The U.S. stablecoin market is set for significant expansion following the recent passage of the GENIUS Act, according to a report from a major U.S. bank. The stablecoin supply could increase by as much as $75 billion in the short term, driven by regulatory clarity, new financial products, and wider adoption by financial institutions.
GENIUS Act Sparks New Era for Stablecoin Regulation
Signed into law by President Donald Trump last Friday, the GENIUS Act introduces the first major regulatory framework for U.S.-based stablecoins. It is designed to give clear legal status to tokenized dollars and other asset-backed crypto instruments.
This legislation sets the stage for banks to enter the stablecoin market and enables institutional investors to participate with greater confidence.
In parallel, the CLARITY Act, which further defines the status of digital assets as securities or commodities, is also advancing through Congress.
Stablecoin Market Set to Surge
According to the bank’s projections, the total stablecoin supply could rise by $25–$75 billion in the near term. The current market cap of all stablecoins stands at around $270 billion, based on recent market data.
The report highlights that increased issuance by traditional banks, particularly through consortium-led stablecoin models, will be a key growth driver.
Bank of America’s CEO confirmed preparations to launch its own stablecoin offering when market conditions allow.
Institutional Demand and Tokenization on the Rise
Tokenized deposits and money market funds are expected to see rapid development, especially as financial institutions invest in new infrastructure following the GENIUS Act. This could lead to an increase in on-chain money movement, including cross-border settlements and liquidity flows.
However, the report also notes that bank executives do not expect immediate disruption to domestic payments, despite the momentum behind blockchain-based alternatives.
Impact on U.S. Treasury Market
Another key outcome of stablecoin expansion is its impact on the U.S. Treasury market. Because stablecoins are typically backed by short-term government securities, demand for these assets may rise sharply.
The Treasury Department may need to adjust issuance patterns toward short-term bills to meet the needs of stablecoin issuers and custodians.
Conclusion
With the GENIUS Act now law, the U.S. stablecoin market is entering a phase of measured institutional growth, supported by regulation, infrastructure investment, and rising demand for tokenized financial instruments.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.