Stablecoin Market Projected to Reach $2 Trillion Following GENIUS Act Enactment

Washington D.C. – The U.S. stablecoin market is projected to expand significantly, potentially reaching $2 trillion by 2028, following President Donald Trump's signing of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) into law on July 18, 2025. The bipartisan legislation, which passed the Senate 68-30 and the House 308-122, establishes the first comprehensive federal regulatory framework for these digital assets.

The new law aims to bring stability and consumer protection to the rapidly growing stablecoin sector. As noted by crypto commentator "The Wolf Of All Streets" on social media, stablecoins are primarily a "tool" for financial transactions, "backed by U.S. Treasuries, powering global money flows," and are now poised for a "Cambrian explosion" under this new regulatory clarity. The Act defines a "payment stablecoin" as a digital asset designed for payment or settlement, redeemable for a fixed monetary value, and maintaining a stable peg.

A cornerstone of the GENIUS Act is the requirement for Permitted Payment Stablecoin Issuers (PPSIs) to maintain 1:1 reserve backing with highly liquid assets, such as U.S. dollars and short-term Treasury bills. Issuers must publicly disclose their redemption policies and provide monthly reports on reserve compositions, which are subject to examination by a registered public accounting firm and certification by executives. This measure aims to bolster transparency and user confidence.

Furthermore, the Act classifies PPSIs as financial institutions under the Bank Secrecy Act, mandating compliance with anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations. It also explicitly prohibits stablecoin issuers from paying interest or yield to holders, a provision intended to prevent speculative practices. In a significant move for regulatory clarity, the law removes payment stablecoins from the definitions of "security" or "commodity."

The passage of the GENIUS Act is widely seen as a major victory for the cryptocurrency industry, which has long advocated for a clear regulatory environment to foster mainstream adoption. Industry proponents believe the legislation will enhance stablecoins' credibility, making them more attractive for everyday payments and facilitating faster, lower-cost transactions. The increased demand for U.S. Treasuries to back stablecoin reserves could also impact the market for short-term government debt.

Despite broad support, critics, including some Democrats and consumer advocacy groups like Consumer Reports, have raised concerns that the law does not provide sufficient consumer protection and could allow large technology companies to engage in banking-like activities without facing the same stringent regulations as traditional banks. The Act is set to take effect either 18 months after its enactment or 120 days after primary federal regulators issue final implementing regulations, whichever comes later. Congress is now expected to focus on the Digital Asset Market Clarity Act, which aims to create a broader crypto framework.