GENIUS Act ‘legitimizes’ stablecoins for global institutional adoption
Stablecoin adoption among institutions could surge as the United States Senate prepares to debate a key piece of legislation aimed at regulating the sector.
After failing to gain support from key Democrats on May 8, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act passed the US Senate in a 66–32 procedural vote on May 20 and is now heading to a debate on the Senate floor.
The bill seeks to set clear rules for stablecoin collateralization and mandate compliance with Anti-Money Laundering laws.
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“This act doesn’t just regulate stablecoins, it legitimizes them,” said Andrei Grachev, managing partner at DWF Labs and Falcon Finance.
“It sets clear rules, and with clarity comes confidence. That’s what institutions have been waiting for,” Grachev told Cointelegraph during the Chain Reaction daily X spaces show on May 20, adding:
“Stablecoins aren’t a crypto experiment anymore. They’re a better form of money. Faster, simpler, and more transparent than fiat. It’s only a matter of time before they become the default.”
Senate bill seen as path to unified digital system
The GENIUS Act may be the “first step” toward establishing a “unified digital financial system which is borderless, programmable and efficient,” Grachev said, adding:
“When the US moves on stablecoin policy, the world watches.”
Republican Senator Cynthia Lummis, a co-sponsor of the bill, also pointed to Memorial Day as a “fair target” for its potential passage.
Grachev said regulatory clarity alone will not drive institutional adoption. Products offering stable and predictable yield will also be necessary. Falcon Finance is currently developing a synthetic yield-bearing dollar product designed for this market, he noted.
Yield-bearing stablecoins now represent 4.5% of the total stablecoin market after rising to $11 billion in total circulation, Cointelegraph reported on May 21.
Related: Stablecoins seen as ideal fit for real-time collateral management
GENIUS Act regulatory gaps don’t address offshore stablecoin issuers
Despite broad support for the GENIUS Act, some critics say the legislation does not go far enough. Vugar Usi Zade, the chief operating officer at Bitget exchange, told Cointelegraph that “the bill doesn’t fully address offshore stablecoin issuers like Tether, which continue to play an outsized role in global liquidity.”
He added that US-based issuers will now face “steeper costs,” likely accelerating consolidation across the market and favoring well-resourced players that can meet the new thresholds.
Still, Zade acknowledged that the legislation could bring greater “stability” to regulated offerings, depending on how it is ultimately worded and enforced.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
Reform’s plan was meant to be detailed. Instead, there’s more confusion.
The party had grown weary of the longstanding criticism that their tough talk on immigration did not come with a full proposal for what they would do to tackle small boats if they came to power.
So, after six months of planning, yesterday they attempted to put flesh on to the bones of their flagship policy.
Politics latest: Farage rows back on pledge to deport illegal migrant women and girls
At an expensive press conference in a vast airhanger in Oxford, the headline news was clear: Reform UK would deport anyone who comes here by small boat, arresting, detaining and then deporting up to 600,000 people in the first five years of governing.
They would leave international treaties and repeal the Human Rights Act to do it
But, one day later, that policy is clear as mud when it comes to who this would apply to.
Nigel Farage launched an airport-style departures board to illustrate how many illegal migrants have arrived in the UK. Pic: PA
I asked Farage at the time of the announcement whether this would apply to women and girls – an important question – as the basis for their extreme policy seemed to hinge on the safety of women and girls in the UK.
He was unequivocal: “Yes, women and children, everybody on arrival will be detained.
“And I’ve accepted already that how we deal with children is a much more complicated and difficult issue.”
But a day later, he appeared to row back on this stance at a press conference in Scotland, saying Reform is “not even discussing women and children at this stage”.
Read more:
Farage has a new ‘leave’ campaign – here’s how it could work
He later clarified that if a single woman came by boat, then they could fall under the policy, but if “a woman comes with children, we will work out the best thing to do”.
A third clarification in the space of 24 hours on a flagship policy they worked on over six months seems like a pretty big gaffe, and it only feeds into the Labour criticism that these plans aren’t yet credible.
If they had hoped to pivot from rhetoric to rigour, this announcement showed serious pitfalls.
But party strategists probably will not be tearing out too much hair over this, with polling showing Reform UK still as the most trusted party on the issue of immigration overall.
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