GENIUS Act Passes: Who Are the Winners, Losers, and What Comes Next?

The GENIUS Act marks a historic shift in how the U.S. government is choosing to regulate money — not just crypto. For years, stablecoins have existed in a regulatory gray area, with innovators pushing boundaries and policymakers trying to catch up. 

This bill brings clarity, but, in my opinion, also reveals who Washington is willing to trust with the digital dollar — and who it’s not. Watching how Congress drew those lines, especially between banks, tech giants, and crypto-native companies, made it clear this isn’t just a stablecoin bill — it’s a blueprint for the future of financial infrastructure.

GENIUS Act Passes: Who Are the Winners, Losers, and What Comes Next?

The GENIUS Act creates the first U.S. stablecoin framework: big banks, President Trump, and Circle win, while Big Tech and Tether face challenges. 

As President Trump prepares to sign the GENIUS Act — formally the Guiding and Establishing National Innovation for U.S. Stablecoins Act (S.1582) — early winners and losers of America’s new stablecoin regime are coming into focus, but they are not always obvious. 

This may seem counterintuitive because legislation itself sets standardized requirements on who can issue and distribute dollar-backed stablecoins in the U.S., and it includes multiple safeguards governing reserve standards, redemption rights, audits, and federal oversight. But at the same time, these onerous requirements will affect the diverse set of participants in the $260.6 billion industry differently. Early movers may not necessarily have an advantage, and the bill does not mean that big banks like JPMorgan are now destined to dominate the industry.

Much remains to be determined. 

“The current stablecoin issuers can now breathe easier as the largest market in the world has given them a clear and achievable path to mainstream adoption of stablecoins,“ said Bill Hughes, senior counsel & director of global regulatory matters at ConsenSys, in an interview. “The challenge is that this legislation gives the same path to everybody that can satisfy the regulatory requirements. Stablecoin competition has been getting steadily more fierce and there will be no let up until the market gets a better sense of what the fundamental supply and demand dynamics are.” 

Here are the initial winners and losers of the bill, along with one stuck in limbo.

Winners

Circle
Circle (CRCL), the company behind the $64.5 billion USD Coin (USDC) stablecoin, is an early winner under the GENIUS Act, as it has been asking Congress for legislation going back years. And this does not just relate to its wildly successful IPO in June that has given it a market capitalization of $60.56 billion. As a New York State-regulated issuer with long-standing monthly attestations and conservative reserve backing, the project’s setup already aligns well with the bill’s standards. This is in stark contrast to its chief rival Tether. One industry insider also told Unchained that a big potential benefit for Circle and USDC in the long run is its neutrality, which will be seen as an asset in comparison to what is expected to be a large assortment of branded stablecoins from major banks. 

Big Banks
In a 2023 interview with Forbes, a current member of the House Financial Services committee said of big banks entering the stablecoin arena, “Typically regulation entrenches incumbents, but that may not be the case here. I think that Circle is underestimating the threat from big banks. If it becomes profitable to have a stablecoin, why wouldn’t banks enter that space? JPMorgan could crush Circle.” 

Well, that day is just about here as the CEOs of JPMorgan Chase, Citigroup, and Bank of America have hinted this past week at issuing their own stablecoins. The bill grants federally regulated depository institutions clear authority to issue stablecoins through licensed subsidiaries. These banks benefit from longstanding regulatory relationships, public trust, and existing infrastructure that many crypto-native companies lack. 

President Donald Trump, Trump’s Family and World Liberty Financial
Politically, the Act’s passage under Trump’s  administration underscores the president’s role in shaping U.S. financial innovation and regulatory clarity, strengthening his image as a leader on economic modernization. Economically, the Trump-backed $2.2 billion USD1 stablecoin project gains potential legitimacy through the Act’s licensing pathways, positioning it to enter the regulated stablecoin market. 

Right now, its most prominent activity is serving as a $2 billion funding mechanism for an investment from Binance into an Abu Dhabi investment firm, but it is easy to imagine ways that the administration, given its many activities in the crypto space, can grow the USD1 market cap. Additionally, the president and his family are further protected by the bill because while it bans members of Congress from engaging in stablecoin activity, there is a carve-out for the first family.

Stuck in Limbo 

Custodia
Custodia Bank, an early crypto-bank pioneer that began exploring a bank-issued stablecoin years ago, faces an uncertain future under the GENIUS Act that matches its challenged past. For years it struggled to get its bank off the ground, and it was famously denied a Federal Reserve master account — a critical gateway to the U.S. payment system. It even sued the U.S. central bank over the decision, to no avail as of yet. Without this critical access, Custodia and similar non-federally chartered institutions may face a competitive disadvantage compared to large banks with full regulatory and infrastructure support. 

But, it could have an ace up its sleeve. In 2022, the company received a patent covering bank-issued stablecoins and tokenized deposits. The company may try to argue that any new tokens run afoul of its patent, and seek legal remedies or perhaps a licensing agreement. “Custodia applied early for the patent on bank-issued stablecoins and it was granted in 2022, covering both stablecoins and tokenized bank deposits,” said Custodia CEO Caitlin Long in an interview. “We are already aggressively pursuing infringers.” She would not identify specific targets though, and it does not appear that any legal filings have been submitted.

Custodia is not sitting on its hands and knees either, as it seeks to use the new law to expand community banking access to stablecoins as they face threats from big competitors. “We’re working with Vantage Bank in Texas to build a consortium of smaller banks that can compete with the big banks, protected by that patent as a competitive advantage,” said Long. 

Losers 

Tether
The GENIUS Act restricts issuance and distribution of dollar-backed stablecoins in the U.S. to entities federally or state regulated within the country (Sections 3(a)(4) and 4(a)(7)). Foreign issuers like Tether, which is behind the $160 billion USDT, cannot legally offer stablecoins unless they obtain regulatory approval or partner with a qualified U.S.-regulated entity. These issuers must comply with strict requirements on reserves, audits, and transparency, including maintaining 100% cash or cash-equivalent backing and undergoing third-party audits (something that Tether has never done). The Act provides no exceptions for foreign entities, signaling clear Congressional intent to tightly control stablecoin issuance domestically. Additionally, the bill has an ‘extraterritorial clause’, meaning its requirements extend overseas if conduct involves the offer or sale of a payment stablecoin to a person located in the United States.

Non-compliant stablecoins will be phased out in three years (Section 4(a)(9)), preventing a repeat of the ‘Terra Luna’ collapse where unregulated foreign stablecoins harmed U.S. users. 

But all may not be lost for Tether, even if the legislation creates some initial headaches. Its options could include registering a separate U.S. entity or finding a partner to issue the tokens (with a likely fee-sharing agreement). It also helps that one of its big backers is the investment bank Cantor Fitzgerald, whose former chairman Howard Lutnick is now the U.S. Commerce Secretary, and the company is in business with his son at a bitcoin treasury firm. Still, at a high level this legislation could cause the company to pull back some from the U.S. market and lead to further fragmentation of its business. Chief Executive Officer Paolo Ardoino famously backed away from Europe after it passed a landmark piece of crypto legislation known as Markets in Crypto-Assets Regulation (MiCA) in 2024, which put onerous reserve requirements on the stablecoin issuer and resulted in several exchanges delisting Tether.

In response to questions about how the bill will impact Tether’s business, a company spokesperson referred Unchained to a previous company statement: “We are grateful for the open dialogue with U.S. lawmakers throughout this process and look forward to continuing to contribute our expertise as the regulatory framework matures.”

Big Tech
The GENIUS Act imposes strict conditions on Meta, Apple, Amazon, and X (formerly Twitter), barring them from issuing dollar-backed stablecoins without unanimous approval from the Stablecoin Certification Review Committee (Sections 4(a)(5) and 4(a)(11)), — comprised of the Treasury Secretary (chair), the Fed Chair/Vice Chair for Supervision, and the FDIC Chair — which holds the authority to review and approve certification applications for stablecoin issuers that are not primarily financial non-financial companies like Big Techs above, and must secure unanimous Committee consent. 

This clause in the bill reflects lingering Congressional concerns after Meta’s Libra project faced heavy regulatory opposition in 2019 over risks to financial stability, consumer protection, and privacy, leading to its collapse. Elon Musk has said, “We’re not currently planning to launch a stablecoin or digital currency on X,” showing how regulatory challenges could limit Big Tech’s ambitions. The Act’s requirements ensure stablecoin issuance remains primarily within regulated financial institutions, preventing tech companies from disrupting the market. However, Big Tech has been kicking around the edges of financial services for years, so it would not be surprising to see them try to launch a stablecoin in the future.

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