GENIUS Act – The first stablecoin act in the U.S.
The GENIUS Act has just been passed by the U.S. House of Representatives.
If approved by the Senate, this will lay the foundation for a trillion-dollar stablecoin market.
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1/ GENIUS requirements:
– The stablecoin must be backed 1:1 by USD or equivalent assets
– There must be transparent reporting
– The issuing organization must register & comply with KYC/AML
→ Directing stablecoins towards becoming mainstream payment tools
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2/ Impact:
– Establish a clear legal framework for stablecoins in the U.S. for the first time
– Open the door for banks and financial corporations to participate
– Promote adoption on a global scale, especially with USDC & PayPal USD
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3/ Associated risks:
– Decentralized stablecoins (like DAI, FRAX...) may be pushed to the sidelines
– Non-compliant projects will find it hard to access the US market
→ Stablecoins will be strongly polarized: compliant vs non-compliant
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4/ Pyra's perspective:
The GENIUS Act opens up a new game for stablecoins.
An opportunity for compliant parties, a challenge for decentralized ones.
The stablecoin narrative may heat up again, but it probably won't be the same as before.
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