Will the GENIUS Act Usher a Stablecoin Startup Funding Boom?

The GENIUS Act, passed in July 2025, establishes a regulatory framework for stablecoin adoption, potentially igniting a surge in venture capital investments and innovation within the sector. Stablecoins, praised for their speed and cost-efficiency compared to traditional banking rails, are poised to underpin a new wave of crypto applications.

David Mort, an early Coinbase investor and General Partner at Propel VC, highlights stablecoins as the most observable, fast-growing trend. "Over the next five years, we likely see exponential growth in stablecoin-linked treasuries and deposits onchain," he said. The total stablecoin market cap currently stands at $272 billion, with Tether ($165B), USDC ($67B), and Ethena ($11B) leading the pack.

Regulatory clarity from the GENIUS Act could further accelerate market expansion. "The Act provides the stability for underlying payment rails, freeing innovators to focus on superior user experience," noted Artem Gordadze. While risks remain, the trajectory for stablecoins appears bullish, with DefiLlama data underscoring their dominance in crypto's financial infrastructure.