GENIUS Act Opens Door for Stablecoin Bank Settlements, Institutional Adoption

Stablecoin adoption among United States banks and financial institutions may accelerate following the passage of new legislation in the Senate.

The Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act passed the US Senate in a 68–30 Tuesday vote, Cointelegraph reported. The bill aims to set clear rules for stablecoin collateralization and mandate compliance with Anti-Money Laundering laws.

The Senate vote sends a “strong positive signal to institutions” that brings the bill one step closer to becoming law, according to Katalin Tischhauser, head of investment research at digital asset bank Sygnum.

Numerous large banks and traditional financial institutions are planning stablecoin integrations for payments and settlements, Tischhauser told Cointelegraph, adding:

“Clear regulatory frameworks and compliance pathways are a necessity, as is legal recognition of stablecoins as settlement instruments.”

However, she said that institutional stablecoin use may initially be limited to tokens issued on private blockchains.

Emerging crypto policy developments and stablecoin regulations are significant catalysts to the 2025 crypto market cycle, Alice Li, investment partner and head of US at crypto venture capital firm Foresight Ventures, told Cointelegraph during the Chain Reaction X Spaces show on June 3.

“One of the strongest drivers is definitely the policy change,” she said, referencing US President Donald Trump’s Bitcoin reserve approval and stablecoin policy developments as the main catalysts for Bitcoin (BTC) price upside in 2025.

Related: Stablecoin legislation to drive Bitcoin market cycle in 2025: Finance Redefined

GENIUS Act makes stablecoin issuers “key players”

Full Congress approval of the GENIUS Act will make stablecoins “part of US financial infrastructure,” said Andrei Grachev, managing partner at Falcon Finance and DWF Labs.

“If issuers start holding large amounts of Treasurys, that changes their role from niche instruments to key players in the economy,” Grachev said.

He added that treasury-backed stablecoins would give institutions more confidence in using them for settlements and payments.

Related: Jack Ma’s Ant International eyes stablecoin licenses in Singapore, Hong Kong

Financial institutions using stablecoins have been “operating under a regulatory gray area, with few concrete moves being made due to lack of clarity and government guidance,” according to Alex Buelau, co-founder of Rayls, the blockchain for banks working with JP Morgan’s Kinexys blockchain infrastructure solution.

“Now that this is done, institutions won’t hesitate to jump, capitalizing on the opportunities that stablecoins have to offer, particularly when it comes to cross-border payments, 24/7 settlements and enhancing global, onchain liquidity,” Buelau told Cointelegraph.

On June 15, investment banking giant JPMorgan Chase filed a new US trademark application for “JPMD,” amplifying speculation of a stablecoin offering.

The filing listed services including digital asset trading, transfers, exchange, clearing and payment processing.

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