In response to the regulatory momentum that appears poised to reshape the future of digital assets in America, crypto markets have soared to an all-time-high, surpassing $4 trillion for the first time.
The long-awaited policy framework could signal a brand-new era for crypto in the U.S., or at least for stablecoins, the dollar-pegged tokenized assets that the GENIUS Act was written to regulate. The GENIUS Act represents a win for the administration on a political level, as well as a potential victory for the Trump family itself on a business level due to the various crypto interests of Trump’s family members, which include stablecoins.
It may have passed with the support of 206 Republicans and 102 Democrats, but the GENIUS Act’s path through “Crypto Week” was not without friction and compromise. Of particular note, several of the Republicans who voted to halt the progress of the bills, including Rep. Marjorie Taylor Greene of Georgia, said they wanted to add a provision to the stablecoin bill that would ban the Federal Reserve from issuing digital currency, known as a central bank digital currency (CBDC).
While that provision ultimately didn’t make it into the GENIUS Act, Congress agreed to link the Anti-CBDC bill to the National Defense Authorization Act (NDAA), widely considered a “must-pass” package.
But a unique quality of the NDAA is that it must go through a conference committee along its journey, where provisions can often fall out. Reportedly, the CBDC ban may be one of those priorities slated for removal.
“It’s not bipartisan in a way that both GENIUS and CLARITY are,” Senate Banking Chair Tim Scott reportedly told reporters on Friday. “I support the notion, but it’s not widely supported, and frankly, not supported very well at all, on the Senate Democrat side.”
Still, in the same way municipal broadband has emerged to challenge monopolistic internet providers, a CBDC could redefine the balance of power between public interest and private capital in financial services. The future of financial services, now that stablecoins have gained legitimacy, is one that bears watching.
See also: 4 Questions CFOs Need to Ask as Wall Street Embraces Stablecoins
Where the US Stands on Stablecoins and CBDCs and What’s Next
The Federal Reserve has long flirted with the idea of a CBDC, holding conferences, publishing discussion papers and launching exploratory studies. But compared to China, which has aggressively piloted its digital yuan, or the European Union, which is actively developing a digital euro under its MiCA regulatory framework, the Fed’s progress has been cautious, bordering on passive.
The Federal Reserve has made no binding commitments to develop or pilot a retail CBDC. Fed Chair Jerome Powell has consistently stated that any such move would require clear support from the executive branch and authorization from Congress.
That position may be politically prudent — but it also reflects a gridlock fueled by competing narratives: privacy vs. control, innovation vs. security and market freedom vs. public utility.
Still, the political momentum favors stablecoins, not central banks. A U.S. CBDC would represent a public alternative to the privately issued stablecoin solutions promoted by the crypto industry.
“The U.S. plans to use stablecoins as a means of maintaining the hegemony of the U.S. Dollar and by dollarising economies around the world from the ground up,” said Simon McLoughlin, CEO of Uphold, said in a post on LinkedIn. “The passing of this Bill throws the weight of the world’s largest economy behind blockchain technology and digital assets.”
Read more: Project Agora Bank Consortium Counters Stablecoins With Programmable Fiat
Can Stablecoins Provide a New Operating System for Financial Services?
In many ways, the passage of the GENIUS Act can be seen as the potential beginning of a new operating model for banks.
That transformation may not be easy. Many U.S. banks are still in the early stages of stablecoin exploration. Liquidity, compliance and consumer behavior pose meaningful barriers. For instance, liquidity requirements for stablecoin issuers — especially under the GENIUS Act’s transparency provisions — are likely to exceed traditional reserves held for comparable fiat products. Additionally, there are fears of deposit flight, where consumers move funds into stablecoins for yield or mobility, undermining core retail deposits.
“For central banks globally, it sets a precedent: you can’t ignore the private digital dollar, and you can’t delay building the governance to manage around it,” said Ravi de Silva, founder of de Risk Partners and former global head of compliance testing for financial crimes at Citigroup, in an interview with PYMNTS. “For institutions operating at scale, the Act’s audit and disclosure standards will become the new baseline.”
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