GENIUS Act brings U.S. stablecoin regulation but leaves foreign issuers unclear

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Artem Shendetskii

01.08.2025

GENIUS Act brings U.S. stablecoin regulation but leaves foreign issuers unclear — GENIUS Act boosts stablecoins but leaves foreign issuers unregulated.

The recent signing of the GENIUS Act into law marks a historic moment in the regulation of stablecoins in the United States.

For the first time, the U.S. has a comprehensive regulatory framework aimed at enhancing trust in stablecoins, encouraging wider adoption, and reinforcing the dollar's global status, Cointelegraph informs.

Key takeaways

- The GENIUS Act establishes a regulatory framework for U.S. stablecoins but leaves out foreign issuers.

- U.S. companies may face a competitive disadvantage as foreign stablecoins grow in prominence.

- Industry experts suggest the Act will drive broader adoption of stablecoins but call for clarity on global regulation.

GENIUS Act marks Milestone for U.S. stablecoin rules

This law is expected to be a significant step toward fostering mainstream acceptance of stablecoins, particularly within the financial industry. According to supporters, the GENIUS Act could serve as a major driver for decentralized finance (DeFi), attract institutional investors, and have a lasting impact on global financial markets, including in developing economies.

However, some concerns remain over the fine print of the legislation, especially regarding foreign stablecoin issuers. While the GENIUS Act introduces crucial regulations for U.S.-issued stablecoins, it leaves a gap by not fully addressing how foreign issuers will be regulated. This omission could place U.S. companies at a competitive disadvantage compared to their international counterparts. As foreign stablecoins become more prominent in global markets, this issue is likely to remain a point of contention among policymakers and market participants.

One of the most pressing unresolved concerns involves the potential for non-U.S. entities to dominate the market while U.S. companies face stricter rules and compliance requirements. Timothy Massad, the former CFTC Chair, has pointed out that the U.S. may find itself at a competitive disadvantage if foreign issuers remain outside the purview of the new rules.

“The foreign issuer loophole was not sufficiently fixed,” Timothy Massad stated.

As industry experts weigh in, there is no doubt that the GENIUS Act is a milestone for the U.S. blockchain sector. According to Christian Catalini, founder of the MIT Cryptoeconomics Lab, the law will push banks, fintechs, and retailers to consider issuing their own stablecoins, integrating them into payment systems and financial services. However, until the concerns around foreign issuers are addressed, questions about the Act's full impact remain.

Conclusion

While the GENIUS Act is a pivotal step for stablecoin regulation in the U.S., the unresolved issues regarding foreign issuers may hinder its full potential. As the Act's impact begins to unfold, its success will depend on how these gaps are addressed in the future.

As we wrote, Trump signs GENIUS Act, launches first stablecoin law in U.S.

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