GENIUS Act Blocks Big Tech & Banks from Dominating Stablecoin Market

What’s Included?

• “Libra Clause” in Action: Any non-bank issuer must spin off a new entity and clear antitrust scrutiny before launching a dollar-pegged token.
• Banking Protections: Lender-issued stablecoins must be ring-fenced in subsidiaries that hold reserves without lender leverage or lending.
• Yield Ban Effects: Prohibiting interest-bearing stablecoins may drive institutional capital toward Ethereum DeFi.

Why It Matters

• Preserve Competition: This structure curtails dominance by Big Tech and major banks, preserving a more diverse market.
• Consumer Protection & Dollar Strength: The Act mandates full reserves, transparency, and AML/KYC compliance—fortifying trust in stablecoins and supporting the dollar.
• DeFi Opportunity: With yield-bearing stablecoins banned, many institutional investors may flock to Ethereum-based decentralized protocols.

Final Take

The “Libra clause” in the GENIUS Act sets a new precedent in U.S. crypto regulation: establishing structural safeguards to prevent dominance by big banks and tech companies, while pushing users toward transparent, regulated stablecoins or decentralized alternatives. This landmark is just the first step—rule-making and oversight will now determine how the stablecoin landscape evolves.