GENIUS Act Targets Big Tech and Wall Street in Stablecoin Market

The GENIUS Act introduces stringent measures to prevent tech giants and traditional financial institutions from monopolizing the U.S. stablecoin market. Circle's Chief Strategy Officer Dante Disparte highlighted a provision dubbed the 'Libra clause,' referencing Meta's abandoned digital currency project. Non-bank entities must now establish separate operations for stablecoin issuance, subject to antitrust review and Treasury oversight.

Banks face equally rigorous constraints, required to issue stablecoins through legally distinct subsidiaries barred from leverage or risk-bearing activities. This structure, described as more conservative than proposals like JPMorgan's deposit tokens, aims to insulate the financial system from potential instability.

The legislation's ban on yield-bearing stablecoins may inadvertently push institutional capital toward decentralized finance platforms. Market participants anticipate Ripple effects across crypto assets as regulatory clarity reshapes competitive dynamics.