While favoring asset-backed stablecoins, the Act implicitly disqualifies most algorithmic stablecoins, especially after past failures like TerraUSD (UST), emphasizing stability and security over complex mechanisms.

The broader crypto market responded positively to the regulatory clarity, with Bitcoin and Ethereum reaching new highs in Q3 2025, driven by increased institutional confidence.

Community response has been generally positive, highlighting increased clarity and innovation potential, though some express concerns about regulatory overreach impacting smaller players and DeFi.

Ongoing rulemaking by agencies like the U.S. Treasury and Federal Reserve, with public comments due by November 4, 2025, will shape detailed operational standards.

The signing of the GENIUS Act into law on July 18, 2025, marks a significant milestone by establishing the first comprehensive U.S. federal regulatory framework for stablecoins, aiming to provide clarity and foster institutional adoption.

This legislation is expected to accelerate the mainstream adoption of digital assets, creating a more integrated and liquid stablecoin ecosystem that enhances the U.S. dollar's dominance in digital finance.

The Act's requirements for full reserve backing and transparency have strengthened confidence in stablecoins, especially with stablecoins surpassing $10 billion in monthly transaction volume, and have attracted increased institutional interest.

As a result, the stablecoin market has grown by 17% from July to October 2025, nearing $300 billion, with U.S. dollar-backed stablecoins like USDT and USDC dominating the market.

The full enactment of regulations is anticipated by late 2026 or early 2027, with ongoing legislative monitoring including related efforts like the CLARITY Act.

The Act enhances consumer protection through transparency and reserve backing, though stablecoins remain uninsurable federally, and regulatory gaps for certain types like crypto-collateralized stablecoins persist.

This surge in stablecoin activity is accompanied by heightened investor interest, with traditional financial institutions aligning with new regulations and mentions in SEC filings increasing.

The legislation is expected to lead to a compliance rush among stablecoin issuers and expand their utility in cross-border payments, corporate payrolls, and DeFi, supported by infrastructure upgrades like the Federal Reserve's new payment account model.

Looking ahead, the Act aims to solidify U.S. leadership in digital assets, influence international standards, and promote responsible innovation, with key regulatory details to be finalized by early 2027.