Impacts of the Newly Passed US Stablecoin Law: A Shift Towards Dollar Dominance and Market Consolidation

Aleksey Zyuzin, the CEO of the Crypto Summit, believes that «the United States is showing a desire to become the leader in the industry and solidify the dollar as the main unit of account in the digital economy.»

He also points out potential challenges:

*“The bill institutionalizes the ability to freeze assets and block transactions at the request of regulators, which moves the market further away from the principles of decentralization.”*

The speaker reminded that major issuers, such as Tether, have already been *[freezing addresses](https://forklog.com/news/tether-zamorozila-28-7-mln-usdt-na-13-adresah)* upon request from authorities. According to Zyuzin, the GENIUS Act simply formalizes this approach into legislation.

Vugar Usy Zade, the Chief Operating Officer at Bitget, is confident that the new licensing standards and reserve requirements will build trust and safeguard users, but will simultaneously increase entry barriers.

He suggests that this will accelerate market consolidation, benefitting larger projects with the necessary resources to comply with all regulations.

However, the regulations will not apply to large offshore stablecoins, for instance, USDT. This grants them flexibility but also makes them vulnerable to pressure from U.S. regulators.

Alexander Peresichan, CEO of Tehnobit, believes the GENIUS Act could shift the market share between major players. He states that Circle, as an American company, will have to comply with the new legislation, while Tether will remain formally outside the jurisdiction of the U.S., posing additional risks for both the issuer and holders.

*“For institutional investors, the GENIUS Act establishes an ‘approved’ standard that strengthens the position of USDC,”* he emphasized.

As a result, the market may become divided: some tokens will be subjected to strict U.S. regulations while others strive to maintain autonomy outside the country, Peresichan noted.

Libertarian economist Yevgeny Romanenko argues that officials, under the guise of protecting users, aim to control stablecoins and the market as a whole. He is confident that regulatory pressure will cause Tether to lose ground not only in Europe and Russia but also in the U.S. Most likely, USDC will fill the gap left in the American market.

Romanenko believes that the adoption of new laws will not diminish demand for «stablecoins»; on the contrary, individuals will increasingly consider the qualities of exchange media, gradually shifting to «proper cryptocurrencies» with non-custodial storage, such as Bitcoin.

Furthermore, the expert sees no correlation between the stablecoin market and the demand for U.S. government bonds—interest in them is driven by government spending and the central bank’s policies. With the rapid growth of national debt, this issue is becoming more pressing, but «stablecoins» do not play a key role in this dynamic, the speaker concluded.

According to trader and author of the Telegram channel Coen+, Vladimir Cohen, the new law will strengthen the dollar’s position in the crypto economy.

*“In the event of an issuer’s bankruptcy, stablecoin holders will have priority over other creditors. This will improve trust in the instrument: the issuance volume could surpass $1 trillion within two years,”* noted the expert.

However, the law creates obstacles for startups and foreign companies. Issuers are required to register in the U.S., comply with capital, liquidity, and risk management standards, and are prohibited from issuing stablecoins backed by crypto assets or algorithms; such projects are banned for the next two years, Cohen stressed.

*“The essence of the GENIUS Act is to increase demand for the dollar and U.S. government debt. This is not merely regulation, but a tool of geopolitics,”* concluded the trader.

It’s worth noting that in May, Senator Elizabeth Warren *[called](https://forklog.com/news/elizabet-uorren-vystupila-protiv-stejblkoinov-ot-krupnyh-korporatsij)* for a review of the GENIUS Act so that corporations would «not be able to issue their own money.»