GENIUS Act Could Undermine Dollar Amid Stablecoin Boom

- Stablecoin issuers risk turning into “quasi-banks” under new U.S. legislation - Experts warn collateralization rules may weaken the dollar’s global standing Europe’s largest asset manager, Amundi, has warned that new U.S. legislation could undermine the dollar. According to a report from Cointelegraph on July 3, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which aims to regulate stablecoins, might destabilize global payments. Amundi's chief investment officer, Vincent Mortier, shared these concerns after the Senate approved the act on June 17, 2025. The GENIUS Act creates a federal framework for payment stablecoins, requiring issuers to qualify as “permitted payment stablecoin issuers.” Eligible entities include insured depository institutions and federally approved nonbank organizations, and the legislation also mandates that stablecoins maintain a one-to-one collateralization with U.S. currency. Mortier questioned the implications of this collateral rule, noting it could inadvertently signal to global markets that “the dollar is not that strong,” which might shift perceptions. Furthermore, he warned of systemic risks if stablecoin issuers begin to function as “quasi-banks.” Mortier believes many issuers may struggle with this transition, which could create consequences for the stability of the entire payments ecosystem. The GENIUS Act now awaits further debate in the House of Representatives. The White House backs the legislation, with officials characterizing it as a “clear, pro-growth legal framework” for stablecoin regulation. As dollar-backed assets, stablecoins play a significant role in digital payment systems and tokenized ecosystems and have gained attention in sectors like real estate and trade finance. Industry experts have mixed reactions to stablecoins, which are considered real-world assets (RWAs) because they are backed by fiat reserves or government-issued financial instruments. While some have concerns, other experts believe the GENIUS Act offers a way to reduce systemic risks when using digital dollars in tokenized economies. They argue that by establishing uniform federal standards, the legislation could drive the development of compliant platforms and expand the use of RWAs in both U.S. and international markets. As legislative debates evolve, market data from July 3 signals relative stability among key stablecoins: - Tether USDt (USDT): $1.00 (+0.001% 24-hour change) - USD Coin (USDC): $1.00 (+0.013% 24-hour change) - First Digital USD (FDUSD): $0.998 (-0.035% 24-hour change) - PayPal USD (PYUSD): $1.00 (-0.019% 24-hour change) - USDD (USDD): $1.001 (-0.035% 24-hour change) These figures highlight the steady performance of stablecoins, even as they face growing regulatory scrutiny and debate over their future in the financial system.