As we enter the Independence Day weekend, I’ll allow myself a rare foray into American nationalism with this take:

GENIUS is one of the worst things to happen to USD stablecoins, and exactly what I would have written if I wanted to halt or reverse dollarization.
At the time of drafting, I noted many large loopholes in it that mean you can 100% offer non-GENIUS stablecoins in the US legally by avoiding being considered a “payment stablecoin” which has an absurdly narrow definition that betrays the authors’ lack of knowledge about both stablecoins and currency in general.
So I didn’t think it would be that big of a deal except for those under money transmission licenses. It seemed confined to being Circle and Paxos’ problem.
That looks increasingly not to be the case, and anyone who thinks GENIUS is the only way to offer a stablecoin legally hasn’t even read the definitions section of the law.
The fact is that GENIUS retards the core use case of stablecoins - the manufacture and delivery of dollars where dollars have unmet demand. Unlike USDT or DAI/USDS - the only two stablecoins who ever show signs of being viable standalone businesses - a GENIUS stablecoin must literally import dollars 1:1 wherever they operate. Total dollar supply does not grow, marginal demand in one market is met only by reducing supply in another market.
I would also be remiss in ignoring GENIUS does exactly what states did to the old “wildcat” banks that blew up in the 1800s - it forces them to hold government securities beyond what their risk management would choose. Otherwise there’s no need for the law.
So if you’re a dollar maximalist like myself, it’s hard to be anything but disappointed at how the industry has rushed to become GENIUS compliant or require it of counterparties. Not only are the rules for implementation not fully knowable yet, but GENIUS only makes illegal noncompliant *payment stablecoins*, which is a very narrow subset of stablecoins, and mainly captures money transmitters and other institutions that carry formal obligation to redeem in very specific ways.