A new piece of U.S. legislation, the GENIUS Act, could solidify the US dollar’s leadership in the global Web3 and stablecoin market, according to a recent report by Foresight Ventures.
What is the GENIUS Act?
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act sets out to create a regulatory framework for stablecoins in the United States. It focuses on:
- 1:1 backing of stablecoins to the US dollar
- Strict compliance with Anti-Money Laundering (AML) laws
- Restrictions on the use of reserve assets
“This bill would reinforce the dollar’s status as the world’s digital settlement currency,” said Zac Tsui, Investment Director at Foresight Ventures.
Key Provisions of the Bill
The GENIUS Act mandates that stablecoins be fully collateralized, meaning each dollar-pegged token must be backed by one U.S. dollar. This ensures transparency and eliminates the risk of fractional reserves or over-leveraging.
Reserve assets must be held in safe, low-risk instruments like U.S. Treasury repos, preventing misuse and avoiding shadow banking risks.
The bill prohibits reserve funds from being used for lending, investing, or re-hypothecation, making stablecoin platforms safer and more trustworthy.
Legislative Progress
The bill cleared a procedural vote in the Senate on May 20, 2025, by a 66–32 margin. While this is a significant milestone, a full Senate vote is still pending.
Some Democrats have expressed concerns about the bill’s structure, delaying broader bipartisan consensus.
Global Impact: Setting the Tone for Crypto Regulations
Many believe the GENIUS Act could become a blueprint for global crypto regulation.
“When the U.S. moves on stablecoin policy, the world watches,” noted Andrei Grachev from DWF Labs.
The Act could influence other nations to adopt similar compliance standards, promoting safer innovation in the crypto industry.
More Than Just a Bill
The GENIUS Act is not just legislation—it’s a catalyst for reshaping how the US dollar operates in a digital world. By offering regulatory clarity and encouraging compliance-first innovation, the bill may ensure continued USD dominance in Web3 and reduce global financial risk.