Rich by Coin

Using high-frequency data surrounding the passage of the U.S. GENIUS Act in July 2025, the study found that the creation of a federal framework for payment stablecoins reduced the market capitalization of incumbent U.S. payment firms by 18% (approximately $300 billion). The impact was most severe for cross-border payment firms, which saw a 27% decline due to stablecoins’ inherent advantage in borderless, 24/7 infrastructure. Conversely, firms with strong network effects (like Visa) or those already engaged in crypto-assets were more resilient, suggesting that early adoption of blockchain technology serves as a critical strategic hedge. The GENIUS Act Impact: Established a 100% reserve-backing requirement and independent audits, turning stablecoins into a credible competitor for traditional fiat rail systems.

Heterogeneous Market Response: While cross-border specialists suffered, crypto-engaged firms saw significantly smaller declines, prompting a post-legislation surge in payment firms offering digital asset services. Earnings Call Sentiment: Mentions of stablecoins in corporate earnings calls increased sharply after the bill’s passage, indicating a widespread shift in incumbent strategies to adapt to the new regulatory environment. Benchmarking Competition: The market shock from the GENIUS Act was found to be larger than the impact of the Durbin Amendment or the anticipated launch of the Digital Euro. Network Effect Insulation: Major network operators remained partially protected from the shock, as their established user bases provide a barrier to entry that standalone stablecoin issuers have yet to breach.

What is the GENIUS Act? The GENIUS Act (2025) is a landmark piece of U.S. legislation that established the first comprehensive federal regulatory framework for payment stablecoins. It plays a role in professionalizing the stablecoin market by mandating 100% reserve backing, monthly public disclosures, and rigorous independent audits for large-scale issuers. The Act is supported by the goal of ensuring that digital dollars can function as a safe and reliable medium of exchange within the traditional financial system.