Stablecoin Evolution: The GENIUS Act Shakes Up the Industry
The recently updated GENIUS Act is about to reshape the stablecoin market by encouraging issuers to concentrate on payment solutions slightly than yield-generating models. Fabian Dori, the chief investment officer at Sygnum, suggests this shift could redefine how stablecoins are used.
Regulation Bridges the Gap Between the US and Europe
Dori told Cointelegraph that the amendment to the GENIUS Act has effectively created a distinction between stablecoins designed for earning interest and people meant for payment purposes. This move aligns the U.S. regulatory framework more closely with the EU’s Markets in Crypto-Assets (MiCA) regulation, potentially paving the best way for a “global consensus.”
More than simply setting recent rules, the GENIUS Act provides much-needed clarity, in response to Dori. He believes this clarity will empower organizations and issuers to craft pioneering applications that not only fulfill current needs but additionally drive demand for entirely recent services, like modern payment solutions.
Market Giants and Their Strategic Moves
This newfound confidence appears to be fueling interest out there. Major players equivalent to Mastercard and PayPal are already laying the groundwork for compliant stablecoin usage. Meanwhile, corporations like Amazon and Walmart are exploring stablecoin applications in areas like payroll and international settlements.
Dori identified that for those searching for returns, tokenized money market funds offer a more suitable alternative. These funds maintain stable value and supply each day liquidity, with current yields of 4–5% in products backed by U.S. Treasury securities, all without confusing investment with utility.
Stablecoin Issuers Embrace Utility Over Yield
Following the restrictions on interest-bearing stablecoins, issuers are expected to capitalize on features like real-time settlement and low transaction costs, which integrate seamlessly into payment and trading systems, in response to Dori.
“Utility is now the main focus, outshining yield,” said Jason Lau, chief innovation officer at OKX. He explained that in a competitive environment, issuers are more likely to pursue modern approaches to foster adoption and explore recent use cases.
Lau added that the advantages of stablecoin settlement and cross-border efficiency are more likely to spur real-world commerce adoption. Interest from payment giants like PayPal and Stripe indicates that that is only the start.
Polygon Labs’ Perspective
Aishwary Gupta, global head of payment and fintech at Polygon Labs, shared that the transition toward utility-focused stablecoins was already underway before the GENIUS Act was passed. Gupta highlighted significant growth in payment-centric stablecoin use, with micropayment volume jumping 67% from February to June, reaching $110 million.
“Regulatory clarity is beneficial, but what truly matters is meeting genuine market demand. Payment use cases offer immediate utility and address real problems for users, particularly in cross-border transfers and daily commerce,” Gupta stated.
The Importance of Retail Adoption
Despite these changes, retail adoption stays crucial. “Consumer adoption is what truly drives the market, not just fintech innovations,” Dori emphasized, noting that user-friendly platforms will play a key role in integrating stablecoins into on a regular basis life.
Gupta echoed this sentiment, revealing that Polygon is specializing in constructing stablecoin infrastructure that supports real-world applications. This includes enabling sub-cent transaction fees for micropayments and scaling performance for enterprise-grade deployments able to processing over 100,000 transactions per second.
Polygon can also be witnessing growing momentum in retail and B2B payment integrations, currently collaborating with an organization operating 185 million phones across Africa to facilitate cross-border B2B payments.
“We have enterprises with 7-8 million wallets ready to go live,” Gupta noted. “Small payment volumes ($100-$1,000) on Polygon surged 190% to over $563 million from February to June. We anticipate this trend to continue accelerating.”
DeFi Protocols and Their Potential Benefits
Lau added that decentralized finance (DeFi) protocols might be amongst the largest beneficiaries of this regulatory clarity, as stablecoins already underpin significant on-chain activity. While there will likely be some emphasis on synthetic yields and governance tokens, the chance to deliver unique use cases will likely capture stablecoin demand.
A Legislative Milestone
Passed this month with overwhelming support, including over 300 House votes and backing from 102 Democrats, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act establishes the primary federal framework for stablecoins, marking a major legislative milestone within the industry.
