The GENIUS Act is not a conspiracy; it is not only a cunning plan but a synthetic strategy of institutional response + financial reconstruction + self-rescue of the dollar. It indeed aims to maintain the dominance of the dollar; but more critically, it attempts to establish order and firmly grasp that order amid an irreversible wave of technology. This game has just begun.
On May 20, the U.S. Senate passed a stablecoin bill, referred to as the GENIUS Act.
This bill officially incorporates dollar stablecoins into the federal regulatory framework. In other words, stablecoins, which originally wandered in a gray area of crypto finance, have finally embarked on a compliant path.
This should be a significant event, both for the crypto industry and for the global financial order.
However, interpretations in the market are exceptionally divided:
Some say: This is a new tool for digital colonialism of the dollar, a form of American financial imperialism.
Others say: This is America seeking new avenues out of the debt crisis, using on-chain dollars to siphon global liquidity.
These voices are not without reason, but we cannot ignore a fundamental fact:
Stablecoins are not an accidental product; they are a naturally grown demand in the crypto world.
- The Past and Present of Stablecoins
The earliest stablecoin, USDT, appeared in 2014. Its birth was to address two issues:
Cryptocurrency volatility is too high to be used as money;
Banks are unwilling to provide services to the crypto industry.
Thus, people created "tokens" pegged to the dollar to stabilize settlements. Initially, it was just a small tool between exchanges and users, but soon, stablecoins became the "base currency" on the chain.
Why? The advantages are too obvious:
A cross-border payment marvel: Much faster than SWIFT, almost instant, with low fees.
A hedge tool for inflationary countries: Users in Argentina, Turkey, and Africa use it to preserve assets, remit money, and receive salaries.
The infrastructure for DeFi: Lending, staking, and LPs cannot function without stablecoins.
As of now, the total amount of stablecoins in circulation has exceeded $250 billion, with over 90% pegged to the dollar. It can be said:
The dollar has long been on-chain, and now, it has finally begun to embrace the on-chain world.
- Why Must Stablecoins Be Regulated?
Stablecoins have grown too large but have long lacked regulation, accumulating significant risks:
USDT accounts for 61%, but its reserve transparency has always been in doubt. In 2021, Tether was found to have misappropriated $700 million in reserves and was fined $18.5 million;
USDC accounts for 24%, and while it is more transparent, it is severely centralized and can freeze accounts. During the 2023 Silicon Valley Bank incident, USDC depegged to $0.87;
Not to mention during the 2022 LUNA crash, UST went from $18 billion directly to zero.
With such a large scale and no legal constraints, who would dare to use it with confidence? Who would dare to invest? Regulation is only a matter of time.
- The Five Core Provisions of the GENIUS Act
Let’s look at the core content of this legislation:
Reserve requirements: The reserve assets of stablecoins must be real and equivalent, primarily cash and U.S. Treasury bonds;
Interest prohibition: Stablecoins cannot pay interest to users to avoid conflicts with banking operations;
Information transparency: Issuers must conduct regular audits and disclose data;
Anti-money laundering requirements: Compliance with KYC/AML and cooperation with national security;
User protection: In the event of issuer bankruptcy, users have priority claim rights.
These regulations may seem restrictive, but they actually open the door for stablecoins to enter mainstream finance.
- What Are the Implications? The Outcome Is Undecided
This legislation may have far-reaching implications:
For users:
More peace of mind and transparency. You can finally confirm whether the stablecoins in your hands are backed by real assets, have audits, and have legal protections.
For institutions:
More willingness for large funds to enter the market; the "funding pipeline" for the crypto market has finally been legalized, bridging traditional finance and the on-chain world.
For the industry:
This is the "national recognition" of on-chain dollars, marking the first time blockchain technology has entered the financial mainstream as a sovereign asset.
For the dollar:
This is a new upgrade of the dollar into the digital age, a new weapon for the dollar's monetary export. Beyond the Federal Reserve, the strongest grassroots smuggling team for the dollar.
- This Is Not a Conspiracy; This Is Capability
Many interpret this regulatory legislation as a conspiracy of "dollar hegemony," but if we look at it from an industrial logic perspective:
This is a national institutional response to the changes of the times.
Stablecoins were not designed by any individual but are an inevitable tool born from the on-chain ecosystem.
They will eventually be regulated; whoever regulates first will have the power to set the rules. And this time, the U.S. chose to:
Embrace it,
Regulate it,
Incorporate it into the dollar system.
This is not a conspiracy; this is execution power.
Instead of questioning "why is America so smart," it is better to ask:
"Why don't we have this execution power?"
- In Summary
The GENIUS Act is not a conspiracy; it is not only a cunning plan but a synthetic strategy of institutional response + financial reconstruction + self-rescue of the dollar.
It indeed aims to maintain the dominance of the dollar;
But more critically, it attempts to establish order and firmly grasp that order amid an irreversible wave of technology.
This game has just begun.
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