- The U.S. Treasury seeks input for the GENIUS Act, focusing on stablecoin regulation.
- Key players include the U.S. Treasury and several federal agencies, with input from Gemini and Coinbase.
- Immediate effects include increased institutional participation.
The U.S. Treasury has opened a second public comment round on GENIUS Act’s implementation for stablecoin regulation, involving key federal agencies and industry executives as stakeholders.
This move aims to regulate stablecoins comprehensively, impacting market dynamics and ensuring collaboration between federal authorities and financial institutions.
Key players include the U.S. Treasury, and several federal agencies. The GENIUS Act, signed by President Donald Trump in 2025, seeks input from major crypto industry stakeholders like Gemini and Coinbase.
Increased Institutional Participation
Immediate effects include increased institutional participation as credit union service organizations can seek stablecoin issuance licenses. Market dynamics could shift with the evolving regulatory landscape.
Impact on USD-Pegged Stablecoins
The regulatory framework will influence USD-pegged stablecoins like USDC and USDT. It poses potential challenges for traditional banks in terms of capital flow and business operations.
“While the framework established in the GENIUS Act seeks to create that regulatory perimeter and spur innovation, stablecoins continue to risk disintermediating core bank activity like deposit taking and lending, which could undermine the fundamental role banks play in making loans to consumers and businesses.” – Rob Nichols, President and CEO, American Bankers Association.
Historical Parallels and Market Shifts
Through historical parallels, increased regulatory clarity often leads to significant market shifts. Past regulatory consultations, like the EU’s MiCA, serve as precedents highlighting potential outcomes.
DeFi Protocol Changes
Historical trends suggest changes in DeFi protocols, possibly affecting TVL and liquidity. The evolving rules will shape financial, regulatory, and technological outcomes impacting the stablecoin ecosystem and broader crypto markets.
