The GENIUS Act Will Become a Catalyst for a New Bull Market?

The sentiment in the crypto market is once again focused on regulatory actions.

Author: Deep Tide TechFlow

The sentiment in the crypto market is once again being driven by regulatory actions.

On Friday, the U.S. Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025) with a procedural vote of 66-32. This marks a significant step toward establishing a regulatory framework for stablecoins in the U.S..

As the first comprehensive federal regulatory bill for stablecoins in the U.S., the rapid progress of the GENIUS Act has sparked enthusiasm in the crypto market, with DeFi and RWA sectors related to stablecoins leading today's market.

Will the GENIUS Act become a catalyst for a new bull market?

According to Citibank's predictions, the global stablecoin market size is expected to reach $1.6 to $3.7 trillion by 2030. The passage of the bill provides a qualitative and developmental space for stablecoins to be "compliant," giving traditional companies a more reasonable justification for entry.

The market is also anticipating the influx of new capital bringing "flood irrigation," injecting new liquidity into related crypto assets.

But before that, you should at least understand what this bill is about and the legislative motives in a broader context, to provide more convincing reasons for selecting related crypto assets.

From "Barbaric Growth" to Standardization

The GENIUS Act, which stands for the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, is a legislative document from the U.S. government.

It is the first comprehensive federal regulatory bill for stablecoins in the U.S., and its goal is to provide legitimacy and security for the stablecoin market through a clear regulatory framework, while consolidating the U.S. dollar's dominant position in digital finance.

In brief, the key contents of the bill are:

- Reserve Requirements: Stablecoin issuers must maintain 100% reserve backing, with reserve assets required to be high-liquidity assets such as U.S. dollars and short-term U.S. Treasury securities, and they must disclose the composition of reserves monthly.

- Regulatory Tiering: Large issuers with a market capitalization exceeding $10 billion (like Tether and Circle) will be directly regulated by the Federal Reserve or the Office of the Comptroller of the Currency (OCC), while smaller issuers may be regulated by states.

- Transparency and Compliance: Misleading marketing (such as claiming stablecoins are backed by the U.S. government) is prohibited, and issuers must comply with anti-money laundering (AML) and know your customer (KYC) regulations. Issuers with a market capitalization over $50 billion will undergo annual audits of financial statements to ensure transparency.

This shows that the U.S. attitude towards stablecoins is positive, but it comes with the condition that stablecoins must be backed by the U.S. dollar and meet transparency requirements.

Looking back at history, the birth of the GENIUS Act was not a sudden event but rather a culmination of years of exploration into stablecoin regulation in the U.S. We have also quickly outlined the full timeline of this bill to help you better understand its background and motives:

The rapid development of the stablecoin market has highlighted the risks caused by a lack of regulation, such as the collapse of the algorithmic stablecoin UST in 2022, which underscored the need for clear legislation.

As early as 2023, the House Financial Services Committee proposed the STABLE Act, attempting to establish a regulatory framework for stablecoins, but it failed to pass in the Senate due to bipartisan disagreements;

On February 4, 2025, Senator Bill Hagerty, along with bipartisan members Kirsten Gillibrand and Cynthia Lummis, formally proposed the GENIUS Act, aiming to balance innovation and regulation. On March 13, the bill passed the Senate Banking Committee with an 18-6 vote, demonstrating strong bipartisan support.

However, the first full vote on May 8 failed to reach the 60-vote threshold (48-49), with some Democratic senators (like Elizabeth Warren) expressing concerns that the bill might benefit crypto projects linked to the Trump family (such as the USD1 stablecoin), citing potential conflicts of interest.

After revisions, the bill added restrictions on large tech companies, alleviating some lawmakers' concerns about conflicts of interest, and ultimately passed the procedural vote on May 19 with a vote of 66-32, and is expected to soon pass the full Senate vote by a simple majority.

So, what is the significance of the legislation reaching this point?

First, the market desires certainty. The passage of the bill essentially marks the transition of the U.S. stablecoin market from "barbaric growth" to standardization, filling a long-standing regulatory void and