The stablecoin bill GENIUS Act has been voted through, which encryption assets will benefit from this?

Written by: Deep Tide TechFlow

The sentiment in the crypto market is once again focused on regulatory actions.

On May 19, the U.S. Senate passed the GENIUS Act (the "2025 U.S. Stablecoin Innovation and Establishment Act") with a procedural vote of 66-32, marking a milestone progress towards the imminent establishment of a regulatory framework for stablecoins in the United States.

As the first comprehensive U.S. federal stablecoin regulation bill, the rapid advancement of the GENIUS Act has sparked a heated response in the crypto market, with the DeFi and RWA sectors related to stablecoins leading today's market.

Will the GENIUS Act become a catalyst for a new bull market?

According to Citibank's forecast, by 2030, the global stablecoin market size is expected to reach between $1.6 trillion and $3.7 trillion, and the passage of the bill has provided more qualitative compliance and development space for stablecoins, giving traditional companies more reasonable reasons to enter.

The market is also looking forward to the influx of incremental funds to bring about a "flood irrigation," injecting new liquidity into related crypto assets.

But before that, you should at least understand the contents of this bill and the legislative motives behind it in order to provide more convincing reasons for selecting relevant cryptocurrencies.

From "barbaric growth" to standardization

The GENIUS Act, directly translated as "Genius Act," is actually an abbreviation for the "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025."

In simpler terms, it refers to a legislative document at the national level in the United States.

The reason the market is paying attention is that it is the first comprehensive federal regulatory bill for stablecoins in U.S. history. Prior to this, stablecoins and cryptocurrencies have existed in a delicate gray area:

What is not explicitly prohibited by law is allowed, but the law does not provide clear rules on "how to do it."

The goal of the GENIUS Act is to provide legitimacy and security for the stablecoin market through a clear regulatory framework, while reinforcing the dominance of the dollar in digital finance.

In summary, the key content of the bill includes:

Reserve Requirements: Stablecoin issuers must have 100% reserve backing, and the reserve assets must include high liquidity assets such as US dollars and short-term US Treasury bonds, with the reserve composition disclosed publicly every month.

Regulatory Classification: Large issuers with a market capitalization exceeding $10 billion (such as Tether and Circle) must be directly regulated by the Federal Reserve System or the Office of the Comptroller of the Currency (OCC), while smaller issuers may be regulated by the states.

Transparency and Compliance: Prohibit misleading marketing (such as claiming that stablecoins are backed by the U.S. government) and require issuers to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Issuers with a market capitalization exceeding $50 billion must have annual audits of their financial statements to ensure transparency.

This means that the United States has a friendly attitude towards stablecoins, provided that they are backed by US dollars and meet the requirements of openness and transparency.

Looking back at history, the birth of the GENIUS Act was not an overnight success, but rather the culmination of years of exploration into stablecoin regulation in the United States. We have also quickly outlined the full timeline of this legislation to help you understand the background and motivations of the act.

The stablecoin market is rapidly developing, but the risks arising from the lack of regulation are becoming increasingly prominent. For example, the collapse of the algorithmic stablecoin UST in 2022 highlighted the need for clear regulation.

As early as 2023, the House Financial Services Committee proposed the STABLE Act, attempting to establish a regulatory framework for stablecoins, but it failed to pass in the Senate due to bipartisan disagreements.

On February 4, 2025, Senator Bill Hagerty, along with bipartisan lawmakers Kirsten Gillibrand and Cynthia Lummis, officially introduced the GENIUS Act, aimed at balancing innovation with regulation. On March 13, the bill passed the Senate Banking Committee with a vote of 18-6, demonstrating strong bipartisan support.

However, the first full vote on May 8 failed to reach the threshold of 60 votes (48-49), and some Democratic lawmakers (such as Elizabeth Warren) are concerned that the bill may benefit cryptocurrency projects of the Trump family (such as the USD1 stablecoin), believing there is a conflict of interest.

After revisions, the bill added restrictions on big tech companies and alleviated some lawmakers' concerns about conflicts of interest. It ultimately passed a procedural vote on May 19 with a vote of 66-32 and is expected to soon pass a full Senate vote with a simple majority.

So, what is the significance of the legislation reaching this point?

First of all, the market wants certainty. The passing of the bill essentially marks the transition of the U.S. stablecoin market from "barbaric growth" to normalization, filling a long-standing regulatory gap and providing certainty for the market.

Secondly, the clear indication is that stablecoins need to consolidate the position of the US dollar, especially under the competitive pressure of China's digital yuan and the EU's MiCA regulations.

Finally, the advancement of the GENIUS Act may pave the way for broader cryptocurrency market legislation (such as the Market Structure Bill), promoting the integration of the cryptocurrency industry with traditional finance, providing a legal basis for the expansion you desire.

Stakeholder-related crypto assets

The core provisions of the GENIUS Act directly impact the stablecoin ecosystem and ripple through the entire cryptocurrency market through a chain reaction. This regulatory framework will not only reshape the stablecoin industry but also affect multiple crypto sectors such as DeFi, Layer 1 blockchains, and RWA through the widespread application of stablecoins.

However, some projects in certain sectors do not fully meet the regulatory requirements of the legislation. If the legislation is to be viewed as a positive development, corresponding adjustments need to be made in product design and business operations.

We have organized some larger projects and listed the benefits and adjustment points as follows.

Centralized Stablecoin Issuer:

The reserve requirements of the bill (100% liquid assets, must hold U.S. Treasury bonds) and transparency regulations (such as monthly disclosures) are most beneficial for centralized stablecoins. These stablecoins have largely met the requirements, and clear regulation will attract more institutional funds, expanding their use in trading and payments.

$USDT (Tether): USDT is the largest stablecoin by market capitalization (with a market value of approximately $130 billion in 2025), with about 60% of its reserves consisting of U.S. short-term Treasury bonds (approximately $78 billion) and 40% in cash and cash equivalents (data source: Tether's Q1 2025 Transparency Report).

The GENIUS Act requires reserve assets to be primarily in U.S. Treasury bonds, and Tether has fully complied, with its transparency measures (such as quarterly audits) also meeting the requirements of the act. However, the focus is on the fact that the use of USDT has always had a gray area (such as in fraud, etc.), and how to adjust the business to adapt to regulations is the next issue that needs to be considered.

$USDC (Circle): USDC has a market capitalization of approximately $60 billion, with 80% of its reserves consisting of short-term U.S. Treasury bonds (about $48 billion) and 20% in cash (data source: Circle May 2025 Monthly Report). Circle is registered in the U.S. and actively cooperates with regulators (such as applying for an IPO in 2024), and its reserves fully comply with the requirements of the act. The passage of the act may make USDC the preferred stablecoin for institutions, especially in the DeFi space (with USDC's share in DeFi reaching 30% by 2025), and its market share is expected to further increase.

Decentralized Stablecoin:

$MKR (MakerDAO, issues DAI): DAI is the largest decentralized stablecoin (market cap of about $9 billion), issued by over-collateralizing crypto assets (such as ETH). Currently, about 10% of the reserves are in U.S. Treasury bonds (approximately $900 million), mainly collateralized by crypto assets (source: MakerDAO May 2025 report).

The strict requirements of the GENIUS Act for reserve assets may pose challenges for DAI, but if MakerDAO increases its proportion of U.S. Treasury reserves, it could benefit from overall market growth. $MKR holders may profit from the increased usage of DAI (with MakerDAO protocol's annual revenue around $200 million in 2025).

$FXS (Frax Finance, issuing FRAX): The market capitalization of FRAX is approximately $2 billion, using a partial algorithmic mechanism (50% collateralized, 50% algorithmic), with about 15% of the collateral assets in U.S. Treasury bonds (approximately $300 million). If Frax adjusts to a fully collateralized model and increases the proportion of U.S. Treasury bonds, it could benefit from market expansion, but its algorithmic mechanism may face regulatory pressure, as the legislation does not protect algorithmic stablecoins.

$ENA (Ethena Labs, issued USDe): USDe has a market cap of approximately 1.4 billion dollars, issued through ETH hedging and yield strategies, with only 5% of the reserves in US Treasury bonds (approximately 70 million dollars).

Its strategy may need to be significantly adjusted to comply with the requirements of the legislation. If successful, it could benefit from market growth, but there are also risks involved.

DeFi trading/lending

$CRV (Curve Finance): Curve focuses on stablecoin trading (with an estimated TVL of approximately $2 billion in 2025), where 70% of its liquidity pools consist of stablecoin trading pairs (such as USDT/USDC).

The increase in stablecoin usage driven by the GENIUS Act will directly boost Curve's trading volume (currently around $300 million daily). $CRV holders can benefit from trading fees (annual yield of about 5%) and governance rights. If the stablecoin market grows as predicted by Citigroup, Curve's TVL could potentially increase by another 20%.

$UNI (Uniswap): Uniswap is a universal DEX (with a projected TVL of about $5 billion in 2025), and stablecoin trading pairs (such as USDC/ETH) account for 30% of its liquidity. The increased trading activity of stablecoins brought about by the legislation will indirectly benefit Uniswap, but its degree of benefit is lower than that of Curve (due to its more diversified business), and $UNI holders can profit from trading fees (annualized at about 3%).

$AAVE (Aave): Aave is the largest lending protocol (approximately $10 billion TVL in 2025), with stablecoins (such as USDC, DAI) accounting for about 40% of its lending pool.

The passage of the bill will attract more users to use stablecoins for lending (such as collateralizing USDC to borrow ETH), and Aave's deposit and borrowing volumes may further increase (based on current trends). $AAVE holders benefit from protocol revenue (approximately $150 million annual revenue in 2025) and token value appreciation.

$COMP (Compound): Compound's TVL is approximately $3 billion, with stablecoin lending accounting for about 35%. Similar to Aave, an increase in stablecoin lending will benefit Compound, but its market share and innovation speed are lower than Aave, so the potential upside for $COMP may be relatively small.

Yield Agreement

$PENDLE (Pendle): Pendle focuses on yield tokenization (approximately $500 million TVL by 2025), with stablecoins commonly used in its yield strategies (such as USDC yield pools, currently with an annual yield of about 3%). The growth of the stablecoin market driven by legislation will increase Pendle's yield opportunities (for example, yields may rise to 5%), and $PENDLE holders may benefit from the growth in protocol revenue (approximately $30 million annual revenue by 2025).

Layer1

$ETH (Ethereum): Ethereum supports 90% of stablecoin and DeFi activities (with DeFi TVL exceeding $100 billion by 2025). The increase in stablecoin usage driven by legislation will boost Ethereum's on-chain transaction volume (current Gas fee annual revenue is about $2 billion), and the value of $ETH may rise due to increased demand.

$TRX (Tron): Tron is an important network for the circulation of stablecoins. Public data shows that the circulation of USDT on the Tron chain is approximately $60 billion in 2025, accounting for 46% of the total USDT supply; the increase in stablecoin usage driven by legislation may enhance on-chain activities on Tron.

$SOL (Solana): Solana has become an important platform for stablecoins and DeFi due to its high throughput and low costs (with a projected TVL of about $8 billion by 2025 and an on-chain USDC circulation of about $5 billion). The increase in stablecoin usage will drive DeFi activity on Solana (currently averaging daily transaction volume of about $1 billion), and $SOL may benefit from the increased on-chain activity.

$SUI (Sui): Sui is an emerging Layer 1 (with a projected TVL of about $1 billion in 2025) that supports stablecoin-related applications (such as Thala's stablecoin and DEX). The growth of the stablecoin ecosystem driven by legislation will attract more projects to deploy on Sui, and $SUI may benefit from increased ecosystem activity (with around 500,000 daily active users currently).

$APT (Aptos): Aptos is also an emerging Layer 1 (with a projected TVL of approximately $800 million in 2025), and its ecosystem supports stablecoin payments. The increase in stablecoin circulation will drive the payment and DeFi applications of Aptos, and $APT may benefit from user growth.

Payment Track

$XRP (Ripple): XRP focuses on cross-border payments (with an average daily transaction volume of about $2 billion in 2025), and its low-cost and high-efficiency characteristics can complement stablecoins. The increase in demand for stablecoin cross-border payments driven by legislation (such as USDC for international settlements) will indirectly enhance the use cases for XRP (such as acting as a bridge currency), and $XRP may benefit from the growth in payment demand.

$XLM (Stellar): Stellar also focuses on cross-border payments (with an average daily transaction volume of approximately $500 million in 2025) and has collaborated with IBM to launch the World Wire project, using stablecoins as bridge assets.

Oracle

$LINK + $PYTH: Oracles provide price data for stablecoins and DeFi, and the expansion of the stablecoin market driven by legislation will increase the demand for real-time price data in DeFi, which may lead to a growth in on-chain data calls.

But this is more like an extension of a sectoral positive logic rather than a complete strong correlation.

RWA

$ONDO (Ondo Finance): Focused on tokenizing fixed income assets such as U.S. Treasury bonds, its flagship product USDY (U.S. Treasury-backed stable yield token) has been issued on chains like Solana and Ethereum (with an expected circulation of approximately $500 million in USDY by 2025). The GENIUS Act requires stablecoin reserves to hold U.S. Treasury bonds, which directly benefits Ondo's U.S. Treasury tokenization business, making USDY a potential preferred reserve asset for stablecoin issuers. Additionally, the increase in stablecoin circulation will drive retail and institutional investors to purchase USDY through USDC, which may boost the demand for Ondo's asset tokenization, benefiting $ONDO holders.

US dollars, a greater conspiracy

The U.S. is promoting stablecoin legislation, which can be considered a form of "overt conspiracy."

On one hand, the United States hopes for a weak dollar policy to increase exports, while on the other hand, it does not want to give up the dollar's status as the global currency.

By supporting the development of stablecoins, the United States has extended the global influence of the dollar in a digital manner without increasing the liabilities of the Federal Reserve - currently, 99% of stablecoins are pegged to the dollar.

At the same time, the regulatory requirement for stablecoins to hold U.S. short-term Treasury bonds as reserves cleverly finds new buyers for U.S. Treasuries, just as the scale of U.S. Treasuries held by Tether has already surpassed that of many developed countries.

This policy not only maintains the global dominance of the US dollar but also finds a reliable buyer for America's massive debt, effectively killing two birds with one stone.

The passage of the GENIUS Act is undoubtedly a milestone for the cryptocurrency market, as it provides a new path for the continuation of the U.S. dollar's hegemony through the binding of stablecoins and U.S. Treasury bonds, while also promoting the overall prosperity of the crypto ecosystem.

However, this "overt scheme" is also a double-edged sword - while it brings opportunities, its high dependence on U.S. debt, the potential suppression of DeFi innovation, and the uncertainties of global competition may all become future hidden dangers.

However, uncertainty is always the ladder that moves the cryptocurrency market forward.

Risks can be uncertain, but participants are all waiting for a definitive bull market to arrive.