Year of the stablecoin: The GENIUS Act, Wall Street, and the dollar’s digital leap

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If 2024 was the year of the dragon, 2025 has been the year of the stablecoin. U.S. dollar-backed digital assets, in particular, have taken front and center stage, achieving buy-in all the way from the highest office.

The World Liberty stablecoin, USD1, was launched in March by a DeFi platform majority-owned by members of the Trump family. Then Vice President JD Vance set the stage alight at the Bitcoin Conference in May, clarifying the administration’s bullish stance on stablecoins and their ability to act as a “force multiplier” for U.S. economic power.

Stablecoin issuer Circle’s $20 billion IPO followed, igniting what the Bankless podcast duo coined “stablecoin summer.” And last week, the GENIUS Act was signed into law, becoming the first piece of U.S. legislation to directly regulate digital assets, creating a turning point for global finance.

Even Jamie Dimon’s getting in on the action despite his personal skepticism about Bitcoin and digital assets. He may publicly claim not to understand their appeal, but there has long been a gap between what Dimon says and what Dimon does: America’s largest bank has been a pioneer in blockchain technology, developing its own stablecoin, JPM Coin, since 2019.

So, what’s with all the latest developments in moving value worldwide, and what does the GENIUS Act mean for the future of crypto, TradFi, and the global economy? I asked experts from the technical, legal, and financial fields to throw some light on the subject and unpack the types of advancements we may see in the years ahead.

TL;DR: What is the GENIUS Act?

For those of you who’ve been hiding under a rock, let me guide you out of your shadowy abode. The GENIUS Act stands for “Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025,” but “GENIUS” is a lot more catchy. It’s the first comprehensive U.S. federal law that specifically regulates “payment stablecoins” (AKA, digital tokens pegged to fiat money).

The GENIUS Act establishes a long-awaited licensing and oversight regime for stablecoin issuers, mandating full 1:1 reserve backing, imposing strict consumer protection measures, and creating a clear legal footing for integrating stablecoins into mainstream finance.

The law also bars non-financial companies like the Facebooks and Googles of this world from issuing stablecoins without special approval, applying substantial penalties for noncompliance (violations can incur fines of up to $200,000 per day, and criminal penalties including up to five years’ imprisonment).

Why is the GENIUS Act such a big deal? Well, because after years of opacity and uncertainty surrounding stablecoin issuers in the United States, it provides the first federal legal framework, providing clarity on how to run their operations. As international law firm, Winston & Strawn LLP writes in a recent blog:

“The Act pushes stablecoin issuers into a regulatory regime similar to that of banks. For many firms, this means a need to hire compliance officers, invest in risk management systems, and potentially partner with experienced regulated institutions to meet the standards set by Congress.”

Moon Pursuit Capital is a fast-growing crypto investment fund. Its founder, Utkarsh Ahuja, shared his thoughts on just how groundbreaking the GENIUS Act is, commenting:

“The GENIUS Act is a major step forward, not just for crypto, but for U.S. leadership in global finance. For the first time, we have clear rules around stablecoins, which are the backbone of open, programmable money infrastructure. For too long, uncertainty has held the industry back and driven builders offshore. The GENIUS Act changes that. It gives stablecoins legal clarity and sets the stage for broader crypto adoption.”

Genna Garver is a partner at the international law firm Troutman Pepper Locke LLP. She also provided her thoughts on the GENIUS Act to share with CryptoSlate readers. She said:

“This is a watershed moment for institutional financial services. The GENIUS Act authorizes the tokenization of fiat currency and regulation of the same, thereby legitimizing digital US dollarization.”

A perfect storm for digital assets with tailwinds on overdrive

Guillaume Poncin is CTO at Alchemy, a developer platform that facilitates over $100 billion in transactions annually for businesses across the ecosystem, from Fortune 500 firms like Robinhood, Visa, JPMorgan, and PayPal, to crypto-native companies like Coinbase and Circle. He told me via written commentary:

“The GENIUS Act provides the clarity that institutions have been waiting for, and it helps legitimize programmable money that operates at internet speed. This legislation is important because it reduces regulatory uncertainty that has held back institutional adoption.”

What’s more, the GENIUS Act does not exist in a vacuum. With a groundswell of favorable momentum toward digital assets from the current administration, the tailwinds are blowing like crazy. The unwinding of the stranglehold on crypto during the Biden years, and the repeal of key pieces of prohibitive legislation such as SAB 121, which prevented U.S. banks from providing custody of digital assets, are creating a perfect storm. Poncin enthused:

“We saw immediate interest from major banks that had previously been cautious. Now, with GENIUS in place, we believe every major bank will move toward issuing or supporting stablecoins in some form. It unlocks the next era of programmable money that is trusted, regulated, and built for internet-scale speed.”

The GENIUS Act also serves to extend U.S. dollar dominance, spurring innovation based on the USD and reinforcing the dollar’s standing as the world’s reserve currency for decades to come. As crypto-native investment firm, CoinFund, president Chris Perkins commented:

“The GENIUS Act will go down in history as a law that served as a foundational step in the mainstreaming of crypto as an asset class. By catalyzing innovation on our greatest export, the greenback, GENIUS will position the dollar as the global reserve currency for decades to come, enhance national security, and unlock financial opportunity across the globe

Stablecoins deliver obvious utility by offering inexpensive, 24/7 payments. But, by enabling seamless and efficient access to U.S. dollars across the developing world, stablecoins will also serve as a store of value when local monetary policy goes awry.”

A flood of stablecoin killer apps

Stablecoins have come a long way from their original use case as a means to store wealth, while avoiding the volatility of digital assets like Bitcoin and Ethereum, to be enshrined in a landmark bill recognizing them as key financial infrastructure. So what are some of the main use cases the GENIUS Act enables, and what can we expect from the coming years? Ahuja comments:

“The GENIUS Act unlocks real innovation, instant remittances, AI-native payments, and global commerce without intermediaries.”

Poncin adds:

“The opportunity in stablecoins isn’t in holding them, unless they’re being used in DeFi for yield opportunities. The real opportunity lies in companies issuing their own stablecoins, such as payment processors integrating stablecoins and fintechs launching their own tokens.

We’re seeing fintechs generate meaningful revenue from stablecoin reserves through treasury management. This can potentially be $100M+ annually on $2-3B in deposits. The real value creation comes from how stablecoins are enabling the new financial system.”

Beyond experimenting with its own stablecoins, JPMorgan made headlines this week for its moves to allow clients, particularly institutional ones, to use bitcoin as collateral for loans. Thanks to the GENIUS Act, the bank is developing a new program that would allow clients to pledge their Bitcoin or Ether holdings to secure cash loans, much as they might with stocks or real estate.

While JPMorgan already enabled clients to borrow against crypto ETFs, the move to accept direct crypto holdings as collateral is a paradigm shift for an institution helmed by one of the industry’s most vocal critics.

The GENIUS Act’s significance extends across the industry, with DeFi platforms and tokenized RWAs taking note as well. Orest Gavryliak, the chief legal officer at DEX aggregation pioneer, 1inch Labs, told me:

“Tokenized technology has become a major area of focus for TradFi giants like BlackRock, JPMorgan, and more, as it represents marked improvement on the current setup of financial standards. It is also a major benefit in terms of the accessibility of liquidity. By transcending geographic barriers, the global nature of tokenization, enabled by blockchain technology, allows markets with limited, isolated liquidity to unify and access liquidity from multiple sources—available 24/7, in real time.”

Poncin expands:

“Banks will enable customers ‘investor-grade opportunities, like trading in private equities, and get loans against their holdings. Small businesses can finally harness the remote work era to pay overseas workers affordably. We’re about to see a flood of not one, but hundreds of stablecoin ‘killer apps’, all enabling people to exchange and create value in ways unimaginable just months ago.

Tokenized treasuries are growing significantly. Stablecoin issuers, such as Tether, hold substantial U.S. debt positions. We’re seeing increased interest in tokenizing traditionally illiquid assets like private credit and real estate to unlock liquidity. There’s also growing development of infrastructure to make RWAs composable with DeFi protocols.

The real innovation is about making these assets programmable. This enables new financial products like automated lending against tokenized assets or smart contracts that can interact with real-world collateral.”

Does the GENIUS Act mean DeFi summer on steroids?

One interesting clause in the GENIUS Act is the prohibition on paying interest or yield to stablecoin holders, which could mean an explosion of demand in DeFi yield-earning opportunities. Perkins says:

“Under GENIUS, stablecoins do not pay interest to end users, and without interest, stablecoins are depreciating assets. So, holders will seek yield. And that’s where DeFi comes in. If the Treasury Department’s projections are correct and trillions of stablecoins come into the system, expect DeFi summer on steroids as users seek to maximize yield by engaging across a variety of yield strategies. Users will be drawn to yield-bearing vaults, and they will commission AI agents to optimize their returns.

With the U.S. back in the lead, countries around the world will need to accelerate and optimize stablecoin policies of their own. The $7.5 trillion per day FX market stands to benefit. Watch this space.”

Will Beeson, founder of MultiLiquid, and former co-lead of Standard Chartered’s Tokenization platform, comments:

“The outright ban on stablecoin yield marks a critical inflection point. Capital is already shifting. Ethereum is outperforming Bitcoin as traders seek returns via Ethereum-native protocols and tokenized funds.

The stablecoin market is entering a phase where only institutions that can put capital to work efficiently will survive. But there’s a bottleneck: stablecoins move 24/7, Treasurys don’t. Liquidity infrastructure that bridges this gap is now mission-critical.”

Gavryliak adds:

“Regulatory clarity, like the GENIUS Act, means companies and institutions can now look to leverage stablecoins for fast, cost-efficient cross-border payments, treasury optimization, and real-time settlement, bypassing TradFi banking rails and unlocking operational efficiencies. It’s a positive step forward for DeFi.

It also provides security for institutions and other TradFi operators, who can now put their full weight behind the sector. Those previously just dipping their toes in can now dive headfirst with the clear guardrails.”

Could politics halt the revolution?

With digital assets an increasingly partisan issue, and key Democrats like Elizabeth Warren holding onto her anti-crypto army, is there any risk of the GENIUS Act, or any other legislation, being reversed if and when the blue team returns to power? And with the Trump family so overtly benefiting from digital assets, does this clear conflict of interest pose any threat? Poncin believes it’s too late for that:

“The momentum in crypto adoption transcends political divisions. We work with institutions across the spectrum that recognize blockchain’s potential. The repeal of SAB 121 had bipartisan elements, and there are crypto advocates across party lines. Major banks, asset managers, and payment companies are building on blockchain because it offers superior technology for settlement and programmable money.

Moreover, the cryptocurrency industry has demonstrated resilience in the face of various challenges over the years. What matters is that institutions are building real utility on blockchain. These use cases exist because they solve real-world problems, such as settlement speed, operational costs, and 24/7 availability. That’s what drives lasting adoption.”

Garver is also positive that GENIUS brings in lasting change. She says:

“During the legislative process, there were numerous attempts to debate and offer amendments to the bill to address certain conflicts of interest, but those amendments were not adopted as part of the final GENIUS Act. Now that we have final legislation authorizing permitted payment stablecoins, digital asset adoption likely will depend more on the use cases.

Not unlike ATM adoption of the last generation, at some point, it’s just too convenient and beneficial not to get on board. I don’t see potential users sitting on the sidelines as a sign of protest. I think the ship will quickly sail, and crypto will become too integrated into the fiber of our economy, the global economy, and the financial services industry.”

With the ballooning global debt, liquidity expansion, geopolitical uncertainty, and lowering interest rates, favorable regulation for digital assets in the U.S. could mean that “nothing stops this train.” As Ahuja affirms:

This is, frankly, as constructive a macro setup as you can ask for, short of resolving event-driven risks like tariffs or Middle East escalation. But from a pure market-structure and liquidity standpoint, the conditions are primed.

We’re entering a rare window where fundamentals, liquidity, and macro dynamics are all pointing in the same direction; and that’s precisely when the most compelling upside gets unlocked.”

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