The recent US passage of the GENIUS Act marked a significant turning point for stablecoins, setting a regulatory precedent that may shape digital finance globally.
Fabian Dori, chief investment officer at Sygnum Bank, joined the latest episode of Cointelegraph’s Byte-Sized Insight podcast, detailing how the act will influence stablecoin adoption, institutional engagement and international regulatory alignment.
Innovation and stability
The GENIUS Act, which introduces a clear federal regulatory framework for fiat-backed stablecoins, demands full transparency from issuers, including one-to-one asset backing, mandatory federal licensing and independent reserve audits.
According to Dori, these provisions are essential for driving responsible innovation and financial stability.
“I truly think that the impact of the GENIUS Act will be significant, both in the short and in the long term,” said Dori.
"By requiring that stablecoin issuers get a federal license, back their stablecoins 1-to-1 with high-quality liquid assets and disclose the reserve composition... institutional investors can really have the legal confidence to use regulated stablecoins."
Yet, one controversial aspect of the act, the prohibition of yield-bearing stablecoins, may substantially reshape how stablecoins integrate within decentralized finance (DeFi).
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Dori points out that the move may create a clearer market distinction between payment-focused stablecoins and yield-generating tokenized money market products.
“It’s true that it’s not possible anymore to earn yield directly from holding fiat-backed stablecoins,” he said.
"That will create a clear segregation between non-yielding stablecoins and tokenized money market funds."
Europe vs. US
Another key topic discussed is the divide between regulation in Europe and the US.
Europe, which has been cautious in its regulatory stance, particularly with the digital euro initiative, may now face pressure to accelerate innovation due to the US stance taken through the GENIUS Act.
“It seems a bit like the US is much more focusing on a framework that allows and drives innovation, while Europe is primarily focused on risk management,” Dori said.
"The GENIUS Act will really attract both new issuers, but also new use cases to the US, which then might lead to Europe needing or being forced to open up."
Listen to the full episode of Byte-Sized Insight for the complete interview on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!
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