The GENIUS Act Takes Effect—Which Stablecoins Now Have Reason to Tremble! With the *GENIUS Act* (Guiding and Establishing National Innovation for U.S. Stablecoins Act), the U.S. is drawing a hard line against unregulated crypto-backed currencies. By the July 2028 deadline, all issuers must comply with strict requirements—including true 1:1 backing by U.S. dollars or short-term Treasury securities, as well as official licensing. Those who fail will be barred from the U.S. market. Who’s at risk: - Offshore giants (e.g., Tether/USDT): The largest stablecoin by far has operated largely outside U.S. jurisdiction. Without drastic restructuring, an official U.S. license (“Permitted Payment Stablecoin Issuer”), and full transparency over reserves, USDT faces elimination for U.S. users. - Crypto-collateralized and algorithmic stablecoins (e.g., DAI, USDe by Ethena, FRAX): The GENIUS Act mandates backing by low-risk fiat assets. Decentralized stablecoins backed by other cryptocurrencies (like Ethereum or Bitcoin) or maintaining their peg through complex algorithms and arbitrage typically cannot meet these stringent criteria. - Smaller foreign issuers: Projects unable or unwilling to afford the costly and complex registration process with U.S. authorities (such as the OCC or FDIC) will be forced to cease U.S. operations. Who benefits: U.S.-regulated providers like Circle (USDC) and PayPal (PYUSD). These companies already adhere to the required transparency standards, hold reserves in secure fiat assets, and are deeply integrated into the U.S. financial system. They are poised to capture significant market share as competitors are pushed out. What this means: A seismic shift in crypto liquidity is imminent. The law sharply divides the market into “Wall Street-compliant” and “unregulated.” For traditional finance, this is the long-awaited green light to enter the stablecoin space at scale. 🐺 Don’t miss a thing? Follow now!