The recent approval of the GENIUS Act in the US signals a pivotal moment for stablecoins, establishing regulatory standards that could influence the global digital finance landscape.
Fabian Dori, Chief Investment Officer at Sygnum Bank, shared his expert analysis on Cointelegraph’s Byte-Sized Insight podcast. He explained how this legislative framework will affect stablecoin adoption, boost institutional participation, and pave the way for international alignment on crypto regulations.
The GENIUS Act introduces a comprehensive federal regulatory structure for fiat-backed stablecoins. It mandates full transparency from issuers, including one-to-one asset backing, a required federal license, and independent audits of reserves.
Dori emphasized that these requirements are critical for fostering responsible innovation and ensuring financial stability within the market.
According to Dori, the GENIUS Act’s impact will be profound both immediately and in the long run, reassuring institutional investors by providing legal certainty through regulated, fully backed stablecoins.
However, the act includes a contentious provision banning yield-bearing stablecoins. This could fundamentally change the role stablecoins play in decentralized finance (DeFi) ecosystems.
This development may distinctly separate payment-oriented stablecoins from tokenized money market products that generate yield, clarifying market roles in the crypto space.
Dori noted that holders of fiat-backed stablecoins will no longer earn direct yields, marking a clear distinction between non-yielding stablecoins and tokenized money market funds.
Looking at international perspectives, Dori highlighted regulatory differences between Europe and the US.
Europe’s cautious regulatory approach, especially concerning digital currencies like the digital euro, contrasts with the US’s innovation-driven framework. The GENIUS Act may accelerate new issuers and use cases in the US, potentially compelling Europe to reconsider its regulatory stance to remain competitive.
Dori summarized that the act is likely to draw both new stablecoin issuers and innovative use cases to the US market, possibly prompting Europe’s regulatory evolution.
For the full expert interview, listeners can access the Byte-Sized Insight episode on Cointelegraph’s Podcasts page, Apple Podcasts, or Spotify. Additionally, Cointelegraph offers a diverse podcast lineup for further insights.
