Stablecoins: a legislative turning point

The passing of the Genius Act in July 2025 is, in many ways, a watershed moment for the banking industry, and for stablecoins.

Ana De Sousa, chief executive of Agio Ratings and former vice-president of fintech at the Federal Reserve Bank of San Francisco, discusses how the legislation lifts barriers preventing banks from holding stablecoin reserves, enabling them to be custodians for the assets and even issue their own.

Key takeaways:

• The Genius Act marks the first major US crypto legislation, creating space for banks to issue and be a custodian for stablecoins, but with yield restrictions and compliance burdens.
• Stablecoin adoption is accelerating, driven by policy goals to support US dollar supremacy and expand digital asset rails.
• Use cases include crypto trading, savings in unstable economies, cross-border payments and closed-loop payment systems.
• The market is dominated by a handful of players – Tether, Circle and Coinbase – due to economies of scale and regulatory arbitrage.
• Banks’ main opportunities lie in reserve management, fiat–stablecoin conversion and strategic first-mover positioning.
• Tokenised deposits may offer a more bank-friendly alternative to stablecoins, with fewer restrictions and the ability to offer yield.
• Significant compliance, reputational and operational risks remain – especially around anti‑money laundering transaction monitoring and vendor vetting.