GENIUS Act Boosts Stablecoin Oversight; Bitwise CIO Responds
President Trump signed the GENIUS Act on July 18, creating the first federal framework for stablecoin regulation. The law aims to enhance consumer protections, combat money laundering and draw institutional investors into blockchain and crypto markets. It sets clear requirements for asset backing, real-time trading and redemption.
Bitwise Asset Management’s CIO Matt Hougan later challenged critics who compare modern stablecoins to the 19th-century US free-banking era. He noted that today’s stablecoins operate under strict stablecoin regulation, unlike the historically limited and unreliable banknotes. Hougan added that state-regulated tokens are capped at $10 billion and make up a small market share, while over 95% of stablecoins follow federal oversight requiring transparent asset management. He urged policymakers to rely on contemporary frameworks for stablecoin regulation and oversight.
Bullish
The enactment of the GENIUS Act and subsequent defense of modern stablecoins by Bitwise’s CIO provide clear federal guidelines and counter critiques from outdated analogies. This regulatory clarity reduces legal uncertainty and boosts confidence among institutional and retail traders. In the short term, the market may see increased demand for regulated stablecoins as traders anticipate smoother redemptions and improved asset backing. Over the long term, formalized stablecoin oversight is likely to attract greater institutional investment, enhance liquidity and support broader adoption of crypto assets, reinforcing a bullish outlook for the stablecoin sector.