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Introduction of the GENIUS Act: The GENIUS Act, signed into law by President Donald Trump in July 2025, establishes the first federal regulation for stablecoin issuance and usage in the U.S. banking system.
Market Impact and Growth Projections: The legislation is expected to enhance payment system efficiency and could lead to a significant increase in stablecoin adoption, with market growth projected to reach $4 trillion by 2035.
Regulatory Framework: The Act restricts stablecoin issuance to specific entities and introduces strict reserve and reporting requirements, aiming to stabilize the financial system while balancing innovation and security.
Influence on Financial Markets: The introduction of the GENIUS Act may channel funds into U.S. Treasury securities, impacting liquidity profiles and bank asset demand, as noted by financial institutions like JP Morgan and Standard Chartered.
