The GENIUS Act’s $250M battle begins now: Bitcoin stands as the last bastion against censorship

The GENIUS Act, enacted on July 18, initiates a critical two-year rulemaking period that will define the future of the $250 billion stablecoin market. The central conflict revolves around whether stablecoin issuers can offer yield through affiliates, which would allow them to compete with banks, or if regulators will neuter them into bank-wrapped products. The framework, effective by mid-2028, mandates that US-touching stablecoins must be issued by federally supervised entities holding reserves in cash, bank deposits, or T-bills, forcing a fork in the market between compliant and offshore assets.

This legislation favors large US banks and existing issuers like Circle and Paxos seeking permitted status, while potentially crushing smaller or experimental offshore issuers like Tether by cutting off US distribution after the deadline. For Bitcoin, the Act serves as a narrative tailwind, positioning it as the censorship-resistant asset outside the new regulated perimeter. For Ethereum, it offers structural support as permitted issuers are expected to utilize mature EVM chains for settlement, potentially creating a two-tiered DeFi ecosystem: one compliant and institutional, the other permissionless and global.

The timeline involves lobbying and drafting rules until mid-2026, followed by regulatory sorting in 2026-2027, culminating in the market hardening around compliant rails by 2028, making on-chain settlement resemble regulated financial infrastructure.

(Source：CryptoSlate)