US Nears Stablecoin Legislation Amid Retailer Interest

Congress is advancing significant stablecoin legislation with the GENIUS Act and STABLE Act, poised for enactment by 2025, gaining momentum with bipartisan support in the Senate.

This advancement may redefine the USD stablecoin landscape, affecting issuers like Circle and Tether. Potentially, it accelerates retail adoption with lower transaction costs and improved point-of-sale integration.

GENIUS Act Gains Bipartisan Senate Support

Congressional leaders are advancing stablecoin legislation, notably the GENIUS Act, with strong bipartisan backing. This comes amid a broader regulatory push led by US policymakers, emphasizing payment stablecoins as regulated instruments.

Involved parties include the US Senate and the House, backed by President Trump, who intends to sign the legislation. These efforts focus on stabilizing market structure and transaction efficiency within the broader financial ecosystem.

Circle and Tether Brace for New Compliance Demands

Major stablecoin issuers, notably Circle and Tether, face rigorous compliance and capital requirements under the new rules. These changes may translate to cost adjustments impacting on-chain liquidity and settlement protocols.

Stablecoin adoption aims to deliver lower transaction fees and expedient settlements. Historical contexts suggest regulatory clarity boosts institutional participation and stabilizes DeFi protocols, with potential shifts in DeFi governance tokens like MKR and AAVE.

Lessons from Past BitLicense Adoption

Similar regulatory announcements in the past generated short-term market volatility, especially in major stablecoins. This legislative shift echoes the past BitLicense adoption that eventually stabilized and encouraged market growth.

Experts from Kanalcoin suggest increased institutional engagement and enhanced protocol resilience will follow as issuers adapt. Aligning regulatory frameworks with past outcomes, it suggests structured compliance may spur retail and DeFi growth.

“The two key legislative efforts are the GENIUS Act and a regulatory framework for market structure.” – David Sacks, White House AI and Crypto Advisor