The U.S. "GENIUS Act" brings a new era for stablecoins! A regulatory framework will be established in 2025, and an on-chain national debt and VC investment frenzy is on the horizon?

The "GENIUS Act" (full name: "2025 U.S. National Innovation and Establishment Act for Stablecoins"), passed in July 2025, provides a comprehensive regulatory framework for stablecoins and may trigger a new round of explosive growth in the encryption industry. The act requires stablecoins to be supported by low-risk assets such as cash and government bonds, prompting traditional banks and emerging projects to compete in issuing compliant stablecoins. Currently, the total market capitalization of stablecoins has reached $272 billion, and experts predict that on-chain government bond assets and stablecoin deposits will experience exponential growth in the next five years, with VC investments likely to continue to increase.

1. Regulatory framework implementation: stablecoins become the new infrastructure of the encryption economy

The passage of the "GENIUS Act" establishes clear standards for payment stablecoins: they must be supported by high-quality assets such as cash, U.S. Treasury bonds, or Federal Reserve reserves. This policy paves the way for traditional banks (like Bank of America) to issue stablecoins, while also excluding some algorithmic stablecoins (like Ethena) from the compliance scope.

The bill grants stablecoins the status of "new financial infrastructure," and their low cost and high efficiency are expected to replace traditional payment networks. Artem Gordadze, an angel investor at NEAR Foundation, pointed out: "Regulatory stability has liberated innovators, allowing them to focus on creating a better user experience."

2. Resonance of Capital and Innovation: VC Layout, Bank Entry, and Asset Explosion

Currently, the stablecoin market is dominated by Tether ($165 billion) and USDC ($67 billion), but new participants are rapidly emerging. In the second quarter of 2025, venture capital in the cryptocurrency sector is expected to exceed $10 billion, with predictions of another new high in the fourth quarter driven by the GENIUS Act and the subsequent CLARITY Act (which aims to classify non-stablecoin cryptocurrencies as commodities).

Propel VC General Partner David Mort emphasized: "In the next five years, on-chain government bonds and stablecoin deposits will experience exponential growth." This trend has triggered two types of innovations:

1. Traditional financial institutions: issuance of compliant stablecoins, but facing the challenge of slow processes.
2. Startup Project: Developing a new generation Web3 application that integrates micropayments, cross-border transactions, and DeFi functionalities.

3. Future Outlook: AI Empowering Web3 and Compliance Evolution

The next stage of competition will focus on lowering the user entry barrier. Angel investor Gordadze believes that "the most attractive investment theme is consumer applications that leverage AI to provide a seamless Web3 experience." AI technology can simplify the complexity of DeFi operations, but at the same time, it raises higher requirements for the technical capabilities of blockchain founding teams.

In addition, if the "CLARITY Act" is implemented, it will provide a regulatory framework for non-stablecoin crypto assets and further promote the wave of programmable financial innovation. David Alexander II, a partner at Anagram VC, pointed out: "Founders will finally have a clear framework, and the previously shelved innovative ideas will accelerate their realization."

4. Conclusion

The "GENIUS Act" marks the transition of the United States from exploring to maturing in the regulation of stablecoins, as the integration of traditional finance and encryption innovation enters a new stage. Investors need to pay attention to three major trends: progress in the issuance of bank-backed stablecoins, the expansion of on-chain RWA (real-world assets) tokenization, and breakthroughs in AI-driven Web3 applications. Driven by both regulatory compliance and technological innovation, stablecoins may become the core force in reconstructing the global payment system and asset allocation model.