BlackRock Backs GENIUS Act as Stablecoin Market Surges 4.9%

BlackRock has thrown its weight behind the newly enacted GENIUS Act, a U.S. law that aims to bring long-awaited clarity to stablecoin regulation. The legislation, formally titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act, was signed into law in July 2025 and marks the first federal framework specifically designed for stablecoins. It mandates that payment-focused stablecoins be fully backed by U.S. dollars or short-term Treasuries, require monthly audits, limit issuance to licensed institutions, and ban algorithmic stablecoins for two years. These measures have been widely seen as a critical step in transforming stablecoins from speculative assets into reliable, real-world payment tools [1].

Larry Fink, CEO of BlackRock, emphasized the transformative potential of the law, stating that it represents “the next generation for markets.” BlackRock, which manages the Circle Reserve Fund that underpins much of USDC, has already positioned itself at the center of this transition. The firm sees stablecoins as digital dollars that can be used in everyday transactions, from paying bills to buying coffee, much like cash or credit cards [1]. The firm’s involvement signals a shift where stablecoins are no longer confined to the crypto ecosystem but are being integrated into mainstream financial infrastructure.

The impact of the GENIUS Act became evident almost immediately after its passage. According to data from CoinGecko, the market cap of USDC, one of the largest dollar-backed stablecoins, surged from approximately $61 billion to over $64 billion within days. This $3 billion increase reflects growing institutional and public confidence in stablecoins as a safe and regulated asset class [1]. Major financial institutions, including JPMorgan and PayPal, have also begun developing their own stablecoins under the new regulatory framework, further reinforcing the act’s role in legitimizing the asset class.

Industry analysts and crypto experts have echoed the sentiment that the GENIUS Act represents a significant turning point. a16z Crypto firm noted that the law provides “clarity for stablecoins and sets us on a path toward broader crypto market structure reforms.” The act’s structured approach to regulation, they argue, removes legal ambiguity and provides a foundation for responsible innovation [1]. Additionally, analysts have pointed out that by establishing clear rules, the legislation encourages traditional financial institutions to engage with stablecoins, bringing much-needed trust and transparency to the sector [1].

The act’s provisions include specific requirements for stablecoin issuance and use. For instance, stablecoins must maintain a 1:1 backing with cash or short-term government securities. Issuers must publish monthly, verified audits and are restricted to licensed institutions. Misleading claims, such as FDIC insurance labels, are strictly prohibited. Algorithmic stablecoins, which rely on complex mechanisms rather than tangible reserves, are banned for the next two years [1]. These measures collectively aim to prevent the instability that has plagued past stablecoin models and to ensure user confidence.

The broader implications of the GENIUS Act extend beyond just regulation. It signals a maturing of the stablecoin market, where digital assets are no longer treated as fringe innovations but as legitimate components of the financial ecosystem. With institutions like BlackRock actively participating in and supporting this transition, the path toward widespread adoption of stablecoins in everyday commerce appears more viable. The law’s success will depend on how well it balances innovation with oversight, and whether it can sustain the momentum it has generated thus far.

As the U.S. becomes a global leader in stablecoin regulation, the GENIUS Act could serve as a model for other countries seeking to integrate digital assets into their financial systems. The act’s emphasis on transparency, accountability, and institutional participation sets a high bar for regulatory clarity, potentially reducing the risks associated with stablecoins while enhancing their utility. In doing so, it paves the way for a future where digital money is not just an option but a standard in the global financial landscape.

Source: [1] The GENIUS Act Flips the Stablecoin Regulation Game (https://thebitjournal.com/genius-act-flips-stablecoin-regulation/)