GENIUS Act Will Be A New Era For Stablecoins, Its Significance Will Be Very Great

If the US stablecoin bill "GENIUS Act" is successfully passed, its significance will be very great. I even think it is enough to enter the top five in Crypto history.

The GENIUS Act, which stands for Guiding and Establishing National Innovation for US Stablecoins, is a significant bill that could revolutionize the digital asset landscape.

It is an abbreviation for Genius Act, which is a playful take on the bill's full name.

The proposal, which is being rapidly advanced by the House of Representatives, is very long, but here are a few highlights:

* Mandatory 1:1 sufficient assets: including cash, bank current deposits, and short-term U.S. Treasury bonds. At the same time, misappropriation and re-pledge are strictly prohibited.

* High-frequency information disclosure: Publish a reserve report at least once a month and introduce external audits.

* Issuance of licenses: Once the issuer's stablecoin circulation market value is > US$10 billion, it must be transferred to the federal regulatory system within the prescribed period and adopt banking-level supervision.

* Introduction of custody: The custodian of stablecoins and their reserve assets must be a regulated qualified financial institution.

* Clearly defined as a medium of payment: The bill clearly defines stablecoins as a new type of payment medium, which is primarily subject to the banking regulatory system rather than the securities or commodity regulatory system.

* Recruiting existing stablecoins: The buffer period of up to 18 months after the bill comes into effect is intended to urge issuers of existing stablecoins (such as USDT, USDC, etc.) to obtain licenses or become compliant as soon as possible.

Now that I have finished the main story, I will take this opportunity to talk about the significance of this matter in an excited mood.

Over the past few years, people have asked, what applications have you developed in the 16 years of the Crypto industry? From now on you can confidently tell others about stablecoins.

First, clearing away concerns is a prerequisite

Some people have held opposing views. In the past, people had the impression that stablecoins were opaque black boxes. FUD would occur every few months, either because Tether’s assets were frozen or because Circle had a big deficit.

In fact, if you think about it, Tether easily earns billions of dollars a year just from the interest on the underlying government bonds. Circle made a profit of $1.7 billion last year. They can make money without any effort. Motivated by this, they have no motive to do anything evil. On the contrary, they are the most eager to comply with regulations.

Now, this opaque black box will become a transparent white box. In the past, people simply criticized Tether for having its money frozen by the United States. Now, it has been directly placed in a compliant U.S. custodian institution with high-frequency information disclosure, so people can rest assured.

[No need to worry about running away] is such a huge advantage - I think all Crypto people understand it.

Second, it is important to master the standards

Stablecoins were almost stolen by CBDC. No matter which country, if there is a central bank digital currency, it is most likely not built on the blockchain, but at most on some internal alliance chain of the central bank, which is meaningless to be honest.

When CBDC was at its hottest, it was also the most dangerous time for stablecoins. If CBDC had been successful back then, the current stablecoins would have been infinitely suppressed into a dark corner, and blockchain would only play a minimal role. The remaining half-dead stablecoins even have to learn the standards of the central bank’s digital currency, and the right to speak on the standards is completely lost.

And now, stablecoins are winning (soon). Instead, everyone should learn the [Blockchain + Token] standard. Many blockchains now have no meaningful applications, except for stablecoin transfers. For example, Aptos, the only scenario I use Aptains is to transfer from Binance to OKX.

And now, stablecoins will be legislated, what does it mean? That’s right, blockchain will become the only standard. In the future, every stablecoin user must first learn how to use a wallet.

As an aside, I now think that Ethereum’s push for EIP-7702 is really forward-looking. While other chains are flocking to memes, I am grateful that Ethereum is still sticking to account abstraction.

EIP-7702 is account abstraction, which can support, for example:

* Register a wallet using a social account

* Use local currency to pay GAS

...etc.

This will enable new users to use stablecoins in large quantities in the future, solving the last mile problem.

Third, deposits enter a new era

And once stablecoins are supported by legislation, deposits and withdrawals will become easier. Let’s imagine a scenario. Previously, due to the gray nature of stablecoins, there was no way to do it. But after the bill is passed