Genius Act to Transform Stablecoin Landscape
Fabian Dori, the chief investment officer at Sygnum, believes the Genius Act is set to reshape the Stablecoin market by steering issuers towards payment-centric use cases—distinctly away from other functions.
“The Genius Act has recently been updated to clearly differentiate between interest-bearing stubcoins and those intended for payments,” Dori mentioned during a discussion with Cointelegraph. This adjustment, he adds, aligns the US framework more closely with EU regulations (MICA) and paves the way for a “global consensus.”
According to Dori, the real effect of innovative behavior surpasses sheer regulations. “By providing long-term clarity, we will empower organizations and publishers, fostering original and creative ‘killer apps’ that not only meet current customer needs but also spark demand for entirely new services—inclusive of payments,” he explained.
This growing confidence seems to correspond with a rising demand. Major players like MasterCard and PayPal are laying the groundwork for compliant Stablecoin usage, while companies such as Amazon and Walmart explore applications for payroll and cross-border transactions.
Dori highlighted that tokenized money market funds could cater to investors seeking returns. These funds currently yield 4-5% from U.S. Treasury-backed products, maintaining a clear distinction between investment and utility.
Shift Towards Utility
In light of the limited appeal of current interest-bearing stubcoins, issuers are expected to pivot towards features like real-time payments and low transaction costs, making integrations more streamlined within trading and payment systems.
“Utility seems to currently outweigh yield,” stated Jason Lau, chief innovation officer at OKX. He argued that in this competitive arena, publishers will likely continue to innovate and encourage adoption of new use cases.
Lau also noted that the efficiencies brought by Stablecoins in terms of settlement and cross-border transactions are expected to facilitate actual commercial dealings, especially with interest from payment giants such as PayPal and Stripe.
Meanwhile, Aishwary Gupta, global payments director at Polygon Labs, indicated that the shift towards utility was already in progress before the Genius Act came into effect.
Gupta observed a notable rise in payment-focused Stablecoin usage, which saw a 67% increase from February to June, reaching $110 million. He stated that “Regulatory compliance can help, but the priority should be to meet genuine market demands. Payment use cases address real issues for users, like cross-border transfers and day-to-day commercial transactions.”
Importance of Retail Adoption
Despite these changes, retail adoption remains vital. “It’s not the Fintech innovations that drive the shift; it’s how consumers engage with them,” Dori explained, stressing that a user-friendly platform will significantly influence the pace of Stablecoin integration.
Gupta also emphasized retail adoption, noting that Polygon focuses on creating Stablecoin infrastructure that supports practical applications, including minimizing fees for micropayments and enhancing performance for larger transactions that need to handle high volumes.
Polygon believes it is gaining traction in both retail and B2B payment integrations. They are collaborating with companies that handle 185 million phone transactions across Africa to enhance cross-border B2B payments.
“One of our partners has around 70 to 80 million wallets ready to launch,” he noted. “Polygon’s small payments, ranging from $100 to $1,000, increased by 190% from February to June, surpassing $563 million. We anticipate this trend will continue to grow in the coming months.”
Meanwhile, Lau suggested that the Defi protocol could benefit significantly from this clarity, as stubcoins currently support a substantial amount of chain activity. “While there’s a focus on synthetic yields and governance tokens, the potential to provide unique and compelling use cases can capture a stable demand,” he added.
Recently, the act was approved with more than 300 votes in favor, including backing from 102 Democrats.
