GENIUS Act Proposal May Impact Stablecoin Issuers

The proposed GENIUS Act could significantly affect stablecoin issuers by prohibiting them from offering interest or yields to holders. According to NS3.AI, this legislative move is expected to redirect capital towards yield-generating tokenized money market funds. Over the past six weeks, USDC has experienced net redemptions totaling approximately $6.5 billion, resulting in a reduction in stablecoin liquidity and diminishing short-term buying power in the crypto market. Simultaneously, investors are reallocating funds from stablecoins to traditional safe-haven assets such as gold and silver. In response to these market shifts, Circle is increasingly concentrating on transaction activity and the adoption of real-world payments through strategic partnerships.