The recently signed GENIUS Act is drawing attention not just for its historic passage, but for a provision insiders call the “Libra clause.”
Circle’s Chief Strategy Officer Dante Disparte says the measure is specifically designed to keep Big Tech and major banks from gaining outsized control of the stablecoin market. To issue a dollar-pegged token, non-banks must now form a standalone entity, face antitrust scrutiny, and gain clearance from a Treasury Department oversight committee.
Even traditional banks don’t get a pass. If they wish to issue stablecoins, they’ll need to do so under a separate legal subsidiary with strict limits—no lending, no leverage, and no risk-taking. According to Disparte, this model is more conservative than existing proposals from giants like JPMorgan, and it reflects a broader effort to safeguard financial stability while modernizing payment infrastructure.
Passed with strong bipartisan support, including over 100 Democratic votes, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act marks a turning point for U.S. crypto policy. While smaller issuers can still operate under state regulations if they hold under $10 billion in assets, larger players will need a federal charter and will face heightened regulatory oversight.
The law also outlaws interest-bearing stablecoins and mandates full disclosure of reserves, a move that shuts the door on risky projects like Terra. However, this has sparked concern among some that banning yield could limit consumer incentives. Disparte argues that yield should come from secondary markets, such as DeFi protocols, not directly from the stablecoin itself.
That shift may be underway already. With the yield ban in place, analysts expect capital—especially from institutions—to flow toward decentralized finance platforms where passive income opportunities remain intact. Ethereum, which dominates DeFi in terms of total value locked, is expected to benefit the most. Some in the industry are calling this the beginning of a new “DeFi summer,” sparked not by speculation but by structural changes in U.S. regulation.
Alexander Zdravkov
Reporter at Coindoo
Alexander Zdravkov is a person who always looks for the logic behind things. He is fluent in German and has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
Source: https://coindoo.com/genius-act-blocks-tech-giants-pushes-defi-to-the-forefront/