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| GENIUS |
New U.S. law creates clear stablecoin rules and boosts DeFi amid stablecoin yield ban
Stablecoin Issuers Face Strict Oversight
The GENIUS Act blocks Big Tech and Wall Street from dominating the stablecoin market, according to Circle CSO Dante Disparte. The bill requires any non-bank minting a dollar-pegged token to form a separate entity, pass antitrust scrutiny, and gain Treasury approval.
Banks must also create legally distinct subsidiaries to issue stablecoins with no leverage or lending. This model is even stricter than JPMorgan’s deposit-token proposals. Disparte calls it the “Libra clause,” designed to prevent monopolization and reinforce U.S. consumer protection.
GENIUS Act Gains Bipartisan Support
The GENIUS Act blocks Big Tech from stablecoin control through bipartisan legislation passed by over 300 House members. Issuers with under $10 billion remain under state laws, but must obtain a national trust-bank charter once surpassing that level.
The law bans interest-bearing stablecoins and penalizes unbacked tokens. Disparte claims it offers long-awaited legal clarity and competitive fairness. However, critics argue the ban on yield could limit adoption and favor overseas platforms with looser rules.
DeFi Rises as Stablecoin Yields Disappear
With the yield ban in place, the GENIUS Act blocks Big Tech while directing yield-seekers to Ethereum-based DeFi. Analysts foresee a “DeFi summer” as capital shifts from centralized stablecoins to decentralized protocols offering on-chain income.
Institutional investors are especially likely to move funds, needing yield for fiduciary reasons. Ethereum, dominating total value locked, stands to benefit most. DeFi may now emerge as the primary engine for passive income across the crypto ecosystem.
🧠 Coin Market 24/7 Commentary
The GENIUS Act is a defining moment for stablecoin regulation. Its ban on yields could ignite a DeFi resurgence, especially on Ethereum. In the long term, the U.S. may gain strategic ground in digital currency governance while decentralization deepens across Web3.