The GENIUS Act Passed, Stablecoins Enter Regulatory Framework

In the early hours of today Beijing time, the U.S. House of Representatives passed three cryptocurrency-related bills, among which the GENIUS Act is expected to be formally signed into law on Friday local time. This marks the first time the U.S. has established a national regulatory framework for stablecoins, while also sending a clear signal: stablecoins are gradually moving out of the gray area and into the mainstream financial system. Meanwhile, other major financial centers such as Hong Kong and the European Union are also accelerating their efforts, and the global stablecoin landscape is undergoing a reshaping.

Looking back over the past few months, stablecoins have almost overnight transformed from a financial variable under regulatory scrutiny to a new type of infrastructure recognized by authorities. What is the driving force behind this transformation? Who is pushing stablecoins to become the new main players on the global financial stage? How should we rationally view this wave of enthusiasm?

The Shift from Web3 Narrative to National Strategy

Since the beginning of the year, stablecoins have undoubtedly become the focus of global financial policy and narrative. This craze is not a coincidence, nor is it a product of natural technological evolution, but rather a structural shift driven by policy forces. In particular, the policy shift during the Trump era played a highly disruptive role.

Trump has always been clear in opposing central bank digital currencies ( CBDC ) and supports a market-driven digital dollar approach. From supporting the family business's launch of USD1 to promoting and soon signing the GENIUS Act, Trump is delivering on his promise to loosen regulations on the crypto market.

This series of signals has directly prompted global regulatory authorities to begin re-evaluating stablecoins. Within just a few months, stablecoins have jumped from the fringes of the crypto sphere to become a key topic of discussion at the national strategic level. In addition to Hong Kong, which has finalized a timeline for its Stablecoin Regulation, major global economies have also begun to consider and accelerate the establishment of clear compliance frameworks for stablecoins.

The passage of the GENIUS Act is not only a loosening of regulations on stablecoins in the U.S., but also a clear choice regarding the digital dollar route—abandoning central bank digital currency ( CBDC ), and instead supporting compliant, privately issued dollar stablecoins. It can be anticipated that this statement from the U.S. will serve as a reference paradigm for regulatory designs in other countries, promoting the inclusion of stablecoins in the global financial policy discussion framework.

The development path of stablecoins is changing

In the past few years, the stablecoin market has long been dominated by USDT and USDC, representing the two paths of "circulation efficiency" and "compliance transparency" respectively. USDT focuses on cross-platform circulation and matching efficiency, occupying a dominant position in exchanges and settlement networks. USDC emphasizes asset compliance and transparency, deeply cultivating regulatory-friendly scenarios and institutional client systems.

From an overall scale perspective, since 2025, stablecoins have continued to maintain a growth trend. As of July 18, the total market capitalization of stablecoins across the network is approximately $262 billion, an increase of over 20% compared to the beginning of the year. This also means that during the recovery of the crypto market, stablecoins remain the most core "liquidity entry point", with the duopoly of USDT and USDC still solid. The total market capitalization of USDT exceeds $160 billion, accounting for more than 60%; USDC remains around $65 billion, accounting for about 25%, with the combined share of both close to 90%.

Starting from 2024, more and more Web2 financial enterprises and traditional capital forces are entering the market, using stablecoins to build on-chain settlement tools. For example, PYUSD and USD1 are two representative signals. PYUSD is launched by payment giant PayPal, naturally equipped with cross-border settlement scenarios and a global merchant network; USD1 aims for on-chain compliant deposits and withdrawals as well as cross-border businesses, gaining support from government and business resources to penetrate enterprise settlement scenarios.

With the support of institutions and national power, these emerging stablecoin projects are driving the functions of stablecoins from "Web3 liquidity tools" to evolve into a value bridge connecting Web3 and the real economic system. Their use cases are also gradually penetrating into diverse applications such as supply chain finance, cross-border trade, freelancer settlements, and OTC scenarios, moving beyond just exchanges and wallets.

The Real Challenges Facing Stablecoins

The GENIUS Act has granted stablecoins institutional recognition, but it has also brought more compliance requirements and set clearer regulatory boundaries for their development. For example, issuing entities must comply with KYC/AML management, funds must have custodial separation and third-party audits, and in extreme circumstances, issuance limits or usage restrictions may be imposed. This means that stablecoins have gained legal status but have also officially entered the role of "regulated currency."

From this perspective, whether stablecoins can break through the application limitations of Web3 is the key to achieving incremental landing. The greatest growth potential of stablecoins lies not within the Crypto internal circle, but in the broader Web2 and the global real economy.

Just like the main increase of USDT and USDC no longer comes from on-chain interaction users, but rather from small and medium-sized enterprises and individual merchants with strong demand for cross-border settlement, emerging markets and financially marginalized areas that cannot access the SWIFT network, residents of inflationary countries eager to escape local currency fluctuations, content creators and freelancers who cannot use mainstream payment tools, and so on.

In other words, the biggest growth of stablecoins in the future will not be in Web3, but in Web2. The true killer application of stablecoins is not "the next DeFi protocol," but "replacing traditional dollar accounts."

This also means that once stablecoins become the foundational carrier of the digital dollar globally, they will inevitably touch on sensitive nerves such as currency sovereignty, financial sanctions, and geopolitical order. Therefore, the next stage of growth for stablecoins will be closely related to the new landscape of dollar globalization, and it will also become a new battleground among governments, international institutions, and financial giants.

Conclusion

The essence of currency issuance has always been an extension of power. What it relies on is not only asset reserves and settlement efficiency, but also national credit, regulatory approval, and endorsement of international status.

Stablecoins are no exception. If we want to truly penetrate the real economic system from the Crypto world, relying solely on market mechanisms or commercial logic is ultimately insufficient. Therefore, the compliance boost brought about by the global policy shift in 2025 is certainly an important driver for stablecoins to move towards the mainstream, but it also means that they will have to survive in more complex games.

This is a long-term game, and we are at the stage where it truly begins.