In June 2025, the U.S. Senate passed the GENIUS Act with bipartisan support. At the time of this article, the House had yet to vote, and President Trump had expressed a desire to sign stablecoin legislation by August. Here is what the proposal sought to establish and why it mattered beyond the United States.

What is the GENIUS Act?

GENIUS stands for "Guiding and Establishing National Innovation for US Stablecoins." As the name suggests, it embodies America's commitment to leading innovation in the stablecoin sector and establishing proper standards.

Stablecoins are digital tokens designed to maintain a value linked to an asset such as the U.S. dollar. Unlike Bitcoin, they target price stability, although the ability to maintain that value depends on their structure and operation.

The proposal sought to replace a fragmented regulatory landscape with a clearer federal framework for payment stablecoins.

🔍 Key Points of This Legislation

A federal framework for issuers

• Stablecoin issuers must back their tokens 1:1 with dollars or liquid assets like short-term treasuries

• Monthly disclosure of reserve holdings is mandatory

• Major federal agencies including the OCC (Office of the Comptroller of the Currency) and Federal Reserve gain supervisory authority, bringing clarity to previously ambiguous regulatory environment

• Large issuers with over $10 billion will be directly supervised by the Federal Reserve or OCC, while smaller issuers fall under state regulation

Greater clarity for institutional participation

• Digital currencies now officially become part of the financial system

• Regulations for investor protection and consumer trust (accounting audits, bankruptcy protections, etc.) are introduced

• This enables more active participation from institutional investors and major financial institutions

• Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements match those of traditional financial institutions

More competition and new services

• Previously dominated by a few companies like Tether (USDT) and Circle (USDC), the market now opens to banks

• Clear regulatory environment enables entry of various new issuers including banks

• Innovative financial services based on stablecoins—payments, remittances, asset management—are expected to rapidly expand across the US

• More competition could improve the range and quality of services available to users.

Implications for the dollar’s global role

• With over 99% of stablecoins pegged to the US dollar, this legislation will further cement the dollar's crucial role in the digital realm

• By leading with clear regulations and consumer protection standards, the US can strengthen its dominance in the global cryptocurrency market

• This will further solidify the dollar's position within the global digital financial order

How Will Banks Change?

New opportunities for banks

• Traditional banks can now officially enter stablecoin issuance and related businesses through subsidiary establishment procedures

• Integration with existing financial infrastructure enables innovative service launches

Additional compliance responsibilities

• Banks must comply with the same level of regulations as traditional financial institutions: AML, reserve management, accounting audits, etc.

• Large issuers with over $10 billion will be directly supervised by the Federal Reserve or OCC

Changes to market structure

• Competition among banks, fintech companies, and existing stablecoin firms will intensify, leading to diverse innovative services in payments, remittances, and asset management

• Greater stablecoin adoption could increase demand for short-term Treasuries and shift some funding away from bank deposits, creating new considerations for traditional financial markets.

• Banks need advance preparation including subsidiary establishment and internal infrastructure upgrades for stablecoin business entry

What Impact Will This Have on Korea?

Implications for Korean regulation

• The GENIUS Act establishes clear standards for US stablecoin issuance and operations (1:1 reserves, federal supervision, AML/KYC), serving as a global regulatory benchmark

• Korea's discussions on the Digital Assets Basic Act and won-denominated stablecoin legislation are intensifying, with strong momentum to benchmark US legislation

• Domestic exchanges and companies handling US-issued stablecoins face growing pressure to voluntarily adopt US-style compliance management and investor protection standards

Won stablecoins and monetary sovereignty

• Excessive proliferation of dollar-based stablecoins could burden Korea's economy through weakened won (KRW) demand, increased exchange rate volatility, and foreign currency outflows

• Korean government and National Assembly must accelerate responses including won-denominated stablecoin issuance and Digital Assets Basic Act enactment to protect monetary sovereignty

• The June proposal from Representative Min Byung-deok would permit approved companies with at least KRW 500 million in capital to issue won-denominated stablecoins under Financial Services Commission oversight.

Alignment with international standards

• With strong US regulatory introduction, Korea needs to align its legal framework to minimize regulatory arbitrage with global standards

• Overly strict regulations could drive domestic issuance and distribution demand overseas, requiring balance between market competitiveness and regulatory harmony

• Detailed adjustments suited to domestic conditions are needed for key issues like reserve requirements and interest payment prohibitions, similar to the US GENIUS Act

• Workable entry requirements could encourage responsible private-sector participation.

Opportunities for new financial services

• The GENIUS Act brings the stablecoin industry into the mainstream, promoting market entry by banks, fintech companies, and global enterprises

• Korea must rapidly advance innovative services and digital asset industry development based on stablecoins—payments, remittances, asset management—to restore competitiveness

SOOHO.IO’s contribution

The GENIUS Act debate has implications for digital asset markets beyond the United States. Korea’s response will need to balance monetary sovereignty, consumer protection, and competitiveness while reflecting local market conditions.

SOOHO.IO works across stablecoins, cross-border payments, and CBDC infrastructure in Asia-Pacific. Its Touchstone platform brings together Reagent security technology and the C2CC cross-chain protocol to help institutions develop blockchain services with security and operational requirements in mind.

Speak with SOOHO.IO about the infrastructure your organization needs for digital finance.

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