Stablecoins to Evolve Into ‘Money Rail of Internet’ Once GENIUS Act Is Passed: Bernstein
The U.S. Senate is poised to vote this week on the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), a landmark piece of legislation shaping the future of stablecoins. Wall Street broker Bernstein anticipates its passage within the next few months, predicting a significant shift in the role of stablecoins within the global financial landscape.
Currently, stablecoins—cryptocurrencies pegged to assets like the U.S. dollar or gold—serve as a crucial payment infrastructure within cryptocurrency markets and facilitate international money transfers. The GENIUS Act aims to propel stablecoins beyond their current function, envisioning them as the primary payment rail of the internet. This transformation is expected to significantly increase mainstream adoption, expanding their use beyond settling digital asset transactions.
The act introduces federal oversight for stablecoins exceeding a $10 billion market capitalization, allowing for state-level regulation that aligns with federal guidelines. This regulatory framework is designed to encourage innovation while mitigating risks. The bill categorizes stablecoins as digital cash, explicitly aiming to broaden their utility for everyday payments.
A key provision of the GENIUS Act restricts non-financial public companies from becoming stablecoin issuers. This effectively prevents large corporations like Amazon and Walmart, which have reportedly explored using stablecoins, from issuing their own. Instead, these companies will likely collaborate with established, U.S.-regulated issuers to integrate stablecoins into their platforms. This fosters a more controlled environment, prioritizing established financial institutions and enhancing regulatory compliance. The act’s strategic approach prioritizes bringing stablecoin innovation back to the United States, providing a competitive advantage to domestically regulated issuers. Bernstein’s analysis suggests that the GENIUS Act will pave the way for widespread stablecoin adoption, transforming the internet’s payment infrastructure and accelerating their integration into mainstream commerce. The firm projects significant growth in stablecoin usage starting in 2025, following the anticipated regulatory clarity provided by the act.
