Original Title: "The Stablecoin Bill GENIUS Act Passed, Which Encryption Assets Will Benefit from This?"

Original source: Deep Tide TechFlow

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

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

As the first comprehensive U.S. federal stablecoin regulatory bill, the rapid advancement of the GENIUS Act has sparked a heated response from the encryption 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 and 3.7 trillion USD, and the passage of the bill has provided more qualitative and developmental space for stablecoin "compliance," giving traditional companies a more reasonable justification for entry.

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

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

From "Barbaric Growth" to Standardization

GENIUS Act, literally translated as "Genius Act", actually stands for the "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025."

In simpler terms, it is a legislative document of the United States government.

The market's attention is due to the fact that it is the first comprehensive federal regulatory bill targeting stablecoins in U.S. history. Prior to this, stablecoins and cryptocurrencies have always existed in a delicate gray area:

As long as it is not explicitly prohibited by law, it can be done, 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 contents of the bill include:

· Reserve Requirements: Stablecoin issuers must have 100% reserve backing, with reserve assets being high liquidity assets such as US dollars and short-term US Treasury bonds, and must publicly disclose the reserve composition monthly.

· Regulatory Classification: Large issuers with a market cap exceeding 10 billion dollars (such as Tether, Circle) are subject to direct regulation by the Federal Reserve System or the Office of the Comptroller of the Currency (OCC), while small issuers can be regulated at the state level.

· Transparency and Compliance: Misleading marketing is prohibited (such as claiming that stablecoins are backed by the U.S. government), and issuers are required to comply with anti-money laundering (AML) and know your customer (KYC) regulations. Issuers with a market capitalization exceeding $50 billion must conduct annual audits of their financial statements to ensure transparency.

This means that the United States' attitude towards stablecoins is actually friendly, provided that the stablecoins are backed by US dollars and meet the requirements for openness and transparency.

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

The stablecoin market is rapidly developing, but the risks caused by the lack of regulation are becoming increasingly apparent, such as the collapse of the algorithmic stablecoin UST in 2022, highlighting 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 members Kirsten Gillibrand and Cynthia Lummis, officially introduced the GENIUS Act, aimed at balancing innovation and regulation. On March 13, the bill was passed by 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 60-vote threshold (48-49), with some Democratic lawmakers, such as Elizabeth Warren, expressing concerns that the bill might benefit Trump family's encryption projects (such as the USD1 stablecoin), believing there is a conflict of interest.

After revisions, the bill added restrictions on big tech companies, alleviating some lawmakers' concerns about conflicts of interest, and was ultimately passed by a procedural vote of 66-32 on May 19, with expectations of being passed soon by a simple majority in the Senate's full vote.

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

First, the market wants certainty. The passage of the bill basically marks the transition of the US stablecoin market from "barbaric growth" to normalization, filling a long-term regulatory gap and providing certainty for the market.

Secondly, it is clear 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 encryption market legislation (such as market structure bills), promoting the integration of the encryption industry with traditional finance, giving you the legal basis for going mainstream.

Relevant Encryption Assets

The core provisions of the GENIUS Act directly impact the stablecoin ecosystem and, through a chain reaction, affect the entire encryption market. This regulatory framework will not only reshape the stablecoin industry but also influence various encryption 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 regarded as a positive factor, corresponding adjustments need to be made in product design and business operations.

We have compiled a list of some larger projects and summarized the benefits and adjustments as follows.

Centralized stablecoin issuers:

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 regulations will attract more institutional funds, expanding their use in trading and payment fields.

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

The GENIUS Act requires reserve assets to be primarily in US Treasury bonds, and Tether has fully complied with this, and its transparency measures (such as quarterly audits) also meet the requirements of the act. However, the focus is on the fact that the use of USDT has always had some gray industry aspects (such as telephone 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 in 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 could make USDC the preferred stablecoin for institutions, especially in the DeFi space (by 2025, USDC's share in DeFi has reached 30%), 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 through over-collateralization of encrypted assets (such as ETH). Currently, about 10% of its reserves are in U.S. Treasuries (approximately $900 million), primarily collateralized by encrypted assets (data source: MakerDAO May 2025 report).

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

$FXS (Frax Finance, issuing FRAX): FRAX has a market capitalization of approximately $2 billion and uses a partially algorithmic mechanism (50% collateral, 50% algorithm), with approximately 15% of collateral assets being U.S. Treasuries (approximately $300 million). If Frax adjusts to a fully collateralized model and increases the proportion of U.S. debt, it could benefit from market expansion, but its algorithmic mechanism may face regulatory pressure, as the bill does not protect algorithmic stablecoins.

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

Its strategy may need significant adjustments 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 around 2 billion USD in 2025), with 70% of its liquidity pool consisting of stablecoin trading pairs (such as USDT/USDC).

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

$UNI (Uniswap): Uniswap is a general 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 increase in stablecoin trading activity brought by the legislation will indirectly benefit Uniswap, but its degree of benefit is lower than that of Curve (due to its more diversified business). $UNI holders can profit from trading fees (approximately 3% annualized).

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

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

$COMP (Compound): The TVL of Compound 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, and the potential increase of $COMP may be relatively small.

Yield Protocol

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

Layer1

$ETH (Ethereum): Ethereum hosts 90% of stablecoin and DeFi activities (with DeFi TVL expected to exceed $100 billion by 2025). The increased use of stablecoins driven by legislation will boost on-chain transaction volume on Ethereum (current Gas fees generate approximately $2 billion in annual revenue), 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 by 2025, the circulation of USDT on the Tron chain will be about $60 billion, accounting for 46% of the total USDT supply; the increase in stablecoin usage driven by legislation may enhance Tron’s on-chain activity.

$SOL (Solana): Solana has become an important platform for stablecoins and DeFi due to its high throughput and low costs (with an estimated TVL of about $8 billion in 2025 and an on-chain USDC circulation of about $5 billion). The increase in stablecoin usage will drive Solana's DeFi activity (currently with an average daily trading 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 USD 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 the increased activity in the ecosystem (with current daily active users around 500,000).

$APT (Aptos): Aptos is also an emerging Layer 1 (with a projected TVL of around $800 million in 2025), and its ecosystem supports stablecoin payments. Increased circulation of stablecoins will drive Aptos's payment and DeFi applications, 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 demand for stablecoin cross-border payments driven by legislation (such as USDC for international settlements) will indirectly enhance the use cases of XRP (such as serving 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 about $500 million in 2025) and has partnered 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 DeFi's demand for real-time price data, which may lead to a rise in on-chain data call volume.

But this is more like an extension of a sector's favorable logic, rather than a complete strong correlation.

RWA

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

Dollar, a greater conspiracy

The U.S. is promoting stablecoin legislation, which can also be regarded as a "public conspiracy."

On one hand, the United States hopes for a weaker 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 digitally extended the global influence of the dollar without increasing the liabilities of the Federal Reserve—currently, 99% of stablecoins are pegged to the dollar.

At the same time, the regulatory requirement that stablecoins must hold U.S. Treasury bills as reserves has cleverly found new buyers for U.S. debt, as evidenced by Tether's holdings of U.S. debt which have already surpassed those 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, achieving two goals with one action.

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

However, this "sunny strategy" is also a double-edged sword—while it brings opportunities, its high dependence on US debt, potential suppression of DeFi innovation, and the uncertainties of global competition may become hidden dangers in the future.

However, uncertainty is always the ladder for the encryption market to progress.

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

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