GENIUS Act: A Regulatory Watershed for Stablecoins; a Signal for Web3’s Future

By Vishwesh Iyer

The recent passage of the GENIUS Act by the US Senate is being hailed as a watershed moment for the digital asset ecosystem, with leading voices across the Web3, blockchain, and fintech sectors calling it a long-awaited step toward integrating stablecoins into the regulated financial system. The bipartisan bill lays down the first comprehensive federal framework for the issuance, backing, and disclosure of stablecoins — cryptocurrencies pegged to fiat currencies like the US dollar.

More than a legislative milestone, the GENIUS Act is being interpreted as a signal that the regulatory tide is turning in favour of responsible innovation and institutional adoption of decentralised technologies.

A Framework for Trust and Compliance

Fahmi Syed, President of the Midnight Foundation, describes the GENIUS Act as “a major moment for the digital asset ecosystem,” emphasising that innovation in crypto must be balanced by pragmatic oversight. “Privacy and compliance must coexist,” he says. “This bill offers a clearer framework for how that balance can be achieved, particularly for projects that are building infrastructure designed to serve both individuals and institutions.”

The Midnight Foundation is among several entities building privacy-enhancing technologies on blockchain networks. For Syed and others, the bill provides long-awaited regulatory certainty that could accelerate mainstream adoption of privacy-preserving Web3 applications.

Beyond Dollars on Chain: Rethinking the Financial Stack

James Strudwick, Executive Director of the Starknet Foundation, argues that the GENIUS Act must not dilute the core values of decentralisation. “If regulated stablecoins are going to be part of the future financial system, then secure, auditable, and credibly neutral on-chain settlement becomes non-negotiable,” he notes.

Strudwick cautions that while the Act sets important guardrails, the real promise of stablecoins lies not just in tokenising fiat currencies, but in enabling a “new financial stack” that is open, programmable and censorship-resistant. “That only works if we protect the foundational principles of crypto,” he adds, urging regulators to embrace infrastructure that moves away from “opaque intermediaries” and toward on-chain verifiability.

Unlocking the Next Chapter: Real-World Assets and DeFi

For Darren Carvalho, Co-Founder of MetaWealth — a Web3 platform focused on tokenised real estate — the GENIUS Act may be just the beginning. “This legislation could also serve as a blueprint for regulating other DeFi technologies— particularly tokenised real-world assets (RWAs),” he says.

Carvalho notes that while RWAs are gaining traction for enabling fractional ownership and passive income streams, they currently sit in a regulatory grey zone. The GENIUS Act, with its provisions around liquidity, reserve backing, and public disclosures, could provide a template for expanding regulation to cover these new asset classes. “As innovation outpaces regulation, as we have seen with stablecoins, the need for comprehensive guidance becomes ever more critical,” he concludes.

From Grey Zones to Systemic Infrastructure

Yi Luo, CEO and Co-Founder of Eunice AI, a fintech firm building AI tools for the digital asset space, views the Act as a reclassification of stablecoins from experimental instruments to systemic infrastructure. “This legislation introduces a regulatory logic that places stablecoins within the broader financial infrastructure conversation,” she explains.

Yet, Luo warns that the real test lies in implementation. “Disclosure requirements are only as good as the systems that deliver and validate them. Static PDFs on issuer websites won’t cut it in markets that move 24/7.” She calls for a complete rethink of how financial information is surfaced and monitored in real-time. “This means going beyond just upgrading what exists—building a new layer of digital infrastructure that’s fit for an always-on, tokenised economy.”

What Comes Next?

The GENIUS Act still awaits final passage through the US House of Representatives, but President Trump has already signalled his intention to sign it into law. Once enacted, it will take effect either 120 days after implementing rules are finalised or 18 months after passage, whichever comes first.

For the industry, however, the GENIUS Act is more than a regulatory text — it is a litmus test for the future of tokenised finance. If implemented effectively, it could pave the way not only for safer and more trustworthy stablecoins, but also for a broader regulatory architecture that enables the next generation of blockchain-powered financial services.

As developers, regulators, and investors now turn their eyes to how the Act will be operationalised, one thing is clear: Web3 is stepping into the regulatory spotlight — and the expectations are higher than ever.