Stablecoin Act: Genius or Evil?

by

Key Takeaways (because you’re busy):

  • The US Senate passed the GENIUS Act to keep an eye on stablecoins.
  • But, Amundi’s all like, “Hey, this might actually hurt the US dollar‘s feelings.”
  • Stablecoins are growing fast, with a market worth over $254 billion (and counting…).

 

So, the GENIUS Act is a thing now. It’s meant to make stablecoins safer and more trustworthy. But, not everyone’s convinced it’s a genius idea (see what I did there?).

Amundi, the largest asset manager in Europe, is raising some red flags. They think the bill could lead to some major issues with payments and even weaken the US dollar’s dominance. Yikes! 💸

What’s the GENIUS Act, anyway?

It’s a bill that was passed by the US Senate on June 17. In a nutshell, it makes sure that stablecoin issuers have enough collateral to back up their tokens. Think of it like a 1:1 ratio of stablecoins to high-quality liquid assets, like US Treasury bonds.

This is meant to keep the value of stablecoins, well, stable. But, Amundi’s not so sure… 🤔

Amundi’s concerns: Genius or Evil?

Vincent Mortier, Chief Investment Officer at Amundi, is not a fan of the GENIUS Act. He recently told Reuters, “It could be genius, or it could be evil.” 😈

1 backing requirement could boost demand for US Treasuries, which is good, right? But, Mortier warns that this could also show a lack of trust in the dollar’s inherent strength.

“If we need stablecoins to ensure the dollar’s value, what does that say about the dollar itself?”

🤔

He also thinks that companies issuing stablecoins could become quasi-banks, handling billions in deposits and processing payments outside of the mainstream financial system. That could create some major risks that regulators aren’t equipped to handle. 😬

Stablecoins on the Rise

Despite Amundi’s warnings, stablecoins are growing fast. The total market is now worth over $254 billion, with 98% of tokens pegged to the US dollar. 🚀

Analysts at JPMorgan expect the supply of stablecoins to double again in the next few years, and US Treasury Secretary Scott Bessent predicts the market could hit $3.7 trillion by 2030. That’s a lot of stablecoins… 🤯

Recent reporting projects that stablecoins could grow into a $3.7 trillion market by the end of the decade. That scenario becomes more likely with passage of the GENIUS Act.

A thriving stablecoin ecosystem will drive demand from the private sector for US Treasuries, which back…

— Treasury Secretary Scott Bessent (@SecScottBessent)

This growth will likely be fueled by widespread adoption of stablecoins in cross-border payments, defi, and corporate treasuries. So, buckle up, folks! 🚀

Overall, the GENIUS Act is a step towards regulating stablecoins, but Amundi’s warning is clear: it could unlock new problems and create a whole new Pandora’s box of issues for the US dollar. 😳

 

Read More

2025-07-04 15:00