The recent amendment of the GENIUS Act will change the strategy of the stablecoin industry towards payments rather than yield. Fabian Dori, Chief Investment Officer at Sygnum Bank, believes that there is now much-needed clarity thanks to this law, which will enable a more utility-driven digital asset ecosystem.
Dori said, “This update makes a strong distinction between stablecoins that are used for the generation of interest and those that are solely designed for payments.” According to him, this rule will bring America in harmony with Europe’s MiCA rule. MiCA is an acronym for Markets in Crypto-Assets. It will contribute toward global regulatory harmonization.
However, the GENIUS Act can do more than just compliance. The act removes uncertainty that discouraged innovation, paving the way for possibly the largest ‘killer app’ payment applications. Such applications are likely not just to serve an existing need but to usher in demand for a new service that is unlikely to exist—in real-time payments and cross-border transfers.
Major companies are already preparing for this shift. Payment firms like Mastercard and PayPal have been planning for regulatory-compliant stablecoin integrations. Also, tech and retail firms like Amazon and Walmart are considering stablecoin use for payroll and cross-border payments.
Dori recommends tokenized money market funds for the investors still looking to earn some interest.
These funds are more stable than other collateralized products, daily available and yield 4–5%. U.S. Government bonds are investment instruments and not utility.
As stablecoin issuers adapt to new regulations under the GENIUS Act, they will focus on fast, low-cost, and programmable payment solutions. “The utility beats yield now,” according to OKX’s chief innovation officer Jason Lau, which will see competition spurring stablecoin providers to offer users financial products.
Aishwary Gupta, Polygon Labs’ head of payments and fintech, defined the shift to utility as already happening prior to the legislation. Between February and June, micropayment volumes on Polygon rose by 67% to $110 million, marking growing interest in stablecoin use cases with payment functionality, he said.
Conclusion
The GENIUS Act significantly changes the way stablecoins are built, regulated, and used. It helps the U.S. regulation to interface with international norms while urging revamped innovation in the space of digital payments. With top financial and tech minds working on integrating stablecoins into real-world applications and developers honing in on scalable, easy-to-use solutions, the future for crypto payments looks bright—and much closer to mass uptake.
