The $250 Billion Stablecoin Showdown: What’s Next?

The GENIUS Act is now law, and it's shaking up the world of stablecoins. This new rule means stablecoins will face stricter regulations, and the battle over how these rules are applied is just getting started.

A Two-Year Fight Over $250 Billion

The act sets the stage for a two-year fight over how $250 billion in stablecoins will be handled. The main question is whether these digital coins will be controlled by banks or move offshore. At the same time, Bitcoin and Ethereum could either benefit or get left behind.

Interest and Affiliates: A Key Issue

One key issue is whether stablecoin issuers can offer interest through affiliates. If regulators block this, stablecoins could become less attractive than traditional bank deposits. The fight over these rules will decide the future of stablecoins.

Payment Stablecoins: A New Category

The GENIUS Act creates a new category called "payment stablecoins", which must be issued by regulated entities. This means stablecoins will either be wrapped in bank-like structures or pushed offshore. The act also sets a timeline: by mid-2028, US platforms will only be able to offer stablecoins from approved issuers.

Winners and Losers

The winners and losers are already clear. Big US banks and regulated stablecoin issuers will benefit, while offshore issuers and smaller players will struggle. Ethereum could also gain as the preferred platform for regulated stablecoins, while Bitcoin stands out as a censorship-resistant alternative.

The Critical Years Ahead

The next few years will be critical. From now until mid-2026, issuers and banks will lobby for favorable rules. By 2027, the final rules will be in place, and by 2028, the market will adjust. The outcome will shape the future of stablecoins, DeFi, and the broader crypto market.