Is the U in your hands still safe? The US set a "new rule" this week

If you are an experienced player in the crypto world or a newcomer just trying to set up digital assets, there is a major news story this week that may seem boring but actually concerns everyone’s “wallet”—and you must know about it.

This week (early December), US federal banking regulators finally took significant action—they began drafting specific “implementation guidelines” (proposed rules) for the “GENIUS Act” signed in July this year.

Don’t be intimidated by these lofty terms. Simply put, it’s like the country not only announced the “start of exams” but also issued the “syllabus” and “grading standards.”

What does this mean for ordinary people holding stablecoins (like USDT, USDC)? Is it good news or bad news?

Say goodbye to “air coins,” must 1:1 compensate

In the past, what was everyone most afraid of with stablecoins? The biggest fear was that the issuing company would “collapse suddenly.”

If you hold 100 U, in theory, it should correspond to 100 USD in the bank. But due to lack of regulation in the past, some companies might have only stored 50 USD, and the remaining 50 USD was used to buy high-risk financial products. If those investments lost money, your U could become worthless (remember the Luna/UST disaster back then?).

The core of the “new rules” being implemented this week is: reject “free money without backing.”

According to the proposed new rules, compliant stablecoin issuers must maintain 1:1 asset reserves. That is, for every dollar of coins issued, there must be a real dollar in cash or highly liquid government bonds in the vault.

Impact on ordinary people: In the future, buying U will no longer be a cause for worry about “de-pegging.” As long as the coin is on the compliant list, its safety will be virtually equivalent to holding USD cash.

“Official institutions” enter the scene, bidding farewell to the wild west era

This regulatory implementation also signals a deeper message: banks are entering.

In the past, traditional financial giants like JPMorgan Chase and Citibank looked at the lucrative crypto market with envy but dared not enter due to unclear policies.

Now, with clear rules in place, it’s like the starting gun has fired. Banks and large financial institutions can finally issue their own stablecoins legally or provide custody services for existing stablecoins.

Imagine that in the future, your transfers might not be using a coin from a tech company but “Chase Coin” or “Citi Coin,” backed by a century-old bank’s credit.

Market impact: This is seen as the “foundation” for the next bull market. Only when the capital channels are secure will the hundreds of trillions of traditional funds outside the market dare to truly flow into the Web3 world.

The “end of algorithmic stablecoins”?

Everything has pros and cons. These rules are not only a “safety net” but also a “constraint.”

The regulations explicitly emphasize strict restrictions (or even bans) on “algorithmic stablecoins.” Those that do not rely on real reserves but maintain their price purely through code and mathematical models will find it difficult to survive in the US market.

If you still hold such “high-risk, high-reward” algorithmic stablecoins, the current advice is: beware of risks and take profits when you can.

How should retail investors respond to regulatory implementation?

Although we are across the ocean, USD stablecoins remain the “hard currency” in the current crypto market. The implementation of US regulations signals that the industry is moving from the “Wild West” to a “civilized city.”

For ordinary investors, I have two small suggestions:

Focus on compliance: When choosing platforms and coins in the future, prioritize those embracing regulation and with transparent reserves (like USDC).

Be patient: The entry of official institutions won’t double coin prices overnight, but it will bring longer-lasting and more stable liquidity.

The “warm winter” in the crypto market may be hidden in these seemingly boring legal texts. $USTC **$TUSD **$USDC