Genius Act Sparks Us Optimism As Global Voices Urge Caution

When nan GENIUS Act passed nan US Senate this summer, US-based serial entrepreneur Silvina Moschini felt a consciousness of long-awaited vindication. The co-founder of Unicoin and SheWorks! had spent years navigating an uncertain regulatory landscape, building a compliant, asset-backed exemplary moreover arsenic U.S. argumentation stalled.

The signing of nan GENIUS Act into rule established nan first broad regulatory model for US-issued stablecoins. Supporters reason it will heighten trust, thrust mainstream take and bolster nan dollar’s position arsenic nan world reserve currency, web3 news outlet Cointelegraph wrote successful an article published connected Friday, August 1st.

With stablecoins now gaining traction successful world finance, nan GENIUS Act could besides beryllium a boon for nan processing world, pull organization liking and thrust a resurgence successful decentralised finance (DeFi). However, concerns stay complete unresolved issues, specified arsenic nan regularisation of overseas issuers, doubts astir nan prohibition connected yield-bearing stablecoins and nan imaginable power of firm and accepted finance players, Cointelegraph added.

‘Brings legitamacy to nan space’

“The GENIUS Act is nan astir important portion of authorities for nan crypto economy,” said Moschini. “It brings legitimacy to nan space, it brings a clear group of rules, and it allows entrepreneurs to play successful a adjacent and quadrate environment.”

For Moschini, nan caller model transforms stablecoins from a regulatory headache into a instauration for growth. After repeated run-ins pinch nan SEC nether Gary Gensler’s leadership, her squad persisted successful designing Unicoin pinch compliance successful mind. “We did it pursuing each nan rules,” she said.

The Act, which requires afloat backed, licensed US stablecoin issuance, is much than a compliance milestone for her business. It signals nan commencement of a broader era of financial inclusion.

“We judge that pinch this clarity we tin yet bring each nan invention that’s been built offshore backmost to nan U.S., which is nan biggest system successful nan world,” she says. “This enactment sets nan shape for a caller activity of innovation. It’s not astir getting free of regulation; it’s astir having nan correct regulation. And now we do.”

A transformative moment

Across nan Atlantic, Niall Dennehy, co-founder of Nestifi, frames nan authorities arsenic a long-overdue turning point, according to a LinkedIn post.  “This is 1 of nan astir transformative moments successful fintech regularisation for complete a decade,” he says. “Until now, stablecoin issuers operated successful a grey area. The GENIUS model changes that.”

By requiring afloat reserve backing, monthly disclosures, and strict U.S. licensing, nan Act introduces transparency arsenic a halfway feature. “This is nan dawn of genuinely transparent money,” he says. “For nan first time, we person a costs obstruction wherever immoderate personification tin verify nan system’s solvency successful existent time.”

That transparency positions regulated stablecoins arsenic nan backbone for cross-border payments, embedded finance, and programmable money. Dennehy advises startups to attraction connected merchandise and maturation alternatively than building regulated infrastructure themselves. “Your competitory advantage isn’t going to travel from moving a compliant financial institution. Let partners grip nan regulatory overhead truthful you tin attraction wholly connected product, growth, and your halfway mission.”

Others are much cautious

But arsenic American entrepreneurs cheer, others are much cautious. Rodney Prescott, Head of Industry Relations astatine Zekret, has spent decades moving successful payments and regulatory technology. He sees nan Act arsenic little a neutral rulebook and much a instrumentality of monetary influence.

“The Genius Act is not overmuch different from a deposit-taking requirement,” he said. Stablecoin issuers must clasp liquid U.S. assets for illustration Treasuries, echoing accepted banking rules.

The consequence, he warns, is simply a reinforcement of U.S. dollar dominance. “It’s astir giving power to nan U.S. dollar,” Prescott said. In countries pinch anemic aliases unstable currencies, dollar-backed stablecoins could switch section money. “If U.S. dollar-based stablecoins stay nan stablecoin of choice, everyone else’s sovereign monetary policies are fundamentally undermined.”

Issuers extracurricular nan U.S. look steep barriers. “If you’re a European startup aliases an issuer successful a smaller market, to rumor a dollar-based stablecoin nether this Act, you’d request to clasp U.S. treasuries and perchance meet U.S. banking requirements. That sets a very precocious obstruction to entry,” Prescott added.

Prescott draws a parallel to Charles de Gaulle’s informing astir nan “exorbitant privilege” of nan dollar. If awesome corporations for illustration Amazon, Walmart, aliases Google rumor dollar-backed stablecoins, he said, “we’re looking astatine a world costs strategy tied straight to U.S. Treasuries. That’s not a neutral infrastructure, it’s a geopolitical shift.”

The enactment leaves a captious information gap

Beyond questions of monetary influence, nan Act leaves different captious gap: cybersecurity.

Yevheniia Broshevan, nan Ukrainian co-founder of blockchain information patient Hacken, warns that nan rule says small astir nan integer foundations of nan stablecoin ecosystem successful a tweet connected X.

“Code integrity, operational resilience, incident response, nary of that is successful nan Act,” she said. “If stablecoins are to service arsenic trusted infrastructure, information can’t beryllium near retired of nan equation.”

Broshevan’s interest highlights a paradox. The Act treats stablecoins arsenic systemically important capable to require afloat reserves but does not reside nan method resilience of nan systems that clasp and move them. A azygous vulnerability could trigger cascading effects, sloppy of really good nan tokens are collateralised.

A milestone and a mirror

Even Moschini, a starring protagonist of nan Act, notes that passing a rule is only nan first step. Policy must beryllium implemented efficaciously to present connected its promise. The GENIUS Act creates a instauration for regulated stablecoins, but its effect will dangle connected execution, by issuers, by regulators, and successful nan codification itself.

For now, nan US celebrates clarity, while world voices inject a statement of caution. The GENIUS Act offers a model for transparency and trust, but besides raises questions astir monetary power and cybersecurity gaps, Jillian Godsil, Blockleaders CEO and Founder, told Euro Weekly News.

“It is some a milestone and a mirror,” nan award-winning Irish writer added. “It reflects America’s intent to lead successful integer money connected its ain terms. Whether that activity stabilises aliases disrupts nan world strategy will dangle connected what happens next, onshore, offshore, and heavy successful nan code.”