The GENIUS Act Winners and Losers: Which Crypto Companies Will Survive?

The math is simple: Treasury Secretary Scott Bessent predicts the stablecoin market could reach $3.7 trillion by decade’s end—but only for companies that can survive the regulatory gauntlet that could start as soon as later this year.

The Senate’s passage of the GENIUS Act yesterday marks the beginning of the end of crypto’s Wild West era. With the first comprehensive stablecoin regulations now heading to the House, a massive industry shakeout is coming. Some companies will emerge as trillion-dollar powerhouses. Others will simply cease to exist. Here’s who wins, who loses, and what it means for your portfolio.

The Clear Winners: Traditional Finance Goes Crypto

Major Banks – The New Crypto Kingmakers

Forget Kraken, Gemini and Crypto.com – JPMorgan Chase, Bank of America, and Wells Fargo are about to become the biggest players in crypto without anyone realizing it. The GENIUS Act allows bank subsidiaries to issue stablecoins with minimal additional capital requirements which is a massive advantage for legacy banking businesses over crypto-native competitors. None of them are truly ready for this, but once they figure out which crypto native to partner with (hello Coinbase and Bitgo!), they’ll be off to the races.

Why? Because these institutions possess everything crypto companies spent years trying to build (and were typically blocked at every turn): existing regulatory relationships, compliance infrastructure, access to Federal Reserve accounts, and most importantly, consumer trust. Their balance sheets are large enough to back billions in stablecoins without breaking a sweat. The real kicker? They can leverage existing payment rails and customer relationships to instantly scale.

Circle (USDC) – The Regulatory Golden Child

Circle has been positioning for this moment since 2018, methodically building compliance infrastructure while competitors chased yield and innovation. With USDC already meeting most GENIUS Act requirements, they’re perfectly positioned to capture market share as competitors scramble to comply.

Their advantage is simple: they’re already publishing monthly attestations, backing reserves with US Treasuries, and maintaining established relationships with major exchanges. USDC’s $61.5 billion market cap provides the scale advantages necessary to compete (or partner) with incoming traditional finance players – and of course, the company is also Wall Street establishment now on the heels of its recent IPO.

Custodial Infrastructure Players

As mentioned, Coinbase Custody, BitGo, and Anchorage Digital should see explosive growth as every stablecoin issuer needs compliant custody services. The Act’s strict segregation requirements create a massive total addressable market that didn’t exist before. Qualified custody services become mandatory for all stablecoin operations, creating high switching costs once integrated and regulatory moats that protect incumbents. As corporate adoption accelerates, these infrastructure providers sit at the center of every transaction.

The Inevitable Losers: Compliance Kills Innovation

Tether (USDT) – The $120 Billion Question Mark

Tether’s $120 billion market cap makes it too big to ignore, but they have few friends in Washington and their historical opacity makes their capacity for GENIUS Act compliance questionable. Their offshore structure and years of regulatory resistance have created an insurmountable compliance gap.

The fundamental problem is transparency. Tether has never provided full audits, only “attestations,” and maintains significant exposure to commercial paper and foreign assets that don’t meet the Act’s backing requirements. Their offshore legal structure complicates US regulation, and their history suggests they’ll resist rather than comply. The prediction is stark: USDT will likely retreat from US markets rather than submit to comprehensive oversight, creating a massive opportunity for compliant alternatives (hello again Circle) to capture their market share.

Algorithmic Stablecoins – Extinction Level Event Incoming! 

If TerraUSD’s $60 billion collapse wasn’t enough warning that this dog won’t hunt, The GENIUS Act finishes the job by effectively banning algorithmic stablecoins by requiring 1:1 backing with traditional assets, ending the experiment in “stability through smart contracts.” Any stablecoin backed primarily by crypto assets, algorithmic mechanisms, or fractional reserves becomes instantly non-compliant. The Act’s backing requirements eliminate the entire category of experimental stability mechanisms that defined much of DeFi innovation.

Offshore Stablecoin Issuers

Companies operating outside US jurisdiction will find themselves locked out of the world’s largest crypto market. The Act’s strict licensing requirements create an “island effect” for non-compliant issuers, forcing them to choose between US market access and regulatory independence. Cayman Islands-based issuers without US subsidiaries, European stablecoin projects targeting US users, and DeFi protocols issuing unbacked synthetic dollars all face the same choice: comply or exit.

The Wild Cards: Big Tech’s Crypto Invasion

Meta (Facebook) – Diem’s Revenge

After regulatory pressure killed Facebook’s Diem project in 2021, the GENIUS Act ironically gives Meta a clear pathway to launch a stablecoin. With 3 billion users and massive cash reserves, they could instantly become the largest stablecoin issuer overnight. Meta already operates payment infrastructure through Facebook Pay and WhatsApp Pay, serving a global user base hungry for digital payments. Their balance sheet can easily back hundreds of billions in stablecoins, and their political relationships have been rebuilt since the Cambridge Analytica era.

A Meta stablecoin integrated across their social ecosystem could flip the entire market dynamics, making current leaders look like startups by comparison.

Amazon – The Silent Threat

Amazon’s AWS already powers much of crypto infrastructure, but adding a native stablecoin for e-commerce payments would create an unstoppable competitive moat. Imagine instant adoption across their entire e-commerce ecosystem, integration with existing payment methods, and corporate treasury management services for business customers. Amazon’s international expansion advantages could also help navigate the complex web of global stablecoin regulations that other issuers struggle with.

PayPal – The Payments Bridge

PayPal’s existing crypto integration makes them a natural stablecoin issuer, with regulatory relationships and mainstream user base providing significant advantages over crypto-native competitors. They understand both traditional payments and digital assets in ways that pure-play crypto companies don’t.

State-Level Arbitrage: The $10 Billion Sweet Spot

The Act’s $10 billion threshold for state regulation creates a new category of “mid-tier” stablecoin issuers that could exploit regulatory arbitrage opportunities. State regulation offers lower compliance costs, faster approval processes, and local regulatory relationships that nimble players can leverage. Regional payment processors, state-chartered banks, and crypto-native startups willing to accept growth limits could find profitable niches in this space, serving markets that larger players consider too small to address.

Investment Implications: How to Position Your Portfolio

Immediate Actions for the Next Six Months

Smart money will probably buy before the institutional rush begins. Coinbase (COIN) will see explosive growth in custody services as compliance becomes mandatory. Circle equity (CRCL) of course – and major bank stocks like JPM, BAC, and WFC will benefit significantly from crypto expansion opportunities. Conversely, avoid the regulatory cliff. Any platform heavily dependent on USDT faces significant transition risk. Offshore exchanges will struggle with persistent regulatory uncertainty. Many DeFi tokens represent protocols that will need to restructure completely or shut down.

Medium-Term Opportunities Over 6-18 Months

Infrastructure plays become increasingly valuable as the market matures. Compliant custody providers, regulatory technology solutions, and auditing services will see sustained demand growth. Direct stablecoin exposure should favor USDC allocations before bank competition intensifies, while avoiding anything not backed 1:1 with US assets.

Long-Term Bets Beyond 18 Months

Big Tech partnerships represent the highest upside potential. Companies providing infrastructure to Meta, Amazon, and Apple will benefit from massive scale advantages. Payment processors bridging traditional and crypto rails will capture significant value as adoption accelerates. International expansion plays become valuable as other countries follow the US regulatory model, creating global opportunities for compliant players. The contrarian opportunity lies in non-US stablecoin projects that achieve critical mass outside US jurisdiction, though regulatory risk remains high for privacy-focused alternatives.

The $3.7 Trillion Question

Treasury Secretary Bessent’s prediction of a $3.7 trillion stablecoin market by 2030 assumes the GENIUS Act succeeds in bringing institutional adoption. The winners will be determined by regulatory compliance speed, scale advantages in absorbing compliance costs, and distribution power to reach mainstream users and institutions.

The bottom line is clear: The GENIUS Act doesn’t just regulate stablecoins—it industrializes them. Crypto-native innovation gives way to traditional finance efficiency, and the companies that understand this transition will capture the majority of that $3.7 trillion market, while the rest become footnotes in crypto history.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice.