What Does The GENIUS Act Mean For Non-US Stablecoin Issuers & The Broader Crypto Industry?
In Brief
The GENIUS Act, signed into law by President Trump, establishes a clear regulatory framework for stablecoins in the US, enhancing consumer protections, promoting wider adoption, and setting high compliance standards that will impact both domestic and foreign issuers.
The cryptocurrency market has a spring in its step once again after U.S. President Donald Trump signed into law a key regulatory regime for so-called stablecoins.
The Guiding and Establishing National Innovation for U.S. Stablecoins or GENIUS ACT was signed into law on July 18, 2025, paving the way for digital assets to become an everyday standard for making payments and moving money. It received overwhelming support, passing in the House of Representatives by a vote of 308 to 122, with almost half of the sitting Democrats giving it the thumbs up.
Crypto supporters have hailed the law as a massive win for an industry that has struggled for years to gain some kind oflegitimacy.
What Are Stablecoins?
Unlike traditional cryptocurrencies such as Bitcoin, Ether, and Solana, which are extremely volatile, stablecoins are pegged 1:1 to a fiat currency or commodity (usually the U.S. dollar, but also currencies such as the euro, the U.K. pound, and even gold). They have emerged as a key part of the digital asset industry, greasing the wheels of the crypto economy by enabling real-time payments, trading off-ramps, and on-chain financial services.
Stablecoins have grown to become a $250 billion industry, and with the passing of the GENIUS Act adding to recent momentum, there’s reason to believe that they might soon become much bigger, said Andrei Grachev, managing partner of Falcon Finance, a decentralized finance protocol that provides tools for creating synthetic dollar assets and managing stablecoin markets.
“The surge in Circle’s USDC, whose capitalization has grown around 40% this year, is a clear indicator of pent-up demand for reliable digital dollar infrastructure,” Grachev pointed out.
Despite the enormous appetite for stablecoins in the crypto industry, they have remained largely unregulated, with no legal clarity on who can issue them, who can acquire them, or how they should be collateralized. This is what theGENIUS Act is trying to change, and it will have major implications, both for U.S. stablecoin issuers, and also foreign entities.
What Is The GENIUS Act?
In a nutshell, the GENIUS Act spells out who is allowed to issue U.S. dollar-backed stablecoins, how they must be backed, and what kinds of disclosures must be made. Two of the major problems associated with stablecoins include the systemic risk that comes with unregulated issuers, and the complete absence of redemption guarantees and, therefore, consumer protections.
By providing a clear framework with enforceable rules for issuing, backing, and regulating stablecoins in U.S. markets, the GENIUS Act attempts to define who can actually issue a stablecoin token, under what circumstances, and how their reserves must be managed. In doing this, the Act will help to safeguard the U.S. financial system and provide strong protections for consumers and investors, while promoting the adoption of digital finance.
As such, many analysts believe the GENIUS Act has the potential to fundamentally reshape the crypto industry in the U.S. and beyond. One of the most enthusiastic is Grachev, who points out that the Act makes an important distinction for stablecoins, requiring them to operate more like public infrastructure than private products. Issuers will be heavily regulated and audited, and will face strict limitations on risk and leverage.
“It brings much-needed clarity into a space that has often moved faster than oversight,” Grachev said. “This is not an attempt to slow innovation. On the contrary, it’s about making sure that digital dollars are built on foundations that can last.”
The Act means that Circle and Tether, the U.S.-based issuers of the two biggest stablecoins – USDC and USDT – are required to navigate a federal framework and ensure they meet all of the conditions required to obtain a stablecoin issuer license, or otherwise risk being outlawed. They’ll be subject to greater oversight and tighter reporting standards, forcing them to become much more transparent. While some may see this as the U.S. government placing them under tighter wraps, Grachev believes they will welcome the legislation as a tool that can help them scale responsibly.
“With the right structures in place, digital dollars can support more accessible, efficient finance without relying on oversized problems or concentrated control,” Grachev stated. “This is the shift the legislation is pointing towards, and it’s the right one.”
Big Impacts For Non-U.S. Stablecoin Issuers
While U.S. issuers ought to welcome the GENIUS Act for the clarity it brings to the stablecoin market, it will likely cause some major headaches for foreign U.S. stablecoin issuers, and in some cases, perhaps even an insurmountable barrier. While the path laid out for U.S. issuers is fairly straightforward, foreign entities face additional restrictions, particularly the requirement that the U.S. Treasury confirm that the issuer in question is subject to a comparable regulatory regime in their own country.
Additionally, foreign stablecoin issuers will be required to register with the U.S. Office of the Comptroller of the Currency, and hold reserves in a U.S. financial institution that are sufficient to cover the liquidity requirements of U.S. token holders. Of course, the issuer cannot be based in a foreign jurisdiction that’s subject to U.S. economic sanctions.
Grachev said there’s hope for foreign stablecoin issuers because many nations have already made moves similar to those of the U.S. “The European Union’s MiCA rules, as well as licensing efforts in Hong Kong and Singapore, are all converging on a common idea,” he said. “If you want to issue a currency-like asset, you need to meet high standards oftransparency, governance, and control.”
However, it remains to be seen whether the U.S. Treasury will recognize any of these regulations as being “comparable” to the GENIUS Act. While Europe’s Markets in Crypto-Assets regulation provides a unified licensing framework for stablecoin issuers in the EU, it has a much broader focus, covering a wider range of crypto assets, with more rigid requirements around authorization, governance, and collateral.
Elsewhere, little concrete progress has been made. The U.K. Treasury is busy holding consultations regarding bringing stablecoin issuers within its existing Financial Services and Markets Act 2000, but it has not yet introduced a comprehensive framework for fiat-backed assets. While its proposed rules may one day meet the standards set out by the GENIUS Act, the limited existing regulations in place for stablecoins (such as current anti-money laundering rules) are unlikely to suffice. It’s a similar story in other supposedly forward-thinking territories, such as Hong Kong and Singapore.
That said, Grachev thinks that foreign issuers might be able to comply by operating through a U.S.-based entity, which would naturally be subject to the requirements of the GENIUS Act.
“The GENIUS Act could fundamentally reshape the landscape for non-U.S. stablecoin issuers by setting a high bar for regulatory compliance that emphasizes USD dominance,” Grachev explained. “There’s nothing to stop foreign fintechs from creating their own stablecoins, but if they want to have them integrated into U.S. crypto infrastructure, they’ll need to play by U.S. rules.”
A Deciding Factor For Crypto Adoption
In any case, the prospect of a tightly regulated U.S. stablecoin industry bodes well for the sector, Grachev said, offering traditional banks, fintech startups, and other organizations a clear legal avenue through which they can introduce their own dollar-backed stablecoin assets, potentially transforming the digital asset space.
For instance, many U.S. and foreign banks and asset managers are already exploring how stablecoins can be used in areas such as treasury management. “We expect to see financial firms shift from observers to active participants, fostering more institutional-grade products while mitigating risks like custody and privacy concerns,” Grachev said.
The legislation could also pave the way for stablecoins to become a preferred payment mechanism in many industries. Big tech companies like Amazon, Apple, and Google have kept pretty quiet about stablecoins so far, but they operate massive e-commerce and payments ecosystems that could potentially benefit from integrating digital dollars. Cross-border payments and remittances are also ripe for transformation, as stablecoins provide obvious benefits with faster, lower-cost transactions than traditional financial rails such as Western Union and SWIFT.
It’s for these reasons that the GENIUS Act is seen as a pivotal development, not only in terms of stabilizing stablecoins, but also in the broader sense of how people view crypto assets. After all, with more regulation comes greater trust, which is essential for wider adoption beyond the niche audience stablecoins and crypto have attracted so far.
“Trust in how these assets are issued and managed is a deciding factor,” Grachev argued. “Rules like those in the GENIUS Act do not just protect consumers. They support adoption by giving market participants a clearer sense of who they are transacting with and under what terms.”
Disclaimer
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
