Analytical report: The impact of the GENIUS Law on the cryptocurrency market in 2025-2026

Here is a comprehensive analysis of how the American law “On the Guidance and Establishment of national Innovations for U.S. Stablecoins” (Guiding and Establishing National Innovation for U.S. Stablecoins, GENIUS) literally transforms the crypto market in 2025-2026. We see that the GENIUS law together with the law “On Clarity of the Digital Asset Market” (Digital Asset Market CLARITY Act) has become a real turning point the moment. It helps the American digital asset ecosystem to mature and transform from a platform for retail speculation into a full-fledged financial sector for institutional players. Key findings:

• GENIUS transforms dollar-denominated stablecoins into a regulated, transparent and central element of the financial system. This greatly reduces risks and opens the way for their mass use in payments, transfers, and corporate finance management.
• This kind of regulatory clarity is the main catalyst that we believe will open the floodgates for huge institutional money. The total amount of pension assets in the United States for the second quarter of 2025 is a staggering $45.8 trillion. Imagine: if only 1% of these funds are allocated to digital assets during 2026, this will result in an influx of more than 450 billion dollars. This is what confirms the optimistic forecasts for the price of assets such as bitcoin.
• Some analysts expect its price to reach or exceed $200,000 by the end of 2025 or early 2026.
• The new rules will split the decentralized finance (DeFi) sector in two. On the one hand, the “institutional DeFi” built on regulated stablecoins will grow. On the other hand, there will be increased pressure on anonymous protocols that do not follow the rules.
• The regulatory push from the United States is a strategic move to strengthen the global dominance of the dollar in the digital age. In fact, the United States sets the global standard, forcing Europe, Asia and other regions to adjust their laws to new realities.

Strategic implications: It’s time for market participants to stop maneuvering in uncertainty and start learning new rules. The opportunity now lies in creating a regulated infrastructure, services for institutions, and products that connect traditional and decentralized finance. The main risk for ordinary financial players is not even the technology itself, but competition from crypto companies and fintechs who use these new legal tools to challenge established business models like deposits and payments.

Section 1: The Dawn of Crypto Regulation in the USA: What you need to know about the laws of GENIUS and CLARITY

Let’s figure out how it all started. In this section, we will analyze two iconic laws in detail, explaining not only what they do, but also why they work that way. This will help you understand how seriously the US policy on digital assets has changed.

1.1. The Law of GENIUS: How it creates the future for American payment Stablecoins

The Law of GENIUS (S. 1582), which was signed on July 18, 2025 — this is the first comprehensive federal regulation system for stablecoins in the United States.^{[1][2][3][4][5]} Importantly, it was passed with strong bipartisan support (68–30 in the Senate, 308–122 in the House of Representatives), which shows the political consensus: everyone wants both innovation and consumer protection.^[6] Official purposes of the law — protecting consumers, strengthening the dollar’s global position, strengthening national security, and making America the “undisputed leader in digital assets.”^[7] The law introduces a new category — “Authorized issuers of payment Stablecoins” (PPSI), creating a dual regulatory system.^[8][9] Subsidiaries of banks and specially qualified non-bank issuers are subject to federal supervision. ^[5][10][11] At the same time, issuers with an issue volume exceeding 10 billion dollars are required to comply with federal regulators.^[10][12][13] At the same time, issuers licensed at the state level can work with the issue of up to 10 billion dollars, but only if their state’s rules are recognized as “substantially similar” to the federal ones.^[5][10][14] The cornerstone of the law is, without exaggeration, strict requirements for reserves. Issuers are required to provide stablecoins in a 1:1 ratio with highly liquid assets — mostly in cash dollars and short-term Treasury obligations.^{[3][6][7][9][12][14][15][16][17]} These Reserves must be isolated and cannot be reused as collateral.^[14][18] In addition, issuers are required to publish audited reports every month on, what their reserves consist of.^{[3][6][7][12][14][15]} The law gives holders of stablecoins the priority right to return their funds if the issuer goes bankrupt — this is a key protection measure.^[6][7][12] Issuers are explicitly prohibited from advertising their stablecoins as federally insured and paying interest directly for owning them.^{[5][7][15][19]} Most importantly, issuers are now considered “financial institutions” under the Banking Secrecy Act. This obliges them to implement serious anti-money laundering and anti-terrorist financing (AML/CFT) programs, comply with sanctions and have the technical ability to freeze assets upon official request.^{[5][7][11][14][15][20][21]} Table 1.1: Key provisions of the GENIUS Act

Position Category	Specific Requirement	Rationale / Purpose
The Right to Issue	Creation of a dual federal-state system for “Authorized Issuers of Payment Stablecoins” (PPSI). Federal supervision is mandatory for issuers with a volume of >10 billion USD.	Provide flexibility for small innovators while maintaining strict oversight of systemically important issuers to ensure financial stability.
Reserve Requirements	1:1 backing with high-quality liquid assets (cash, short-term U.S. Treasury obligations). Reserves must be segregated and not subject to re-pledge.	Prevent depegging and insolvency risks by ensuring each stablecoin is fully backed by secure assets, enhancing user confidence.
Transparency	Monthly public disclosure of reserve composition, certified by an independent auditing firm.	Provide full transparency for investors and regulators, preventing fraud and poor reserve management.
Consumer Protection	Priority claim rights for stablecoin holders in issuer bankruptcy; prohibition of marketing implying federal insurance; ban on paying interest.	Protect user funds in case of issuer failure, prevent misleading promotions, and reduce risks of transforming stablecoins into unregulated deposit products.
AML / CFT	Issuers classified as “financial institutions” under the Bank Secrecy Act. Mandatory AML/CFT programs, sanctions compliance, and technical ability to freeze assets.	Integrate stablecoins into the U.S. financial security framework to combat illicit activity and enhance national security.

1.2. The CLARITY Law: Who is responsible for what and how it works

The Digital Asset Market Clarity Act of 2025 (H.R. 3633) finally resolves the long-standing and constraining conflict between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).^{[1][22][23][24]} It creates a legislative framework for classifying digital assets, giving the market that very predictability., which was so much missed.^[6][22][25] The law clearly divides the areas of responsibility, defining the key types of assets. A “digital commodity” is an asset “inextricably linked to the blockchain,” whose value depends on the functionality of the network.^[22][23][26] Assets such as Bitcoin fall under the jurisdiction of the CFTC — They are responsible for spot markets and anti-fraud.^{[1][6][22][23]} On the other hand, the “asset of the investment contract” — It is a digital commodity that was originally marketed as an investment contract to raise money.^[22] The first sale remains a security under SEC supervision. But the law makes it clear: the underlying asset itself is not considered a security and can then be freely traded as a digital commodity on the secondary market. This is a very important legal distinction.^[25][26][27] The law introduces the concept of a “mature blockchain” — one that is not controlled by a single person or group. This is a key milestone.^[23][27] It is he who determines when the insiders of the issuer can sell their assets and when the asset finally becomes a commodity. This is a great incentive for real decentralization.^[22][28] In addition, the law provides for a new registration exemption for small capital charges (up to $75 million) for digital goods, helping startups.^[22][23] And most importantly, it exempts some non-custodial activities in DeFi and software development from registration requirements., protecting the very foundation of a decentralized infrastructure.^[22][28][29]

1.3. Change of course: Why the United States abruptly Fell in love with cryptocurrencies in 2025

The Trump administration has openly declared cryptocurrencies a “national priority,” seeking to make the United States the “cryptocurrency capital of the world.”^[1][7][18] This support is from above, including even the creation of a Strategic Bitcoin Reserve., it shows a fundamental rejection of the skeptical approach of the previous administration, which relied on law enforcement.^{[6][7][18][30][31]} SEC Chairman Paul Atkins and Acting CFTC Chairman Caroline Pham have publicly ended the era of “regulatory squabbles.”, by launching coordinated initiatives like the “Crypto Project” and joint round tables.^[31][32] Chairman Atkins’ Statement that “Most Crypto Assets Are Not Securities”, — This is a landmark reversal compared to the position of the former SEC and a direct follow-up to the spirit of the CLARITY Act.^[32] The cancellation of the Personnel Accounting Bulletin (SAB) 121 additionally allows banks to provide custody services, a critical element of the institutional infrastructure.^[18] The laws of GENIUS and CLARITY are not two separate documents, but part of a single, coordinated strategy. GENIUS provides security at the “frontier” of the crypto ecosystem by regulating entry and exit points (stablecoins) and making them safe for traditional finance. CLARITY organizes everything inside, defining assets and rules of the game. This integrated approach creates a holistic, predictable, and U.S.-based regulatory sandbox designed to attract global capital and innovation. By regulating both the bridge (GENIUS) and the destination (CLARITY), politicians have paved a fully regulated path for the movement of capital from the traditional financial system to digital assets and back. By the way, the extreme detail of definitions in the CLARITY Act (“mature blockchain”, “asset of an investment contract”) and specific rules for issuers in GENIUS is a direct legislative response and a rejection of the “regulation through lawsuits” strategy used by the previous SEC. The ambiguity of the Howey test, which the SEC has used to bring many cases, is being deliberately replaced by legislative clarity. This shift from ambiguous regulation in terms of principles to detailed, understandable rules is a fundamental change in regulatory philosophy. Congress deliberately deprives agencies of the freedom of action that they believe they have used excessively, and instead gives the market what it values most: predictability. And it, in turn, is the main catalyst for long—term investments and innovations. Table 1.2: Distribution of jurisdiction between the SEC and the CFTC according to the CLARITY Act

Asset Type	Main Regulator	Key Regulatory Responsibilities
Digital Goods (e.g., Bitcoin)	CFTC	Supervision of the spot market, registration of intermediaries (exchanges, brokers), combating fraud and manipulation.
Asset of the Investment Contract	SEC (initial sale), CFTC (secondary market)	SEC: Registration of issuer and disclosure during initial offering. CFTC: Supervision of secondary trades after the asset ceases to be a security.
Authorized Payment Stablecoin	Banking regulators (federal/state), SEC/CFTC (for markets)	Banking regulators: Oversight of issuers, reserves, AML compliance. SEC/CFTC: Combating fraud on trading platforms.

Section 2: The Stablecoin Revolution: From the Grey Market to Global Financial Rails

Let’s see how the GENIUS law directly affected its main goal, the stablecoin market. We will look at how regulation has transformed these assets, and what new challenges and opportunities both crypto companies and traditional banks have faced.

2.1. Market impact: More stability, transparency and integration into the mainstream

Strict requirements for 1:1 reserves, audit, and transparency are designed to end once and for all the risks of depegging and bankruptcy that plagued early stablecoins. In fact, they are turning from a speculative crypto tool into a reliable financial infrastructure.^{[6][12][13][21]} Regulatory clarity — that’s the key to mass adoption outside of trading.^[9] Now, with the advent of a legal framework, stablecoins are ready for explosive growth in cross-border payments, money transfers, merchant settlements, and corporate treasuries, where their speed and low cost give them a huge advantage over traditional systems.^{[15][16][17][30]} The volume of transactions has already exceeded the combined volume of Visa and Mastercard in 2024, and this trend is likely, it will speed up.^[9][20][30] The law officially recognizes stablecoins as “payment instruments,” allowing approved issuers to integrate with systems such as ACH, card networks, and FedNow., creating a seamless bridge between traditional and digital finance.^[3][6][21]

2.2. The dilemma of banks: Competition, cooperation and eternal disputes about interest

American banks reacted to the GENIUS law with great caution, pointing to a possible “loophole” that, in their opinion, could lead to systemic risks.^[33] Although the law prohibits issuers from paying interest, banking associations claim that this restriction is easily circumvented by exchanges, brokers and other related parties., which can offer holders of stablecoins some semblance of profitability.^[33][34] The main concern is that if stablecoins become attractive earning tools, they will start working as “less regulated analogues of money market funds.” This can cause a massive outflow of deposits from banks, especially during periods of instability.^[34] And this, in turn, will undermine the basic role of banks in lending, potentially leading to higher interest rates and a reduction in loans for the entire economy.^[33] On the other hand, the law also gives traditional banks a clear path to participate. They can become issuers themselves or act as custodians for the very huge reserves that stablecoins provide, creating new sources of income.^[17] And the cancellation of SAB 121 plays a key role here.^[18] Banks’ fears about the outflow of deposits are not unfounded. They point to a broader trend — the “great separation” of the main banking functions. Stablecoins, combined with DeFi and fintech applications, can now replicate the “value storage” and “payment” functions of a regular bank account, but they do it more efficiently and with potentially higher returns. GENIUS legalizes the stablecoin, which is the foundation for this separation. The Bank provides three main services: value storage (deposits), value transfer (payments) and credit creation (lending). GENIUS makes the “value storage” component (stablecoin) highly reliable and regulated. Fintech companies and DeFi protocols are already bypassing banks in “value shifting.” And the very “loophole” that banks are afraid of will allow third-party platforms to impose income generation services (DeFi lending, staking) on top of a regulated stablecoin, essentially recreating the function of an interest-bearing savings account. It turns out that soon the user will be able to store regulated, dollar-denominated value, move it around the world almost for free and receive competitive income without ever accessing a deposit account in a traditional bank.

2.3. Global impacts: Strengthening the dollar’s dominance in the digital age

Do not be deceived: the GENIUS law is an outright instrument of US economic policy. By creating a reliable basis for dollar-backed stablecoins, it directly stimulates global demand for US Treasury obligations (which form the basis of reserves) and guarantees, that the dollar will retain its status as the world’s main reserve currency in the digital age.^[7][16][35] This move is viewed with concern by strategic competitors. Chinese state media, for example, have already called for accelerating the development of a digital currency backed by the yuan, recognizing that GENIUS can spread the influence of the dollar around the world.^[20][36] In fact, the United States is shaping the future of money as a choice between a private sector model (stablecoins) and a model of, managed by the state (CBDC).^[36] The massive demand for treasury obligations created by the requirements for stablecoin reserves will transform this industry into a new, significant and permanent buyer of US government debt. The implications for U.S. fiscal policy and the global bond market will be profound. Unlike a foreign central bank or investment fund, which may decide to sell their treasury obligations, a stablecoin issuer’s demand for them is directly linked to the volume of its token issuance. The more people who use stablecoins, the more treasury obligations they will have to buy automatically. This creates a constant, growing, and price-independent source of demand for U.S. debt, which can help stabilize yields and provide the government with a powerful new tool to finance deficits.

2.4. GENIUS vs. MiCA: Who sets the tone in the global regulatory race?

While the US has finalized its approach with GENIUS, the European Union has already launched its comprehensive Regulation on Crypto Asset Markets (MiCA), which fully entered into force on December 30, 2024.^[37] This creates an interesting competitive dynamic. MiCA offers uniform, broad rules for all crypto assets, while GENIUS focuses only on dollar-denominated stablecoins.[38] Because of this, regulatory arbitration may arise: companies will choose a jurisdiction for their product. For example, a non-dollar stablecoin issuer would prefer clearer MiCA rules, and American firms working with dollars would find a more direct path to GENIUS. European companies wishing to issue dollar-denominated stablecoins for the global market are likely to seek to match GENIUS in order to gain access to American liquidity. Now that both the US and the EU have set their own standards, financial centers like Singapore and Hong Kong are under pressure. To stay in the game, they will have to accelerate the adoption of their own laws, harmonizing them with elements of both GENIUS and MiCA.^[39]

Section 3: Analysis of the overall market impact for 2025-2026

Now let’s take a look at the big picture. In this section, we will bring together market data and regulatory developments to predict how the ecosystem will evolve in the next two years.

3.1. Opening the floodgates: Forecasting the inflow of institutional capital

Until 2025, regulatory uncertainty was the main drag on institutional investment.^[6][31] The laws of GENIUS and CLARITY remove this barrier, providing legal certainty and the necessary infrastructure (for example, regulated custodians, clear classification), without which institutions do not risk investing serious money.^[17][31] Surveys are already recording a massive shift: 86% of institutional investors plan to invest in cryptocurrencies, compared to 40% in 2022.^[31] The approval of spot Bitcoin ETFs has already attracted over $148 billion in net inflows, and regulatory clarity for the underlying markets should dramatically reinforce this trend.^[40] The new regulatory framework makes it possible to create products for institutions that go far beyond simple ETFs., — including derivatives, structured products, and asset management services on a secure basis.^[18][31]

3.1.1. Quantification of institutional demand and price justification

The bitcoin price forecast of $200,000 is based on the expected influx of institutional money, for which a regulatory path has now been paved. GENIUS (providing secure stablecoins) and CLARITY (legalizing spot markets) open the doors to giant pools of capital such as pension funds. Total pension assets in the United States for the second quarter of 2025 — $45.8 trillion. Surveys show that 59% of institutional investors plan to allocate more than 5% of their assets under management to digital assets.^[41] Even if they send only 0.5% to 1% from this pension pool., This will result in inflows of $229 billion to $458 billion during 2026. This new demand, combined with continued inflows into ETFs and the declining supply of bitcoin after halving, creates a powerful engine for price growth, which makes the forecast of $200,000 quite realistic.

3.2. Bitcoin and Core Assets: Price Forecasts and Sentiment Analysis in a Regulated Environment

At the end of 2025, the market is in a strong bull cycle after halving. Bitcoin reached a historic high of about $123,000 in July 2025 and is now consolidating around $112,000 (September 2025).^[42] The capitalization of the digital asset market exceeds $3.5 trillion.[1] Large financial institutions, for the most part, are optimistic about the period 2025-2026, citing institutional implementation and supply constraints. Forecasts for bitcoin vary greatly, but the general trend is growth. Standard Chartered and AllianceBernstein expect $200,000 by the end of 2025, while JPMorgan gives a more conservative estimate of $126,000.[42][43] Forecasts for 2026 are even more diverse: from consolidation in the range of $100,000-$200,000 to more aggressive targets of $300,000 or even cycle peaks approaching $500,000.[42] consensus calls the continued strong demand from ETFs and “whales” (large holders), as well as the influx of new institutional capital, the main drivers., unblocked by regulatory clarity.^[40][42][43] Table 3.1: Summary forecasts of bitcoin prices, 2025-2026

Financial Institution / Analyst	Forecast for End of 2025	Forecast / Prospects for 2026	Key Declared Drivers
Standard Chartered	$200,000	Steady growth	Institutional implementation, exceeding previous conservative estimates.
AllianceBernstein	$200,000 (by September 2025)	Long-term goals $500,000–$1,000,000	Strengthening institutional demand.
JPMorgan	$126,000	–	Record low volatility, growing institutional interest.
Bernstein	–	$200,000 (by early 2026)	–
Stock-to-Flow (PlanB) model	–	Average cycle price up to $500,000	A halving-based scarcity model.
Various analysts (moderate scenario)	$140,000–$150,000	$120,000–$300,000	Technical analysis, structural factors, the return of the “whales”.

3.3. DeFi Crossroads: Navigating compliance and Attracting Institutional Liquidity

The emergence of regulated, fully secured and transparent stablecoins is a huge gift for DeFi. These assets serve as stable and reliable collateral, reducing systemic risks in lending and borrowing protocols and making them more attractive to institutional money.^[13] However, GENIUS’ requirement to comply with AML/CFT and the ability to freeze assets fundamentally contradicts the permissionless nature of “pure” DeFi, which is most likely, it will split the ecosystem in two.^[13][44] We expect a rapid growth of the so-called permitted or “fenced” DeFi sector. These protocols will use appropriate stablecoins, implement identity verification (KYC/KYB), and serve primarily institutional clients who value compliance. href=”https://www.skylinedigital.xyz/blog-posts/how-will-the-genius-act-affect-defi-businesses-and-investors ” target=”_blank”>[13] At the same time, the special exemption in the CLARITY Act for non—custodial software developers is an important protective measure. It protects the very essence of innovation in DeFi, ensuring that simply writing and publishing code is not considered a regulated activity. This allows the basic, non-permissive layer to continue to evolve.^[28][29]

3.4. Venture Capital Strategy: Reassessment of risks and opportunities in the risky US market

Now that the regulatory risk in the United States, which used to be the main threat, has significantly decreased, the strategy of venture capitalists is changing. Investments are flowing from projects designed for regulatory arbitration to those who are building a long-term, the required infrastructure.^[6][18][31] Venture capitalists are increasingly funding the “picks and shovels” of the new regulated ecosystem: custodial solutions for institutions, tools for on-chain identification and compliance, regulated stablecoin issuers themselves, and platforms connecting TradFi and “institutional DeFi.” The United States, having turned from a hostile environment into a favorable one, is now ready to attract the lion’s share of global venture financing into the cryptosphere, perhaps, by reversing the trend towards the outflow of innovations abroad.^[6][31][45] Interestingly, the market dialogue itself is shifting. Until 2025, the main issue for institutions was “Why should we invest in cryptocurrencies?” (debates about legitimacy and risk). After GENIUS and CLARITY, the question sounds different: “How do we invest in cryptocurrencies?” (a matter of logistics and strategy). This shift means the maturation of the asset class. The focus is no longer on survival, but on integration. However, regulation has a downside: it increases the cost of doing business. The strict requirements of AML/CFT, auditing, and jurisprudence under the GENIUS Act create a high barrier to entry for new stablecoin issuers. This may lead to a consolidation of the market around several large, well-capitalized players (probably from traditional finance) who can afford the cost of compliance. As a result, the stablecoin market may follow the path of the credit card market, dominated by a small number of large, regulated networks. This will create a “compliance ditch” that protects existing players, but limits competition from small innovators.

Section 4: Global context: U.S. Regulation versus international norms

Let’s now look at these changes on a global scale. We will compare the American approach with other major regulatory frameworks and predict how this will affect international capital flows and competition for leadership.

4.1. Comparative analysis: The GENIUS Law against the European MiCA Regulation

The EU Regulation on Crypto Asset Markets (MiCA), which fully entered into force on December 30, 2024, — These are comprehensive uniform rules., covering all crypto assets and Service Providers (CASP).^{[46][38][47][37]}[48] MiCA regulates stablecoins in two categories: tokens linked to assets (ART), and electronic money tokens (EMT).^[38][49] Just like GENIUS, it requires full backup and authorization from issuers.^[37][49] But there are also key differences. MiCA is a broad, comprehensive framework, and the US uses a separate approach with different laws for stablecoins and market structure. MiCA stricter defines who can issue e-money tokens (mainly credit institutions), while GENIUS opens the way for licensed non-bank issuers.^[10][49] Importantly, MiCA does not have a comprehensive regime for third countries, this makes it difficult for European clients to work with non-European firms without a local presence. But GENIUS includes a special (albeit strict) reciprocity regime for foreign issuers.^[5][10][48] Table 4.1: Comparative Regulatory Analysis: EU GENIUS Law against MiCA (Stablecoins) A dual system: federally or state-licensed banks and non-banking institutions.EMT: Only credit institutions or electronic money institutions. ART: Any legal entity that has received a permit.

Regulatory Aspect	The GENIUS Act (USA)	MiCA Regulation (EU)
Definition	A “payment stablecoin” pegged to the US dollar.	“Electronic Money Token” (EMT, linked to a single fiat currency) and “Asset-Linked Token” (ART, linked to a basket of assets).
Issuer’s Authorization	Mandatory federal/state registration for all major issuers.	Requires licensing under MiCA for EU operations.
Reserve Requirements	1:1 provision of high-quality liquid assets (cash, US Treasury obligations).	Full backup. For EMT, reserves must be invested in safe, low-risk assets.
Access for Foreign Issuers	Strict reciprocity regime allows operation in the US while meeting comparable standards.	No comprehensive regime for third countries; requires creation of a legal entity in the EU to serve EU clients.
Prohibition on Interest / Profitability	Issuers are explicitly prohibited from paying interest or profitability.	EMT issuers are prohibited from paying interest. ART issuers have no such restrictions.

4.2. Asian Response: Regulatory changes in Hong Kong and Singapore

Asian financial centers such as Hong Kong and Singapore are actively competing for business in the field of digital assets, creating clear licensing regimes that try to balance innovation and investor protection.[3][39] Hong Kong has implemented a Regulation on Stablecoins, and its licensing regime started on August 1, 2025. It largely reflects the principles of GENIUS, requiring full asset security and licensing from the Hong Kong Monetary Authority.^[3][50] Singapore’s FIMA Law, fully effective by January 2025, strengthens the supervision of the Monetary Authority of Singapore over the entire digital asset space.^[3] Despite their innovation, these Asian centers will now face pressure: they will have to harmonize their rules with the American base so that their institutions do not lose access to deep liquidity and capital of the US market.^[39]

4.3. Forecasting global capital flows and jurisdictional competition

Thanks to the new regulatory clarity, the United States is ready to become the main point of attraction for businesses in the field of digital assets and institutional capital in 2025-2026. Firms that value legal certainty and access to the world’s largest economy will be attracted here.^[6][7][36] While the US is likely to dominate institutional finance, other jurisdictions may occupy niches., by offering more lenient rules for specific types of activities. Due to the size of its market and the extraterritorial reach of its rules, the GENIUS standards for stablecoins are likely to become the de facto global benchmark that all serious international projects will have to follow.^[5] Interestingly, the simultaneous introduction of large regulatory frameworks in the US and the EU creates competitive dynamics that lead to a “race to the top” in compliance standards. In order to operate globally, a digital asset firm can no longer look for a jurisdiction with the weakest regulations. Now it must build its infrastructure in such a way as to meet the most stringent requirements of the main markets. In fact, the global landscape is divided into three competing models of the future of money: American (government-controlled private sector), Chinese (government control, direct access) and crypto-native (decentralized). GENIUS is a powerful step to strengthen the American model, making it the most viable and scalable alternative to the government model for countries that value open markets.

Section 5: Strategic forecast and recommendations for 2025-2026

In this final section, we will compile all the analysis into promising scenarios and provide practical recommendations for key market players so that you can make informed decisions.

5.1. Key opportunities and hidden risks for market participants

Features:

• Services for institutions: Huge potential in the creation of regulated custodial, prime brokerage and asset management services.
• Innovation in payments: Fintechs and traditional payment systems can use regulated stablecoins to create next-generation solutions for payments and settlements.
• Regulatory Technologies (RegTech): A rapidly growing market of solutions that provide on-chain AML/KYC, transaction monitoring and automated reporting.

Risks:

• Regulatory frictions: Despite the clarity, the implementation phase (when agencies write specific rules) can still create operational difficulties.^[8][44]
• Excessive consolidation: “Compliance” can stifle innovation and lead to anti-competitive behavior on the part of several large issuers of stablecoins.
• DeFi infection: Although “institutional DeFi” will be safer, the unregulated, “clean” DeFi space is not going anywhere. A crash in this segment can still damage reputation or even have financial consequences.
• Tax uncertainty: Current laws do not affect the taxation of cryptocurrencies. They are still classified by the Internal Revenue Service (IRS). as a property, that remains a serious headache.^[51][52]

5.2. Promising scenarios of market evolution

• Bullish scenario (high adoption): Stablecoins seamlessly integrate into the financial mainstream. The inflow of institutional capital is exceeding expectations, supporting a sustained bull market through 2026. The United States is becoming established as the undisputed world leader, and “institutional DeFi” is becoming a multi-trillion dollar sector.
• Base case (stable integration): The period 2025-2026 is a time of construction and integration. Institutional implementation is stable, but not rapid. The market is going through a healthy cycle, reaches the predicted price levels, and then consolidates. DeFi is being divided, and the US is actively competing with Europe and Asia.
• Bearish scenario (implementation failure): Agencies are slow to write rules, they turn out to be contradictory or too burdensome, which stifles innovation. The banking lobby is managing to push through new laws closing the “interest rate loophole,” and stablecoin-based products are losing their appeal. A major hacker attack on an authorized issuer undermines trust and slows down institutional adoption.

5.3. Effective recommendations for stakeholders

• For institutional investors: The time to wait has passed. Start building up your internal expertise and operational readiness. Focus your first investments on established assets like bitcoin through regulated instruments (ETFs) and explore pilot programs in the developing “institutional DeFi” with reliable partners.
• For crypto-oriented firms (exchanges, DeFi protocols): Your number one priority is compliance. Conduct a thorough gap analysis according to GENIUS and CLARITY. DeFi protocols need to decide strategically whether to target the institutional/relevant market or stay in the permissionless space. Exchanges should actively invest in oversight and reporting capabilities to meet institutional standards.
• For traditional financial institutions (banks, asset managers): This is the “transform or be transformed” moment. Actively develop your digital asset strategy. It can be anything from offering custodial services and investments in basic technologies to launching your own stablecoins and integrating them into your payment and treasury services. Do not underestimate the threat from the new, regulated and efficient financial rails on stablecoins.
• For venture capitalists: Shift the focus to B2B and infrastructure layers. The biggest returns in 2025-2026 are likely to come from companies that address the complex challenges of compliance, security, and institutional access in this newly regulated U.S. market.

5.4. Roadmap for traditional banks (2025-2026)

Integration with FedNow/ACH: Actively integrate stablecoins (via new regulatory rails) with existing payment systems to offer faster and cheaper cross-border transactions.

The Threat (GENIUS)	Strategic Reaction (Action)
Deposit Outflow	Creation of a PPSI subsidiary: Use the GENIUS Act to become an issuer of a regulated stablecoin itself and offer tokenized deposits to hold client funds.
Technological Lag	Partnership with DeFi Protocols: Instead of competing, invest or partner with “Institutional DeFi” protocols built on regulated stablecoins to offer competitive returns to customers.
Competition for Payments	Integration with FedNow/ACH: Actively integrate stablecoins (via new regulatory rails) with existing payment systems to offer faster and cheaper cross-border transactions.