Never underestimate the significance of the US stablecoin "Genius Act"

Author:0xTodd

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

Although the abbreviation is GENIUS Act, which is literally translated as the Genius Act, it is actually Guiding and Establishing National Innovation for US Stablecoins, which actually translates as "the national innovation that guides and builds a dollar stablecoin."

The proposal is very long, and there are a few highlights for you to summarize:

1. Mandatory 1:1 Full assets: scope includes cash, bank demand deposits, and short-term US Treasury bonds. At the same time, embezzlement and re-pled are strictly prohibited.

2. High-frequency information disclosure: release reserve reports at least once a month and introduce external audits.

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

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

5. Clearly defined as payment medium: The bill clearly defines stablecoins as a new type of payment medium, mainly bound by the banking regulatory system and not constrained by the securities or commodity regulatory system.

6. Recruiting existing stablecoins: The buffer period for 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 include compliance as soon as possible.

---Separation line--- After finishing the main article, I will talk about the significance of this matter with excitement.

Over the past few years, others have asked, what applications have you made in the Crypto industry in 16 years?

In the future, you can confidently talk to others - stablecoins.

First, clearing your concerns is the premise

Some people have once opposed the view that people's impression of stablecoins in the past was an opaque black box. It will be FUD every few months. Either Tether's assets are frozen or there are big holes in Circle.

In fact, if you think about it, Tether can easily earn billions of dollars a year by relying solely on the interest on those underlying government bonds. Circle also made a profit of US$1.7 billion last year.

This is just a profit from standing up. In terms of motivation, they have no motivation to do evil, but they are the ones who most desire compliance.

Now, this opaque black box will become a transparent white box.

In the past, the money that criticized Tether might have been frozen by the United States. Now it is directly put into the compliant custodian in the United States. It is easy to be relieved when it is disclosed frequently.

[Don't worry about running away] What a great advantage - I think all Crypto people understand.

Second, it is important to master the standards

Stablecoin was almost stolen by CBDC for a time. No matter which country, if there is a central bank digital currency, it is likely that it is not built on the blockchain, but at most it is built on the internal alliance chain of the central bank. To be honest, that thing has no meaning.

CBDC was the most popular time when stablecoins were the most dangerous.

If CBDC had been done back then, the current stablecoins would be infinitely suppressed to a dark corner, and blockchain could only play a minimizing role.

The remaining half-dead stablecoins even need to learn from the standards of central bank digital currency, and the standard voice is completely lost.

And now, stablecoins win (about).

Instead, everyone should learn the standard [blockchain + Token].

Nowadays, many blockchains have no meaningful applications, but they are just stablecoin transfers. For example, for Aptos, the only scenario I use Aptos 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 to use his wallet.

Let me add a breakdown. Now I think Ethereum is really forward-looking in promoting EIP-7702. While other chains are busy working on memes, thanks to Ethereum for sticking to account abstraction.

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

Register a wallet with social account

Payment of GAS in local currency

etc.

This gives future new users a lot of stablecoins, solving the last mile.

Third, deposits enter a new era

And once the stablecoins are supported by legislation, deposits and withdrawals will become easier.

Let's imagine a scene. There was no way to do it due to the gray attributes of stablecoins before, but after the bill was passed, many traditional brokerages could support stablecoins themselves. The money of US stock investors becomes stablecoins every minute, and then it is stuffed into Coinbase in one second. Do you believe it or not?

Let’s imagine another scene. If the Genius Act enters the House of Representatives and successfully completes the process, next, you will see:

Because the profits of this trading are too generous, the existing stablecoin leaders and new traditional giants have begun to promote their stablecoin products.

And a person outside the circle started using stablecoins because of these promotions. Then one day I found that since the wallet accounts have been created, is it very difficult to understand the Bitcoins in it?

Stablecoins are a huge Trojan horse. The moment you start using stablecoins, you have already entered the Crypto world with half your foot without realizing it.

Fourth, last

As a large reservoir for digesting US debt, although stablecoins cannot directly convert debt, they at least provide bullets for the secondary market of US debt. These functions are very important, and slowly, stablecoins become part of the body of the U.S. bond market. Therefore, once the United States passes legislation, it is impossible to turn back and cancel it after tasting this sweetness.

Moreover, we are also confident that stablecoins are indeed one of the great innovations in our industry. It is difficult for people who have used stablecoins to return to the traditional cash-banking system.

The bill cannot be returned, and the user cannot be returned. In the future, concerns will be cleared, standards will be mastered, and it seems that the era of the Great Deposit is about to be imminent.