The GENIUS Act brings clear rules for stablecoins in the US, including full asset backing and federal oversight.
- Stablecoin issuers must follow strict licensing and transparency rules.
- Yield-bearing stablecoins are no longer allowed under the new law.
- The law may push Europe to update its crypto regulations.
Stablecoins Must Now Be Fully Backed and Regulated
The US passed a new law called the GENIUS Act. It creates clear rules for stablecoins that are backed by real money. This means every stablecoin must be backed 1-to-1 by assets like US dollars. Issuers also need a federal license and must go through regular checks by independent auditors.
Fabian Dori, the chief investment officer at Sygnum Bank, says these steps help build trust. He believes the law will increase stablecoin use because investors will feel safe knowing their stablecoins are legally backed and verified.
No More Earning Interest from Stablecoins
One important change is that yield-bearing stablecoins are now banned. This means people can’t earn money just by holding these coins. Some in the crypto world see this as a downside since they used to make passive income from stablecoins.
Dori explains that this law creates two types of products: stablecoins for payments and tokenized money market funds for earning yield. This separation could make the market easier to understand and regulate.
A Shift in Global Crypto Leadership
The GENIUS Act might also affect crypto laws in other places. Dori points out that Europe has been slower in creating new crypto rules. He thinks the US is now leading by encouraging innovation, while Europe focuses more on reducing risk.
With the US offering a clear path for stablecoin companies, more investors and developers may move there. That could pressure Europe to catch up and allow more crypto growth within the region.
Source: cointelegraph.com
