Original | Odaily Planet Daily (@OdailyChina)
Recently, the stablecoin legislation "GENIUS Act" passed the Senate debate motion with a vote of 69 in favor and 31 against, officially entering the revision stage. Perhaps buoyed by this positive news, Bitcoin has strongly broken through $110,000 after four months, setting a new historical high.
Currently, the global stablecoin market has surpassed $200 billion, gradually becoming a core pillar connecting traditional finance and the blockchain world. However, behind this prosperity lie significant issues that cannot be ignored—transparency of reserves, systemic risks, and the long-standing absence of a regulatory framework.
Against this backdrop, the U.S. Senate Committee on Banking, Housing, and Urban Affairs proposed the "GENIUS Act," aiming to establish a systematic tone for this rapidly developing field. The bill requires stablecoin issuers to hold 1:1 high-quality reserve assets (such as U.S. Treasury bonds or cash) and prohibits interest-bearing stablecoins to reduce potential financial risks. Previously, Odaily Planet Daily detailed the specifics of the bill in the article "GENIUS Act Expected to Pass the Senate, Stablecoin Regulation Welcomes Historic Breakthrough," which interested readers can refer to.
Now that the "GENIUS Act" has entered the revision stage, the sentiment in the crypto industry has also heated up. This bill, seen as a milestone in U.S. stablecoin regulation, has sparked considerable discussion within the industry.
Review of Hotly Debated Provisions
As a bill that has sparked widespread discussion, it reflects the regulatory body's dual focus on the growing importance and potential risks of the stablecoin market.
On the surface, it merely sets rules for stablecoins; but on a deeper level, it attempts to clarify the following questions: As stablecoins gradually take on important roles in the digitization of the dollar and cross-border payments, who should be granted the right to issue them? What kind of stability mechanism can be trusted? And how can systemic risks be prevented from transmitting on-chain?
To understand the true intent of this bill, we may need to start with a few of the most discussed provisions:
A clear prohibition on "interest-bearing" stablecoins. In simple terms, no issuer can pay interest or other forms of returns on stablecoins held by users. This provision, while seemingly straightforward, directly raises alarms for many DeFi projects that rely on yield mechanisms. The bill's intent is to sever the ambiguous link between stablecoins and traditional high-risk yield products to prevent the emergence of potential financial bubbles, but it directly targets decentralized stablecoins, posing a significant survival challenge for innovative stablecoins like Ethena.
Strict limitations on reserve requirements. The bill mandates that all stablecoins must maintain a 1:1 reserve ratio, and these reserves must consist of high-quality, highly liquid assets, such as U.S. Treasury bonds, cash, or federally insured deposits. This effectively provides "insurance" for stablecoins, which also means that projects relying on algorithmic adjustments or staking mechanisms for stability may face difficult choices in the future.
Restrictions on issuer qualifications. The GENIUS Act explicitly excludes certain "special individuals" from participating in stablecoin issuance, such as influential tech leaders like Elon Musk and David Sacks. The message conveyed here is clear: regulators do not want to see individuals or large tech companies wield excessive power in the digital currency space to avoid trust crises or market misjudgments.
In addition to the three core provisions mentioned above, another point worth discussing is that the original draft of the bill allowed certain foreign stablecoins to circulate in the U.S. as long as their issuing countries had regulatory frameworks similar to the GENIUS Act. However, the latest revision has placed this discretion in the hands of U.S. Treasury Secretary Scott Bansen. This not only strengthens regulatory flexibility but also grants the government greater sovereign control.
Four provisions, four thresholds, each redefining "who can play and how to play." While protecting investors, it also makes it clear: the world of stablecoins is no longer a land of "barbaric growth."
Multiple Perspectives: A Booster for DeFi or a Tightening Noose on Innovation?
Both supporters and skeptics are voicing their opinions. Odaily Planet Daily has compiled the views of several key industry figures to present the complex reality behind this regulatory storm from different angles.
Investment Perspective: A New Financial Landscape is Being Restructured
Although the "GENIUS Act" has only taken its first step, there is a consensus in the crypto industry that its eventual passage is just a matter of time. BITWU.ETH stated: "This bill opens up the imagination for the next decade of Crypto."
He believes that once passed, the most promising assets to bet on are ETH— the underlying infrastructure for stablecoins and DeFi; followed by BTC— the representative of safe-haven assets. The real explosive potential lies in the entire RWA (Real World Assets) sector. As he puts it, "BTC is the biggest fish in this pool, ETH is the irrigation pipe. But what’s truly worth betting on is the new financial landscape that emerges as the water flows."
Placeholder partner Chris Burniske also sees promise in Ethereum's position. He pointed out that the GENIUS Act may have the most direct benefits for ETH, as Ethereum has a vast stablecoin ecosystem, a solid DeFi infrastructure, and a long-established network of institutional partnerships. SOL follows closely, while TRX may become an overlooked dark horse due to historical factors.
Macroeconomic Perspective: Another Piece of the Puzzle for Dollar Digitization
For policymakers, the "GENIUS Act" is not just about "regulation"; it may also be an important part of the dollar's quest for dominance in the digital world.
Bo Hines, Executive Director of the Trump Digital Assets Advisory Committee, stated that the "GENIUS Act" will solidify the position of stablecoins within the dollar ecosystem, modernize payment infrastructure, and enhance transaction efficiency and transparency. He believes: "Digital asset technology is the core of the next generation of finance, and the U.S. is poised to take a leading position in the global fintech landscape through this bill."
@CryptoPainter_X pointed out that the bill may reflect a certain "debt reduction strategy" by the government, which, while not the main narrative, still holds long-term benefits for crypto assets.
As for foreign stablecoins (like USDT, TUSD), the doors to the U.S. market are not completely closed, but the entry barriers have significantly increased. @BTCBruce1 noted that the GENIUS Act introduces two new requirements: First, foreign stablecoins must comply with U.S. auditing and information disclosure standards; second, the president has the authority to veto their circulation based on national security. This means that the digital dollar is quietly constructing a "gatekeeper mechanism" for global deployment.
Twitter user @0xulai more directly stated: "The GENIUS amendment is essentially putting a tightening noose on the financial ambitions of big tech companies—preventing Meta, Google, and Microsoft from 'messing around' in the financial sphere."
Project Perspective: Is Compliance an Opportunity or a Barrier?
Coinbase CEO Brian Armstrong clearly supports the bill, believing that its clear regulatory framework will promote the legalization of stablecoins and foster market growth. As one of the main issuers of USDC, Coinbase will undoubtedly benefit, especially in the context of increasing compliance demands from institutional clients.
For decentralized stablecoin projects, the situation is less optimistic. Mint Ventures partner Alex Xu pointed out that although the "GENIUS Act" is being discussed as a boon for stablecoin concept projects (like Ethena, Sky, Liquity, Aave, etc.), if the bill is formally passed, most of these projects will likely struggle to meet compliance requirements, potentially paving the way for traditional financial institutions to enter the competition, making the market even more intense.
@cmdefi added: "Most existing projects do not meet the bill's requirements; this feels more like a framework prepared for new entrants. The demand for fully decentralized stablecoins still exists, such as those resistant to censorship and non-dollar pegged, but the path to realization will be more tortuous."
Feng Liu, former editor-in-chief of Chain News, pointed out from another perspective that the bill's prohibition on interest-bearing stablecoins will force many decentralized projects to rethink their product structures. In his view, this change is more likely to encourage decentralized projects to further strengthen their decentralized characteristics rather than attempt to integrate into a compliance system.
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