The recently launched US GENIUS Act which has brought changes to how digital assets can be embedded across both institutional finance and retail wealth infrastructure, represents a "seismic shift" in macroeconomic policy, according to alternative investment specialist and ETF provider Wisdom Tree.

The Act, which cleared both chambers of  US Congress with bipartisan support and was signed into law by US President Donald Trump on Friday, 18 July 2025, has been hailed as a "geo-political game-changer" as the US moves ahead of UK, Asia and Europe in crypto assets legislation and, according to Dovile Silenskyte, director, Digital Assets Research, WisdomTree.

The move has been dubbed "a sweeping legislative vision" and Silenskyte says, simultaneously, the administration is drafting an executive order to expand 401(k) investment options to include alternative assets such as digital currencies. If implemented, this could unleash a wave of institutional participation, repositioning crypto as a "core pillar in retirement portfolios".

"Alongside the GENIUS and CLARITY Acts, this signals a coordinated federal initiative to embed digital assets across both institutional finance and retail wealth infrastructure," said Silenskyte.

"The GENIUS Act rewrites the stablecoin playbook. It mandates: Full 1:1 backing in cash, short-term Treasuries, government money market funds or similar investments; a tiered oversight model, prioritising systemic issuers and bankruptcy protections that elevate stablecoin holders.

"This is not about incremental safety. It is about transforming stablecoins into sovereign-aligned financial instruments, which are transparent, liquid, and compliant by design."

US Treasury

As the stablecoin market grows and with reserves held in Treasuries and similar instruments, stablecoin issuers could also become enduring demand engines for the US government debt, which could be a "particularly valuable" investment option in low-volatility conditions.

Forecasts suggest stablecoin supply could reach US$2–4 trillion by 2030, absorbing trillions in Treasuries, which is on par with flows from major mortgage or foreign buyers, Silenskyte said.

"While it is not clear if this stablecoin supply is substituting for other forms of US dollar money or other global currencies, at least some portion of this seems likely to be net new demand. This institutionalises a new regime where crypto, liquidity, and dollar strength reinforce one another in a fiscal feedback loop.

Game-changer

"The US has launched an assertive monetary offensive as the European Union stalls and Asia treads cautiously. The GENIUS Act positions the dollar as the default layer for global value transfer by codifying stablecoin issuance into federal law.

"Offshore issuers face a binary outcome: either establish regulated US entities or meet stringent American standards – effectively exporting US regulation globally," he added..

In inflation-hit economies such as Argentina and Turkey, where stablecoins already serve as de facto dollars, the Act transforms this "informal dominance" into formal monetary reach.

"This is financial Darwinism. Compliance costs are surging, legal intricacies multiplying, and capital standards rising. Players with offshore shells, thin reserves, or ambiguous governance models will be wiped out. In their place, top-tier stablecoin issuers will evolve into on-chain banks – with governance boards, audit trails, risk dashboards, and regulatory interfaces.

"Think Basel III meets blockchain – not startups, but digital financial institutions with systemic heft. Survival demands more than code. It requires capital, compliance, and scale."

In summary Silenskyte calls the act a systemic upgrade – a "dollar-centric redesign of financial infrastructure". The US installed programmable, compliant rails to power the next digital economy with enough muscle to marginalise the euro in tokenised finance.

"The US is not just catching up," he adds. "It is seizing control. With the GENIUS Act, stablecoins become instruments of statecraft, and crypto markets become the new frontier of dollar hegemony. Institutional capital will follow compliance, and compliance now wears stars and stripes."