The GENIUS Act has created a comprehensive U.S. federal regulatory framework for stablecoins, prioritizing their use as payment instruments rather than investment vehicles. This legislation distinguishes between payment-focused stablecoins and yield-bearing variants while emphasizing real-time settlement capabilities and low transaction costs for everyday commerce.
The approach aligns closely with the European Union’s Markets in Crypto-Assets (MiCA) framework, promoting international regulatory consistency. Retail consumer adoption has surged, evidenced by a 190% increase in small stablecoin payment volumes as their utility expands beyond traditional crypto trading.
Simultaneously, tokenized money market funds have gained significant traction as yield-generating products. These investment vehicles offer 4–5% returns backed by U.S. Treasuries, presenting alternatives to yield-bearing stablecoins. DeFi protocols benefit from the regulatory clarity, enabling innovative non-payment applications within compliant parameters.