EDITORIAL | The GENIUS Act Could Redefine Stablecoins – And Trigger a New Wave of Players

By BitKE Editorial

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) is the most comprehensive stablecoin legislation ever introduced in the United States. Passed in a landmark Senate vote and now headed for full legislative debate, the bill aims to establish a legal framework for “payment stablecoins” — dollar-pegged digital assets designed for real-world commerce, settlements, and remittances.

Key provisions include:

* 1:1 Reserves: All stablecoins must be fully backed by U.S. cash or short-term Treasury securities.

• Transparency: Monthly disclosures and annual audits (mandatory for issuers holding over $50 billion).
• Two-Tier Licensing: Federal oversight (via the Fed and OCC) for large issuers, and state-level regulation for smaller or emerging players.
• No Algo-Stables: Algorithmic or unbacked stablecoins are outright banned.
• AML Compliance: Issuers must follow existing anti-money laundering and counter-terrorism laws.
• Consumer Protections: Clear marketing rules and bankruptcy preferences for stablecoin holders.

What Does the GENIUS Act Say?

The draft legislation from the Senate includes several significant provisions. The current version of the GENIUS Act – likely its final form – features a clause targeting large publicly listed non-financial firms, which would include companies like Amazon and Walmart.

To be authorized to issue a stablecoin, a company must first be approved by a committee composed of the Chairs of the Federal Reserve and the FDIC, along with the Secretary of the Treasury. This committee must determine that the issuer does not pose a material risk to financial stability. Additionally, the company must commit to not using payments data for unrelated purposes, such as targeted advertising or selling it to third parties. The issuer is also prohibited from engaging in “tying” – leveraging dominance in one area of business to compel the use of another product or service, such as its own stablecoin.

This clause in the GENIUS Act was recently broadened to include large publicly traded firms headquartered outside the U.S. Furthermore, the committee is required to issue rules clarifying how this provision will be implemented within one year of the Act becoming law.

Traditionally, banking regulations have blocked non-financial companies from owning banks due to potential conflicts of interest. Some argue that this concern is less relevant in the case of stablecoins, which do not involve credit issuance. Earlier versions of House legislation had imposed ownership limits (such as a 24.9% cap), but the current House STABLE Act draft does not include those restrictions.

Opposition to corporate-issued stablecoins is not limited to Democrats. For instance, Republican Senator Josh Hawley has proposed an amendment to the GENIUS Act that would prevent social media platforms, search engines, communication services, and e-commerce marketplaces with over 25 million users from issuing a stablecoin. This could restrict Amazon but may not apply to Walmart, as it operates primarily as a retailer rather than a digital marketplace.

Why It Matters: A New Era for Stablecoins

The stablecoin sector has ballooned into a $160+ billion market globally – but in the U.S., regulatory uncertainty has kept both traditional finance and Big Tech at bay.

The GENIUS Act changes that.

“This bill gives legal legitimacy to stablecoins, which are fast becoming the rails of modern finance,” says a D.C. fintech policy analyst. “It’s like the Bitcoin ETF moment, but for stable payments.”

By introducing guardrails and clarity, the bill is expected to:

• Accelerate institutional adoption
• Invite tech giants and legacy payment firms
• Bring stablecoins closer to global regulatory parity

Who Might Enter the Market?

With clear legal pathways and compliance rules, the door is now open for a diverse range of stablecoin issuers:

✅ Big Tech – Reports suggest Amazon, Walmart, Meta, and even Expedia are exploring branded stablecoins for payments, loyalty programs, and marketplace efficiency. Think: AmazonCoin or MetaDollar.

✅ Traditional Banks – Banks like JPMorgan (JPM Coin) and Bank of America may launch digital settlement tokens for interbank use and corporate clients.

✅ Card Networks & Fintechs – Players like VISA and Mastercard could create blockchain-native rails for cross-border transactions. Meanwhile, PayPal’s PYUSD, already crossing $1 billion in circulation, would likely thrive under the new regime.

✅ Remittance & Payroll Innovators – Startups serving freelancers and remote workers (e.g., Deel, Bitwage) could adopt stablecoins to power global salary payments, reducing costs and settlement times.

Who Gets Left Out?

Not all players are cheering.

• Banks worry that tech firms will bypass traditional rails.
• Consumer advocates fear stablecoins could blur the line between commerce and finance.
• Smaller crypto projects may struggle with the compliance burden, especially audit and AML obligations.

Senator Elizabeth Warren has already proposed amendments to exclude Big Tech from becoming financial entities through stablecoin issuance.

The GENIUS Act is more than a policy document – it’s a gateway. If enacted, it could reshape how money moves online, empower new players, and force traditional financial systems to evolve or risk obsolescence.

And with Africa rapidly embracing stablecoins as cross-border tools, the global ripple effects of U.S. regulation will be felt far beyond Washington.

As U.S.-regulated stablecoins become safer and more interoperable, African fintechs, wallets, and cross-border platforms could benefit from:

• Lower risk of deplatforming
• Interoperable rails with global banks
• Greater user trust and merchant adoption

Stay with BitKE for the latest on global crypto updates:

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