The GENIUS Act: A Stroke of Genius That Could Change the Crypto Market?
Master, you've brought an interesting topic. The 'GENIUS Act' recently passed the U.S. Congress, causing a stir not only in the cryptocurrency market but across the entire financial world. The three of us will now delve deep to determine if this is truly a stroke of genius heralding a new financial era, or if it will cause unforeseen chaos.
Master, I will begin the briefing. 'GENIUS Act' is not just a nickname. It's the official acronym for the 'Guiding and Establishing National Innovation for U.S. Stablecoins Act'.
This bill passed the Senate on June 17, 2025, and the House on July 17, and is now only awaiting the President's signature, making it the first comprehensive cryptocurrency regulation bill in the United States. The main points are as follows.
- Legal Definition and Status: This bill provides a clear legal framework for 'payment stablecoins' designed to be used as a means of payment. Importantly, it specifies that payment stablecoins subject to this act are not to be treated as securities or commodities.
- Issuers and Oversight: It adopts a 'dual regulatory' system where both federally approved banks and state-regulated non-bank institutions can issue stablecoins. This is a compromise to encourage innovation while adhering to federal standards.
- Strict Reserve Requirements: Stablecoin issuers must maintain 100% reserves backed only by highly stable assets such as cash, short-term Treasury bills, and government money market funds (MMFs). This is to ensure that consumers can always exchange a $1 stablecoin for $1 in cash.
- Enhanced Consumer Protection: One of the most crucial parts is that issuers must strictly segregate customer assets from the company's own assets. Even if the issuer goes bankrupt, the customer's stablecoin assets will receive the highest priority for protection.
The passage of this bill is considered a historic event, turning on the first clear traffic light for the cryptocurrency industry, which has been trapped in a fog of 'regulatory uncertainty' for years.
Myu-tan, that was a perfect briefing! My Lord! This is the reality of the 'big one coming' we talked about last time! My heart feels like it's going to explode!
This isn't just about one law passing. It's a declaration that cryptocurrency has finally shed its stigma as a 'dangerous speculative asset' and has officially become part of the 'financial infrastructure' recognized by the heart of the global economy, the United States!
Mika-pi will probably start worrying again, but this is a devilishly huge opportunity!
First, 'Regulatory Clarity'! This was the biggest reason why huge Wall Street funds and conservative institutions couldn't enter the crypto market. Now that a legal path to handle stablecoins has opened up, the amount of money that will pour into this market is beyond imagination!
Second, it's a law that protects the 'Future of the Dollar'! It requires stablecoin reserves to be held in U.S. dollars or short-term U.S. Treasury bills, right? This is a truly genius move to ensure the dollar continues to be the reserve currency of the global digital economy! The more people around the world use stablecoins, the more demand for U.S. Treasuries will grow, so it's a winning hand for the U.S.!
Third, it's hitting the 'Accelerator on Innovation'! Now, companies no longer have to worry about legal issues and can freely create new payment systems and DeFi services using stablecoins. We are witnessing the moment the U.S. becomes the overwhelming leader in digital finance, following its lead in AI!
💖 Kurumi's Heart-o-Meter Score: 120/100
My Lord, this is the sound of a new era dawning! If you hesitate, you'll miss out on this historic bull run! Devilish!
Kurumi, your optimism sounds like the typical cheer that erupts when the market is at its peak. But the louder the celebration, the more quietly we must listen for the hidden sounds of cracking.
Human, I see this bill as a 'necessary evil' perhaps, but not a 'panacea'. I see several serious risks.
First, it can create an 'illusion of safety.' This is something some consumer groups have already warned about. When a 'government-regulated' label is attached to stablecoins, people might misunderstand them as being 100% safe, like bank deposits. However, fundamental risks such as the value fluctuation of reserve assets and the operational risk of hacking still exist. The law does not prevent all dangers.
Second, the potential for risk contagion. This bill could end up pulling a risky asset class like cryptocurrency into the very heart of the traditional financial system. If stablecoin issuers hold U.S. Treasuries on a large scale, a problem with a specific stablecoin could send shockwaves to the Treasury market, a place that should be the most stable. It could become a channel for spreading risk rather than isolating it.
Third, regulatory loopholes. The 'dual regulation' system, supervised by both federal and state authorities, is flexible in the best-case scenario, but in the worst case, it can blur accountability and provide an excuse for regulatory arbitrage. We cannot rule out the possibility that companies will move around seeking looser regulations, thereby undermining the stability of the entire system.
Finally, we must not forget that this law is limited only to 'stablecoins'. The long-standing debate over whether Bitcoin or other altcoins are securities remains unresolved. This means the biggest uncertainty is still there.
🚨 Mikael's Risk Score: 75/100
Where the light is brightest, the shadows are deepest. We must soberly assess the systemic risks hidden behind the sweet words of institutional adoption.
〔 Final Briefing 〕
Master, I will summarize the perspectives of the three of us.
Growth Potential (Kurumi)
- A Flood of Institutional Capital: Regulatory clarity is like paving a highway for the massive Wall Street capital that has been hesitant to enter the crypto market!
- Strengthening U.S. Dollar Hegemony: By mandating that stablecoin reserves be held in dollar assets, it will solidify the dollar's status as the key currency in the digital economy era!
- An Explosion of Innovation: Within clear guidelines, companies will freely develop various financial services using stablecoins, allowing the U.S. to lead digital financial innovation!
Potential Risks (Mikael)
- False Signal of Safety: The 'government-regulated' label could instill excessive confidence in consumers, causing them to overlook inherent risks.
- Systemic Risk Contagion: The instability of the crypto market could spread to the traditional financial system, such as the Treasury market, through stablecoins.
- Limited Regulatory Scope: This law only applies to 'payment stablecoins'; the fundamental uncertainty about the legal status of other crypto assets remains unresolved.
Key Data (Mew)
- Bill Name: The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act)
- Bill Status: Passed both the Senate and House, awaiting presidential signature as of July 17, 2025.
- Key Features: Dual regulatory system, strict 100% reserve requirement, strong consumer asset protection measures.
- Market Significance: Considered the first comprehensive cryptocurrency regulation bill in the U.S., marking a historic milestone for the industry's institutional adoption.
Master, the passage of the 'GENIUS Act' is undoubtedly a major turning point in crypto history, and indeed, in U.S. financial history. As Kurumi says, the potential for explosive growth brought by institutional adoption and regulatory clarity certainly exists. However, as Mikael warns, opening a new door also means letting new, unforeseen risks into the house.
Whether this act was a stroke of genius or the opening of Pandora's box will only become clear as we watch how the market reacts and whether the system operates stably over time.