GENIUS Act sparks US optimism while global voices urge caution

The GENIUS Act was passed by the US Senate in the summer of this year, and Silvina Moschini, a serial entrepreneur based in the US, felt vindication. SheWorks! co-founder and Unicoin! The co-founder of Unicoin and SheWorks!

The GENIUS Act, signed into law in December 2015, established the first comprehensive framework for US stablecoins. Cointelegraph, a web3 news outlet, reports that supporters claim it will increase trust, encourage mainstream adoption, and strengthen the dollar’s position as the world reserve currency. wrote An article published on August 1st, 2006, explains the importance of a good education.

Stablecoins are gaining traction across the globe, so the GENIUS Act may also be a boon for developing countries, attract institutional attention and spark a resurgence in DeFi. Cointelegraph noted that concerns still remain about issues such as foreign issuer regulation, doubts regarding the ban of yield-bearing stabilizecoins, and potential dominance by corporate and traditional financial players.

‘Brings legitamacy to the space’

Moschini stated that “the GENIUS Act” is the most significant piece of legislation in the crypto economy. It brings legitimacy to this space, a set of clear rules and allows entrepreneurs to compete in an environment that is fair and equal.

For Moschini the new framework turns stablecoins, which were a regulatory headache for her team, into a basis for growth. Her team, led by Gary Gensler, had a series of run-ins under the SEC. They continued to design Unicoin keeping compliance in mind. She said, “We followed all the rules.”

Her business is more than just a compliance milestone. The Act, which mandates fully backed and licensed US stablecoins, is much more. This marks the beginning of a new era in financial inclusion.

“We are confident that we can bring the innovations that have been developed offshore to the U.S. which is currently the largest economy on the planet,” says she. This act is the catalyst for a new wave in innovation. It is not about getting rid or regulation, but about having the correct regulation. “And now we have.”

Moments of transformation

According to LinkedIn, Niall Dennehy frames the legislation across the Atlantic as a much-needed turning point. post.  He says that this is one of the biggest moments in fintech regulatory history. “Until now stablecoin issuers have operated in a grey zone. The GENIUS Framework changes that.”

Transparency is a key feature of the Act, which requires full reserve backing, regular disclosures, and U.S.-specific licensing. He says, “This is the dawning of truly transparent money.” “For the very first time, any user is able to verify the solvency of the system in real-time.”

Stablecoins are a great way to make cross-border payments. They can also be used for embedded finance and programmable currency. Dennehy encourages startups to concentrate on their product and growth, rather than building up regulated infrastructure. “A compliant financial institution is not going to give you a competitive edge. Let partners take care of the regulatory burden so that you can focus on your core mission, product and growth.

Other people are more cautious

But while some Americans are celebrating, others are cautious. Rodney Prescott has worked in the payments and regulatory technology industry for decades. He views the Act less as a neutral rulebook, and more as a tool for monetary influence.

He said that the Genius Act was not very different from a deposit requirement. Stablecoin issues must have liquid U.S. assets, such as Treasuries. This is in line with traditional banking regulations.

He warns of the consequences, which are a further strengthening of U.S. dollars dominance. Prescott stated that the goal was to give dominance to US dollars. Dollar-backed stablecoins can replace local currency in countries with weak or volatile currencies. “If U.S. Dollar-based Stablecoins continue to be the stablecoins of choice, all sovereign monetary policy is basically undermined.”

The barriers for issuers outside of the U.S. are steep. If you are a European startup, or an issuer on a smaller market and want to issue a stablecoin based on the dollar under this Act, then you would need to have U.S. Treasury bonds, as well as possibly meet U.S. Banking requirements. Prescott continued, “That creates an extremely high barrier to entry.”

Prescott draws parallels to Charles de Gaulle’s warning about “exorbitant privileges” of the US dollar. if large corporations like Amazon or Walmart issue dollar-backed coins, he said “we could be looking at a payment system that is directly tied to U.S. Treasuries.” That’s not neutral infrastructure. This is a geopolitical change.

This act leaves a critical gap in security

The Act also leaves a critical gap in cybersecurity.

YevheniiaBroshevan is the Ukrainian cofounder of Hacken, a blockchain security company. She warns that there are few laws in Ukraine which address the digital foundations for the stablecoin eco-system. tweet On X.

She added: “Code Integrity, operational resilience, and incident response are not included in the Act.” If stablecoins were to be trusted infrastructure, security couldn’t be ignored.

Broshevan’s concern highlights an apparent paradox. The Act considers stablecoins to be systemically important, requiring full reserves. However, it does not take into account the technical resilience and security of the systems which hold them or move them. One vulnerability can have cascading consequences, no matter how well collateralised the tokens may be.

A mirror and a milestone

Moschini, who is a major supporter of this Act, acknowledges that enacting the law is only the beginning. The policy must be implemented in a way that delivers on its promise. The GENIUS Act establishes a basis for regulated stabilcoins. But its impact depends on the execution by issuers, regulators, as well as in the code.

“It is a milestone as well as a mirror,” said the Irish author who won an award. “It shows America’s desire to be the leader in digital currency on its terms. The next steps, both onshore and offshore, as well as deep in the code, will determine if this leadership stabilizes or disrupts global financial systems.