The GENIUS Act, signed into law on July 18, is already reshaping the crypto landscape. Within a week of its passage, the stablecoin sector ballooned by nearly $4 billion, pushing the total market cap to over $264 billion and drawing a wave of institutional interest.
The legislation introduces a clear federal framework for fiat-backed stablecoins, eliminating previous uncertainties and enforcement risks from the Securities and Exchange Commission (SEC). This newfound clarity has catalyzed a rapid influx of capital, innovation, and corporate entrants.
Even before the Act was finalized, financial heavyweights had signaled interest. Coinbase CEO Brian Armstrong stated in May that he welcomed banks into the stablecoin space. “I think everybody should be able to create stablecoins,” he said.
Now, traditional finance is moving swiftly. On Tuesday, Anchorage Digital, the only federally chartered crypto bank in the U.S., launched a stablecoin issuance platform in partnership with Ethena Labs. Ethena’s USDtb will operate onshore under the GENIUS Act.
That same day, Wall Street giant WisdomTree released USDW, a fully fiat-backed stablecoin designed to comply with the Act and support tokenized assets with dividend payouts.
Meanwhile, major banks are aligning their strategies. Bank of America CEO Brian Moynihan revealed interest in launching a stablecoin pending full regulatory compliance. JPMorgan and Citigroup have also confirmed stablecoin initiatives are in progress.
Currently, fiat-backed stablecoins dominate, representing around 85% of the market. USDT (Tether) and USDC (Circle) lead with a combined capitalization exceeding $227 billion. These tokens, now federally regulated, must hold full reserves and undergo audits.
Other stablecoin types—crypto-backed, algorithmic, and commodity-backed—face varied prospects. Crypto-backed coins like DAI remain viable, while algorithmic ones are sidelined under the Act. Commodity-backed tokens like Pax Gold show promise but suffer from adoption hurdles.
As GENIUS Act implementation unfolds, the crypto ecosystem braces for intensified competition and transformation—backed by the legitimacy Wall Street once hesitated to grant.
