U.S. Senate Passes GENIUS Act Boosting Stablecoin Market by 20% to 30%

The GENIUS Act, which establishes a regulatory framework for stablecoins backed by U.S. Treasury reserves, has been passed by the U.S. Senate. This legislation aims to enhance trust, drive institutional adoption, and strengthen the global role of the U.S. dollar in the digital asset space.

Bitget’s CEO, Gracy Chen, has commented on the potential impact of the GENIUS Act on the stablecoin market. According to Chen, regulated stablecoins like USDC and USDT could see their market capitalizations grow by 20% to 30% annually under the new law. This growth is expected to be driven by increased trust and institutional adoption, as the regulatory clarity provided by the GENIUS Act is seen as a green light for institutions and a trust layer for investors.

The GENIUS Act requires stablecoin issuers to maintain reserves backed by U.S. Treasury securities, aiming to reduce risk, increase transparency, and tie digital assets more closely to the strength of the U.S. economy. This measure is expected to encourage wider adoption of regulated stablecoins and could lead to significant growth in the stablecoin market.

However, the new regulations may also create barriers for smaller stablecoin issuers. The reserve requirements mandated by the GENIUS Act could prove too costly for startups and niche stablecoin providers, potentially leading to industry consolidation. This could result in fewer but more compliant stablecoin issuers dominating the market.

The GENIUS Act was introduced by Senator Bill Hagerty and backed by bipartisan figures including Senators Cynthia Lummis and Kirsten Gillibrand. The legislation mandates that all stablecoin issuers maintain full reserves of liquid assets such as U.S. Treasury notes. Oversight will fall to the Federal Reserve for major issuers and the Office of the Comptroller of the Currency for smaller entities. The bill also includes anti-money laundering requirements and prohibits members of Congress and top executive officials from issuing stablecoins while in office.

The bill has now moved to the House of Representatives for further review, with President Trump urging lawmakers to pass it promptly to ensure continued U.S. leadership in digital assets. The passage of the GENIUS Act could ignite significant growth in the stablecoin market, potentially drawing in tech giants to launch their digital currencies after meeting specific risk management and privacy protections.