The GENIUS Act aims to prevent tech giants and Wall Street from dominating the stablecoin market. Non-banks must create a standalone entity, comply with antitrust rules, and face Treasury Department oversight. Banks issuing stablecoins must keep them separate with no risk-taking. The bill also bans yield-bearing stablecoins and introduces criminal penalties.

The GENIUS Act, passed with bipartisan support, gives the dollar “rules-based” firepower in the global digital-currency race. Crypto gains legitimization and regulatory clarity in the US, allowing for competition. The law preserves state money-transmitter laws but requires a national trust-bank charter for assets over $10 billion, while banning interest-bearing stablecoins.

The ban on yield-bearing stablecoins under the GENIUS Act could drive investor demand toward Ethereum-based DeFi platforms. Without interest incentives, DeFi becomes a primary option for generating passive income onchain. Analysts predict a surge in institutional capital flowing into DeFi, particularly on Ethereum, as retail users seek alternative yield opportunities.

Read more at Cointelegraph: GENIUS Act Blocks Big Tech From Dominating Stablecoins: Circle Exec