The recent approval of the GENIUS Act by U.S. lawmakers is expected to ignite a major expansion in the stablecoin market, with Bank of America projecting a potential increase of up to $75 billion in supply. The legislation, aimed at establishing a comprehensive regulatory framework for digital dollars, marks a significant milestone in bringing stablecoins under the umbrella of federal oversight—while preserving their appeal as a tool for efficient digital transactions.
Analysts at Bank of America say the act could provide the clarity and confidence needed for institutional adoption, particularly by banks and fintech companies looking to issue compliant stablecoins. With clearer rules around issuance, reserve backing, and risk management, the legislation is likely to encourage a wave of new entrants to the stablecoin sector, both from traditional financial institutions and crypto-native firms.
The GENIUS Act (short for “Guaranteeing Essential National Infrastructure Using Stablecoins”) mandates that issuers must hold fully-backed reserves in U.S. dollars or Treasury securities, while allowing both state and federally chartered entities to participate in the issuance process. This dual pathway could give companies like Circle, PayPal, and others more flexibility, while simultaneously opening the door for banks to integrate stablecoins into their payment and settlement systems.
The potential $75 billion increase in stablecoin supply could also reshape liquidity dynamics across crypto markets. As stablecoins act as a key bridge between fiat and decentralized finance, a larger, regulated supply may bolster on-chain lending, trading, and cross-border payments. Still, some skeptics note that regulatory clarity doesn’t necessarily guarantee demand—pointing to the need for robust infrastructure and continued consumer trust. As the regulatory groundwork solidifies, market participants will be watching closely to see how aggressively financial institutions step into the ring.
