The US Senate’s passage of the GENIUS Act marks a watershed moment for stablecoins, digital tokens designed to hold a stable value, usually by being pegged to the US dollar.
In a new note, Deutsche Bank Research argues that this move could redefine both the role of the dollar in global finance and the shape of the crypto market in the years ahead.
The GENIUS Act, which passed the Senate with broad bipartisan support, would require stablecoin issuers to back their tokens with short-term US government debt or cash equivalents, disclose reserves monthly, and submit to annual audits if they exceed $50 billion in market cap.
Crucially, it also gives stablecoin holders priority in the event of insolvency, boosting their appeal as a digital store of value.
Deutsche highlights the geopolitical stakes. By anchoring stablecoins to the dollar under a federal regime, the US could extend its monetary influence through private digital tokens.
Specifically, this reach could prove important in emerging markets where dollar-backed stablecoins are used to hedge against inflation or as a cheaper way to send money abroad.
The bank notes that in countries such as Brazil, Nigeria and Turkey, almost half of crypto users cite “saving in dollars” as their main reason for using stablecoins.
With more than $120 billion already parked in US Treasury bills by stablecoin issuers, their growing influence could even affect short-term interest rates, says the report, which was penned by senior strategist Marion Laboure.
Deutsche notes that inflows can slightly lower three-month Treasury yields, while large outflows push them up. The bill’s strict asset requirements are expected to drive even greater demand for Treasuries, which could complicate the Federal Reserve’s control over the money markets.
The report also touches on the commercial impact.
Big names such as Amazon and Walmart are exploring stablecoins to streamline payments and cut fees, although non-financial companies could face regulatory hurdles when issuing their own tokens.
The bill blocks stablecoins from paying interest, a safeguard aimed at protecting traditional bank deposits.
If passed by the House and signed into law, the GENIUS Act could put the US at the forefront of digital dollar innovation, without needing to launch a central bank digital currency.
Deutsche contrasts this with Europe, where the MiCA framework restricts non-euro stablecoins, and China, where the e-CNY faces growing competition.
Treasury Secretary Scott Bessent expects stablecoins to hit a $3.7 trillion market cap by 2030. If the GENIUS Act clears its final hurdles, that forecast may begin to look less like speculation and more like a roadmap.