Blog | Cryptocurrency

Stablecoins are Blasting Off Thanks to the GENIUS Act

How a U.S.policy shift could amp up crypto adoption

summary

• Stablecoins got the green light from the U.S. government.

• The GENIUS Act gives them rules, protections, and real-world legitimacy.

• This is huge for crypto adoption, particularly for Bitcoin and DeFi.

• Big banks and payment giants are already moving forward with plans.

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What is the Genius Act?

So, what is the GENIUS Act? And how does it apply to crypto investors?

GENIUS stands for The Guiding and Establishing National Innovation for U.S. Stablecoins.It is a bill that finally establishes real rules for stablecoins in the U.S. This legislation creates a comprehensive regulatory framework for stablecoins, outlining new rules for their issuance and operation.

Up until now, stablecoins have been operating in a gray area. Billions of dollars are flowing through them every day, and there has been little to no federal oversight.

This bill changes that.

It was introduced by Senator Bill Hagerty and passed in the Senate with a bipartisan vote of 68–30 on June 17, 2025.

Let’s clarify what this means. It means that both sides agree that stablecoins should have a place in the financial market and be used for payments. They want to give stablecoins a framework that protects users and still encourages innovation.

Now, let’s explore what the GENIUS Act actually does:

• It sets clear rules for dollar-backed stablecoins and requires that they’re backed 100% by safe assets like cash or U.S. Treasuries.

• It forces transparency, with monthly audits and reporting, so the public knows what’s backing their tokens.

• It gives stablecoin holders legal protections in case of bankruptcy, meaning your tokens are tied to real, redeemable dollars.

• And it blocks future political crackdowns by establishing federal protections, like helping avoid another Operation Chokepoint-style attack on digital assets.

Stablecoins are not new; they’ve been around for years and are already being used globally. As of July 2025, more than $250 billion worth of U.S. dollar stablecoins were in circulation>.

Because stablecoins must be backed by the U.S. Treasuries under this act, the GENIUS Act helps boost demand for U.S. debt, which strengthens the dollar’s global dominance.

The GENIUS Act could impact the global economy by strengthening the dollar's role and encouraging the creation of new stablecoins and other forms of coins.

Only time will tell what impact this has on the USD in the future. The legislation is expected to bring more firms into the stablecoin market and increase competition to help benefit consumers and the broader finance industry.

How Will the Genius Act Affect Bitcoin?

Some people are asking how the GENIUS Act affects Bitcoin. Itdoesn't regulate Bitcoin directly, but it is mainstreaming stablecoin benefits to the crypto ecosystem.

Easier access to liquidity only helps to improve Bitcoin’s on‑ramp appeal.

Compliant stablecoins help to lower friction for traders and institutions entering Bitcoin positions, and this is a big deal for those involved in DeFi or cross-asset portfolio strategies.

As Circle’s USDC and Tether’s USDT get clearer backing and approvals, crypto rails become more stable and accepted. As a result, this will deepen Bitcoin's liquidity.

We can already see Bitcoin’s price responded well by rising ~2% on July 16 as optimism spread around the regulatory progress.

Good regulations mean good news for Big Bitty.

Why Stablecoins Matter

If you don’t know what stablecoins are, they're crypto tokens that are 1-to-1 with fiat currency. For instance, a USDC coin is backed by US dollars, and its value is tied to the value of USD.

This means you get the speed and flexibility of owning crypto without the volatility that other types of tokens have.

Stablecoins are useful for things like making fast, low-cost payments, and they hold their value during market downturns.

Stablecoins can be easily moved across borders without needing a bank. They’re especially important in countries with unstable currencies, where holding dollars in digital form can protect someone’s savings.

Stablecoins are also very important when it comes to crypto trading. They are what give more volatile tokens their liquidity. Here’s an example:

Let’s say you want to buy Bitcoin, but it’s a bad time in the crypto market and you’re not ready to enter yet. You can convert your fiat into a stablecoin like USDC and just wait.

That’s it.

When the price is right, you can trade your USDC for Bitcoin instantly with no need to wire money or wait for your bank to clear a transaction.

Another example is using stablecoins to determine how much liquidity is invested in a token.

When you look at a DEX (Decentralized Exchange) chart like on DEXScreener and see a trading pair like ETH/USDC, the stablecoin side of that pair tells you how much real buying power is in the market.

(Source: DEXScreener)

If a token has millions of dollars in stablecoin volume, then that usually means there’s strong demand and deep liquidity, making it easy to sell when you need to. If only a few thousand dollars in stablecoins are backing the token, it might be harder to trade without affecting its price.

Not All Stablecoins Are Created Equal

Did you know that not all stablecoins are the same? This is a fact that many people, even within the crypto community, are unaware of. Stablecoins come in several forms, each with unique mechanisms for maintaining value. Different methods allow stablecoins to maintain their value. Stablecoins typically fall under these 5 different types:

• Fiat-Backed Stablecoins: backed 1:1 by traditional currency (USDC, USDT)

• Crypto-Collateralized Stablecoins: backed by crypto assets (DAI)

• Algorithmic Stablecoins: use code to control supply/demand (FRAX, AMPL)

• Commodity-Backed Stablecoins: backed by assets like gold (PAXG)

• Hybrid Stablecoins: combine collateral and algorithmic mechanisms (FRAX)

There are also other forms of stablecoins beyond those listed here, each with its advantages and risks.

What Big Companies Are Getting Involved

There are some pretty big companies that want to move forward with crypto because of the GENIUS Act. Big banks and payment processors like JPMorgan’s “JPM Coin” already process billions in cross-border transfers.Mastercard is piloting USDC settlement for merchants, and Visa has stablecoin payment rails in testing.

PayPal’s PYUSD is a stablecoin focused on the consumer space, complete with spending and rewards integration.

These institutions are trying to make stablecoins as familiar as debit cards.

Stablecoin Comparison Table

Here are a few of the most popular stablecoins available:

Stablecoin	Backed By	Transparency	Use Case	Risk Level	GENIUS Act Impact
USDC	Fiat (USD)	High	Payments, Trading	Low	Positive
USDT	Mixed Assets	Medium	Trading, Liquidity	Medium	Unclear
DAI	Crypto Collateral	High	DeFi & Smart Contracts	Medium	Likely Exempt
PYUSD	Fiat (USD)	High	PayPal Ecosystem	Low	Positive
FRAX	Algorithmic/Fiat	Low–Medium	Experimental DeFi	High	High Scrutiny

Final Thoughts

The GENIUS Act could be the foundation for a new digital financial era. Legitimizing stablecoins will allow lawmakers to accelerate the shift toward 24/7 global payment systems. As the future unfolds, we will see how major financial players leverage this.

The advantage of stablecoins is that they can be held in a DeFi self-custody wallet, meaning they don’t require a bank account, and they offer an easy on-ramp into crypto.

It’s another way to have a legitimate form of currency that you can truly manage, maintain, and take with you anywhere in the world.

(Disclaimer: This article is not financial advice and is intended for educational purposes only. It is important to conduct thorough research and only invest an amount that you are comfortable potentially losing. For personalized financial advice, consult a professional.)