In a landmark move for the cryptocurrency industry, the U.S. Senate has advanced the Guaranteed Essential Neutral and Interoperable Uniform Stablecoins (GENIUS) Act, setting the stage for what some experts believe could be a multi-year crypto bull run. The bill, which aims to establish a comprehensive federal framework for stablecoin issuance and oversight, received strong bipartisan support with a 66–32 vote, including 16 Democrats joining Republican senators.
Matt Hougan, Chief Investment Officer of digital asset manager Bitwise, has called this development one of the most important milestones in crypto regulation to date. He argues that the GENIUS Act could have broader and more long-lasting implications than the January 2024 approval of spot Bitcoin ETFs.
A New Era of Stablecoin Oversight
The GENIUS Act proposes a rigorous set of guidelines to ensure the legitimacy and stability of stablecoins—digital tokens typically pegged 1:1 to fiat currencies like the U.S. dollar. Under the proposed law, stablecoins must be backed by U.S. Treasuries or dollar equivalents, ensuring full collateralisation. Additionally, major stablecoin issuers would be subject to federal registration, mandatory audits, and anti-money laundering (AML) protocols.
For years, stablecoins have operated in a regulatory grey zone. This bill seeks to eliminate ambiguity by providing a clear legal and operational framework. According to Hougan, this regulatory clarity could be the catalyst that accelerates mainstream and institutional adoption of stablecoins.
The Broader Implications for Crypto Assets
Hougan believes that the ripple effects of the GENIUS Act could extend well beyond stablecoins themselves. With a robust legal framework in place, financial institutions are more likely to embrace blockchain technology for a wider range of financial services. This could fuel substantial growth in non-Bitcoin crypto assets such as Ethereum (ETH), Solana (SOL), and decentralised finance (DeFi) tokens like Uniswap (UNI) and Aave (AAVE).
“The passage of this bill starts the ball rolling,” said Hougan. “Once we normalise moving dollars over blockchain networks—and the largest financial institutions in the world are participating in that effort—it’s a relatively small step to moving stocks, bonds, and other financial assets over the same rails.”
Institutional Integration: The Next Big Leap
The GENIUS Act is more than just a regulatory milestone—it’s a signal that traditional finance may be preparing to converge with blockchain. Hougan asserts that this legislation lays the groundwork for the migration of a $100+ trillion financial ecosystem onto blockchain infrastructure. He draws a parallel with the impact of Bitcoin ETFs, which helped establish crypto’s legitimacy as an asset class for institutional investors.
If stablecoins become the gateway for large-scale blockchain adoption, the GENIUS Act could represent a paradigm shift—from crypto being seen as a speculative asset class to it becoming a core part of the financial plumbing of the global economy.
A Bullish Outlook for Crypto Markets
The Senate’s movement on the GENIUS Act has fuelled a wave of optimism in crypto markets, with investors anticipating a prolonged rally. Regulatory certainty has long been one of the key barriers to institutional involvement. If the GENIUS Act passes into law, that barrier could be removed, potentially unlocking trillions in market value.
Hougan’s analysis is clear: the regulation of stablecoins is not the endgame, but rather the beginning of a larger transformation. As blockchain matures into a foundational financial technology, crypto assets aligned with this vision—particularly those enabling decentralised applications and smart contracts—stand to benefit most.
