Following extensive Congressional discussions and modifications, the GENIUS Act is now close to becoming law. Aimed at regulating the stablecoin industry across the United States, the bill is anticipated to be signed soon.

Representatives from Digital Chamber, a Washington D.C.-based organization advocating for the blockchain industry, stated that the bill's approval may occur before the end of June. Such a development could enhance institutional adoption and reinforce the global dominance of the US dollar.

Set to be enacted, the GENIUS Act represents a pivotal piece of legislation that would establish federal regulation over the U.S. stablecoin sector.

Despite recent disagreements among Republican and Democratic Senators, the bill successfully passed a crucial procedural vote. Kristopher Klaich, Policy Director at The Digital Chamber, expressed strong confidence in its imminent approval.

According to Taylor Barr, the advocacy group’s Government Affairs and PAC Manager, 53 amendments have been proposed.

Barr clarified that a comprehensive open process involving 53 separate debates is improbable. He anticipates these amendments being grouped into three or four categories, leading to a more efficient and streamlined open amendment process, as many are repetitive.

Should Barr's predictions hold true, the bill will likely pass before the end of the current month. If this occurs, its implications for the broader cryptocurrency industry will be significant.

Stablecoins are arguably the most globally adopted digital asset. Unlike traditional cryptocurrencies such as Bitcoin or altcoins, they offer worldwide access to a stable medium of exchange.

A January report by crypto exchange CEX.io indicated that the total stablecoin transaction volume reached 27.6 trillion in 2024, surpassing Visa's total payment volume and Mastercard's by 7.7%.

Tether and Circle dominate the market with respective values of $151 billion and $59 billion. Together, they account for an 89% market share, as per rwa.xyz.

Their substantial presence in global economies underscores the importance of a bill like the GENIUS Act. This is particularly relevant given the weakened state of the US dollar.

The US dollar began the year in a notably weak position. Two days ago, the US Dollar Index (DXY), a key indicator significantly influenced by the euro, fell nearly 9% to just below 99. These figures mark its weakest start to a calendar year since at least the mid-1980s.

Facing such data, alongside ongoing trade uncertainties and recession fears, investors are fundamentally reassessing the dollar's role within their portfolios.

This scenario, coupled with broader de-dollarization efforts by major US debt holders such as China and Japan, amplifies concerns regarding the dollar's future.

Ark Invest's data illustrates this shift. In 2011, these three nations held 23% of the $10.1 trillion in outstanding US Treasury debt.

By November 2024, despite the total outstanding US Treasury debt increasing to $36 trillion, their combined holdings had dropped significantly to around 6%.

This substantial reduction in holdings by key foreign creditors highlights mounting worries about the dollar's long-term stability and the United States' capacity to refinance its massive debt.

Klaich added that legislation like the GENIUS Act is vital:

The data supporting Klaich's remarks appears to validate his analysis.

The stablecoin market is on the brink of significant expansion. An April report from Citigroup forecasts that the total stablecoin supply could reach $1.6 trillion by 2030. This growth could generate demand for US debt akin to historical levels supported by sovereign nations.

The GENIUS Act could facilitate this transition.

By serving areas and people overlooked or undermined by conventional banking systems, stablecoins might also help counteract the global de-dollarization movement.

Given persistent inflation risks, the Federal Reserve is unlikely to repurchase significant amounts of US treasuries. Thus, promoting stablecoin usage allows this market to effectively supplant currently inefficient financial mechanisms.

If the GENIUS Act is implemented appropriately, the stablecoin industry could evolve into a valuable financial tool for the US government to ensure enduring support for the US dollar.

The bill underwent a challenging revision process. According to Barr, the process was laborious and politically demanding.

Nonetheless, multiple revisions were essential prerequisites for its passage to ensure the bill responsibly tackled consumer protection, national security, and market integrity issues.

Klaich pointed out that these critical concerns were fairly addressed during the legislative process. He emphasized that recent versions of the bill effectively incorporated these revisions.

The future will determine whether the bill passes and fulfills its intended purpose in aiding the US navigate its intricate economic landscape.

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