United States to directly regulate digital assets, marking a turning point for global finance.

Even a bank CEO who personally harbors doubts about cryptocurrencies has joined this initiative. Although he has publicly stated that he does not understand the appeal of cryptocurrencies, there is already a gap between his words and actions: this largest bank in the United States has long been a pioneer in blockchain technology, having been developing its own stablecoin since 2019.

The full name of the "GENIUS Act" is "2025 U.S. Stablecoin Innovation and Establishment Act," which is the first federal law in the United States to comprehensively regulate "payment stablecoins." The act establishes a licensing and regulatory framework for stablecoin issuers, requiring that stablecoins be fully backed by reserves on a 1:1 basis, implements strict consumer protection measures, and lays a clear legal foundation for the integration of stablecoins into the mainstream financial system.

The bill also prohibits non-financial companies from issuing stablecoins without special approval, imposing severe penalties for violations. For many companies, this means the need to hire compliance officers, invest in risk management systems, and possibly collaborate with experienced regulatory agencies to meet the standards set by Congress.

The founder of a certain crypto investment fund believes that the GENIUS Act is not only a significant advancement in the cryptocurrency space but also an important step for the United States in asserting its leadership in the global financial arena. For a long time, regulatory uncertainty has hindered industry development and forced developers to move overseas. This act changes that situation by providing legal clarity for stablecoins and laying the groundwork for broader applications of cryptocurrency.

A partner at an international law firm stated that this is a watershed moment for institutional financial services. The "GENIUS Act" authorizes the tokenization of fiat currency and related regulation, thereby legitimizing digital dollarization.

The Chief Technology Officer of a certain developer platform believes that the "GENIUS Act" brings much-anticipated clarity for institutions, facilitating the legalization of programmable currencies at internet speed. This legislation reduces regulatory uncertainty that hinders institutional adoption. He expects that all major banks will issue or support stablecoins in some form, marking the beginning of a new era for programmable currencies.

The bill will also strengthen the dominance of the US dollar, promote dollar-based innovations, and solidify the dollar's status as the global reserve currency for decades to come. Stablecoins have clear practicality by providing low-cost, 24/7 payment services. In addition, by providing seamless and efficient access to US dollars for developing countries, stablecoins can also serve as a store of value when local monetary policies fail.

The "GENIUS Act" will unlock true innovation, including instant remittances, AI-native payments, and intermediary-free global trade. The real value creation of stablecoins lies in how they empower a new financial system. In addition to attempting to issue its own stablecoin, a major bank made headlines this week for allowing customers to use Bitcoin as collateral for loans.

Tokenization technology has become a core focus for traditional financial giants as it significantly optimizes the current financial standard system while greatly enhancing the accessibility of liquidity. With the help of blockchain technology, tokenization breaks geographical restrictions, allowing limited and fragmented markets to be integrated and providing real-time access to multi-source liquidity around the clock globally.

The "GENIUS Act" prohibits the payment of interest or yields to stablecoin holders, which may trigger a surge in demand for DeFi yield opportunities. If the Treasury's predictions are correct, trillions of dollars in stablecoins will enter the market, and as users maximize returns through various yield strategies, we will welcome a "super DeFi summer."

The momentum for cryptocurrency adoption transcends political divides. The repeal of SAB 121 has bipartisan support, with cryptocurrency advocates in both parties. Large banks, asset management companies, and payment firms are actively laying out their blockchain strategies, as it offers superior technology for settlement and programmable currency.

In the face of global debt expansion, liquidity expansion, geopolitical uncertainty, and declining interest rates, the United States' friendly regulation of digital assets may signify that "this train is unstoppable." We are entering a rare window period where fundamentals, liquidity, and macro dynamics are all improving, and this is the moment to unlock the maximum upside potential.