STABLECOINS

Current Context: The US Senate has passed the GENIUS Act, setting the stage for federal regulation of stablecoins.

ABOUT STABLECOINS:

• Definition : Stablecoins are crypto-assets pegged to stable assets like the US dollar or gold. They aim to reduce the volatility seen in coins like Bitcoin, making them more suitable for transactions and savings.
• Why Stable?:
• They maintain a steady value, making them reliable for everyday use, remittances, and as a bridge between traditional finance and crypto ecosystems.
• GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act):
• Passed by the Senate on June 17, 2025, with a 68–30 vote
• Requires full backing of each stablecoin with liquid assets (cash, T‑bills) at a 1:1 ratio, monthly reserve disclosures, AML compliance, and annual audits for issuers above $50 billion caps
• Market Significance: The stablecoin market is valued at approximately $240 billion and may reach $1.6 trillion by 2030, potentially holding up to $1.2 trillion in short-term US Treasuries