Does US Stablecoin Regulation Make the Rich Even Richer? A Deep Dive into the GENIUS Act

• What Does the GENIUS Act Actually Do?
• Why Are Small Players Calling Foul?
• The Lobbying Lens: Who’s Pulling Strings?
• FAQ: Your Burning Questions Answered

The US GENIUS Act has introduced strict regulations for dollar-pegged stablecoins, favoring established players like Tether and Circle while raising barriers for newcomers. Critics argue this could concentrate power among financial giants, with potential lobbying influences shaping the rules. Meanwhile, institutional investments in US Treasuries by stablecoin issuers spark debates about regulatory capture. Here’s how the new rules might reshape the crypto landscape—and who stands to benefit most.

What Does the GENIUS Act Actually Do?

The GENIUS Act, passed by the US Senate, sets clear rules for stablecoin issuers: only approved entities can operate, and "Payment Platform Systemic Importance" (PPSI) firms like Meta and Google face extra scrutiny. Stablecoins must maintain 1:1 reserves in USD or US Treasuries, with regular audits—a move that directly challenges opaque operators like Tether. But while the framework aims to reduce systemic risk, critics say it’s a playground for incumbents. For instance, Tether ($160B market cap) and Circle ($64B) already dominate the market, and Binance’s BUSD leverages its exchange’s vast liquidity. New entrants? They’ll need deep pockets just to comply.

Why Are Small Players Calling Foul?

Compliance costs are the elephant in the room. Pre-launch audits, Treasury holdings, and regulatory infrastructure demand millions—a hurdle TerraUSD’s collapse in 2022 proved could be catastrophic if skipped. An SEC insider warns the Act does little to address underlying risks, noting, "It’s like requiring life jackets on the Titanic after it sank." Meanwhile, Coinbase’s stock surged post-regulation, while Visa and Mastercard dipped—a telltale sign of where Wall Street thinks the wind is blowing.

The Lobbying Lens: Who’s Pulling Strings?

Over $300M flowed into 2024 election lobbying, per public records. Thehighlights ties between the TRUMP family and stablecoin ventures, asking: "Who’s regulating whom?" The Center for Economic Policy Research calls the Act a "big business bonanza," sacrificing competition for stability. Even the Act’s name—GENIUS—smacks of irony when you see Tether and Circle snapping up US Treasuries, fueling theories of a quid pro quo with regulators.