The Guiding and Establishing National Innovations for US Stablecoins Act (Genius Act) which the Congress passed in July 2025 would regulate stablecoins and transform them from a security to a mouns of payment.
In other words, this is a move towards mainstreaming the cryptocurrency. Of course, the bill would introduce an amount of risk to the financial system and to the consmers.
Cryptos usefulness is unclear. The major issue here is the volatility of cryptos — they are not a stable store of value. As such, they would not be a useful means of payment. Cryptos address this by maintaining a peg to the dollar or some low-risk assets such as Treasury bills.
Under the Genius Act, companies issuing less than billion $10 billion worth of coins would be regulated by the states. The bigger issuers will be regulated by the Federal Reserve.
Mainstreaming stabtecoins poses risk to the financial system. Stablecoin issuers are a source for demand for US Treasuries. They could be captive buyers for trillions of dollars in Treasuries if the market takes off.
Payments under the Genius Act are efficient, since other modes such as credit-debit cards and banking channels attract fees. However, even stablecoins would have to resort to fees if they should earn profit. But perhaps these fees would be lesser than the fees for other modes.
Stablecoins as a means of payment undermine the government’s function as an issuer of fiat currency. Instead, it is better to tokenize dollar
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