New Era of Stablecoin Regulation: The "GENIUS Act" Leads the Digital Asset Revolution

2025 is regarded as the "Year of Stablecoins", with USD-backed digital assets becoming the focus, even gaining recognition at the highest levels. In March of this year, a DeFi platform launched the world’s first free stablecoin USD1. In May, at the Bitcoin conference, senior officials clarified the government's positive stance on stablecoins, believing 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 so-called "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 executive who personally holds a skeptical view of 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 words and actions: this largest bank in the United States has long been a pioneer in blockchain technology and has 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 comprehensive federal law in the United States regulating "payment stablecoins." The act establishes a long-awaited licensing and regulatory framework for stablecoin issuers, requiring that stablecoins be backed by a 1:1 full reserve, implementing strict consumer protection measures, and laying a clear legal foundation for the integration of stablecoins into the mainstream financial system.

The law also prohibits non-financial enterprises from issuing stablecoins without special approval, imposing severe penalties for violations. Violators can face daily fines of up to $200,000, with criminal penalties including up to 5 years in prison.

The founder of a cryptocurrency investment fund stated: "The GENIUS Act is not only a significant advancement in the cryptocurrency space but also an important step for the United States in global financial leadership. For the first time, we have established clear rules for stablecoins, which are at the core of open, programmable currency infrastructure. For a long time, regulatory uncertainty has hindered industry development, forcing developers to move overseas. This act changes that situation; it provides legal clarity for stablecoins and lays the foundation for broader applications of cryptocurrency."

The chief technology officer of a developer platform believes: "The GENIUS Act brings much-anticipated clarity for institutions, facilitating the legalization of programmable currency at internet speed. The significance of this legislation lies in its reduction of regulatory uncertainty that hinders institutional adoption."

The bill will also strengthen the dominance of the US dollar, promote dollar-based innovation, and consolidate the dollar's position as the global reserve currency for decades to come. The president of a crypto-native investment firm commented: "The GENIUS Act will go down in history as the foundational law that propels cryptocurrency into the mainstream asset class. By catalyzing innovation in the dollar, this bill will ensure that the dollar maintains its status as the global reserve currency for decades to come, enhancing national security and unlocking financial opportunities globally."

The use of stablecoins has far exceeded the original "wealth storage tool to avoid the volatility of digital assets" and is now recognized as a key financial infrastructure. The "GENIUS Act" will give rise to various major application scenarios, including instant remittances, AI-native payments, and intermediary-free global trade.

A large bank made headlines this week for allowing customers to use Bitcoin as collateral for loans. Thanks to the GEN Act, the bank is developing a new program that allows customers to pledge Bitcoin or Ethereum to obtain cash loans, similar to the model of using stocks or real estate as collateral.

The impact of the "GENIUS Act" extends across the entire industry, with DeFi platforms and tokenized RWA also receiving significant attention. The Chief Legal Officer of a certain DEX aggregation platform stated: "Tokenization technology has become a core focus for traditional financial giants, as it significantly optimizes the current financial standard system while greatly enhancing liquidity accessibility. With the help of blockchain technology, tokenization breaks geographical limitations, allowing the integration of limited and fragmented markets to access global 24/7 uninterrupted multi-source liquidity in real time."

One interesting provision in the "GENIUS Act" is the prohibition on paying interest or yields to stablecoin holders, which may trigger a surge in demand for DeFi yield opportunities. The president of a crypto-native investment firm stated: "According to the 'GENIUS Act', stablecoins do not pay interest to end users, making stablecoins depreciating assets. Holders will seek yields, and this is precisely where DeFi comes into play. 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 usher in a 'super DeFi summer.'"

Despite the political risks, industry insiders generally believe that the momentum for cryptocurrency adoption has surpassed political divisions. Large banks, asset management companies, and payment firms are all laying out their strategies in blockchain because it provides superior technology for settlement and programmable money. The key is that institutions are building real utility on the blockchain, and these application scenarios address real issues such as settlement speed, operational costs, and 24/7 availability, which is the driving force behind sustained adoption.

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