Positioning for What’s Next: The GENIUS Act and the Future of Stablecoins
by amit sharma and beth haddock
Responsible Innovation: Legislating for What "Is"
The recent Senate passage of the GENIUS Act underscores a growing recognition in Washington that stablecoins are no longer theoretical instruments; they are operational components of the global financial system. As lawmakers turn increased attention to digital asset regulation, it is more important than ever that legislative frameworks reflect the current utility, safeguards, and evolving infrastructure of these technologically advanced products and services.
Responsible innovation means creating policy grounded in how technologies are functioning today—not in outdated assumptions or worst-case hypotheticals. In the case of stablecoins, this requires acknowledging both their practical use cases and the technical design and utility that can reinforce compliance, consumer protection, and market integrity. We must craft policy for what stablecoins are — a growing, demand-driven financial infrastructure — rather than what they may seem in isolated or bad-faith cases.
The infrastructure being built around stablecoins is foundational for both digital asset innovators and traditional financial institutions. As evidenced by the recent IPO of Circle (issuer of USDC) and the sustained global growth of numerous dollar-based stablecoins, the use case is no longer speculative: these instruments are already meeting real and growing demand, and are enabling efficient payments and liquidity for individuals and institutions worldwide. Stablecoins are becoming embedded in the global economy, and responsible innovation in this space is essential for economic stability.
Pending legislative efforts in the U.S. are further validated by the fact that 98% of global stablecoins are pegged by the US dollar with over 80% circulating outside of the United States. With more than $750B in stablecoin transactions last month alone, U.S. regulatory clarity reaffirms both the depth and breadth of American capital markets—and the enduring strength of one of the nation’s most effective economic exports: the U.S. dollar.
II. GENIUS Act: Where We Stand
This week, in a 68–30 vote, the Senate passed the GENIUS Act as amended. While the legislation must still advance through the House and be signed into law, its prospects are strong given current support. This represents an important step toward reaffirming U.S. leadership in shaping global digital finance standards and advancing payment stablecoins backed by the depth and liquidity of U.S. capital markets. As the process continues, bipartisan engagement remains essential. Lawmakers must understand that regions, such as Europe and Asia, have already enacted stablecoin regulations that prioritize responsible innovation and long-term growth.
The U.S. cannot afford to fall further behind. Without a clear and forward-thinking legal infrastructure, American influence over the future of global finance–and the guardrails on the use of its proprietary currency– will diminish, and the ability for non-U.S. activities to propagate dollar-backed financial transactions globally and outside of the purview of the U.S. The crypto ecosystem will continue to grow with or without the U.S., but its alignment with American values and security interests hinges on immediate legislative clarity. The U.S. dollar must adapt to digital formats like stablecoins to extend its global reach and support broader access to American markets and economic strength.
III. Three Reasons the GENIUS Act Serves U.S. Interests
Enables and Reinforces Responsible Innovation
Standards are necessary to ensure that all stablecoin issuers wherever domiciled are consistently held accountable to their users, protect against conflicts of interest, and build secure, fraud-resistant infrastructure. Regulation should foster trust while encouraging innovation, not stifle it. Regulation should be consistently applied and have clear expectations to ensure consumer protections and preserve financial system integrity. Regulators should recognize where and when new technology applications–such as DLT-enabled digital asset services– serve to modernize and open new economic opportunities while mitigating risks to which traditional and analog financial mechanisms remain vulnerable.Preserves Dollar Dominance in Globally Interconnected Digital Financial World
The U.S. dollar remains the backbone of the majority of stablecoins issued and transacted globally. Establishing sound legislation ensures this dominance is maintained in the digital realm, reinforcing American values like individual financial freedom, the depth and reach of the US dollar and its markets, and the ingenuity of U.S. innovation.Addresses True Systemic Risks, Not Outdated Paradigms
Effective legislation must focus on modern risks: cybersecurity, fraud, AI-driven threats, and resilience in crisis scenarios. The post-9/11 AML framework to protect against illicit finance, while still relevant, must evolve to enable digitally native services and take advantage of the inherent risk mitigating tools that blockchain-enabled infrastructure bring. Importantly, the underlying technology attributes that make stablecoins possible (e.g. immutability of ledgers, transparency of transactions, decentralization of sensitive personal and financial data) indeed serve to ‘embed’ essential compliance controls in the financial system that, to date, have continued to be vulnerabilities in traditional banking and payments. Legislators should continue to collaborate with Web3 experts to understand and encourage digital identity systems and infrastructure that serve these goals and create a more secure and transparent financial service ecosystem that equally protects against potential illicit activity while enabling safe and secure access to essential products and services. Regulators should not rely solely on antiquated Web2-era compliance models that have failed to prevent data breaches, protect consumers, and effectively combat illicit financial activities. Financial services are now inherently cross-border, digitally-native and peer-to-peer – our risk and compliance management systems must now evolve to meet this new reality.
The GENIUS Act presents a timely opportunity to ensure that the growth of stablecoins aligns with the long-term interests of the United States and the integrity of its financial system. With global momentum accelerating, U.S. policymakers have a narrowing window to lead. The moment to act with clarity and purpose is now.
