Will the GENIUS Act Usher a Stablecoin Startup Funding Boom?

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The “Guiding and Establishing National Innovation for US Stablecoins of 2025”, often known as the GENIUS Act, would possibly pave the method for yet one more increase for crypto.

Could it additionally spell a flurry of enterprise capital investments in the stablecoin area?

A New Age of Stablecoin Treasuries?

GENIUS, handed in July 2025, gives a framework for the bigger adoption of stablecoins. And stablecoins may develop into the rails for a Cambrian explosion of latest crypto functions. 

That’s as a result of as a substitute of counting on outdated, sluggish, and fee-heavy cost banking rails, stablecoins are new, quick and low cost.

However, it’s new territory, and there are dangers. But the future appears shiny for stablecoins.

“The most highly observable, fast-growing trend to keep an eye on is stablecoins,” mentioned David Mort, an early investor in Coinbase and General Partner of Propel VC. “Over the next five years, we likely see exponential growth in stablecoin-linked treasuries and deposits onchain.”

Total stablecoin market cap since 2018. Source: DefiLlama

According to DefiLlama, the whole market capitalization for stablecoins is at the moment $272 billion. Tether dominates the area with a $165 billion share of the market cap, adopted by Circle’s USDC at $67 billion and Ethena at $11 billion. 

So, now that corporations have US regulatory rails to experience on, much more development in the stablecoin market cap might be on the method.

“The GENIUS Act provides the regulatory stability for the underlying payment rails, which frees up innovators to focus on building that superior user experience,” mentioned Artem Gordadze, an angel investor in NEAR Foundation and advisor at startup accelerator Techstars. 

Fresh Rails and A Lot of New Assets

There’s a rush to challenge new stablecoins, which appears to be occurring virtually day-after-day of the week. This is very from model names like Bank of America.  

The GENIUS Act requires that cost stablecoins should be backed by high-quality, low-risk belongings like money, Treasury payments, or reserves at Federal Reserve banks. 

That’s all stuff that banks are, effectively, good at. But not each stablecoin is made equal.

Basis commerce stablecoins like Ethena are excluded and will face restrictions or de facto outlawing. That’s made Ethena, and in addition Tether to have particular plans for potential new merchandise tailor-made to the US market. 

The high ten stablecoins ranked by market cap. Source: CoinGecko

The drawback is that banks transfer slowly, way more than a startup can.

In addition, stablecoins are only one a part of making web3 straightforward for customers to undertake. Reducing blockchain complexity for end-users goes to be an necessary element.

“As for the next generation of consumer web3 apps, we are more likely to catch the next one that looks more traditional but operates on fresh rails,” added Propel’s Mort. 

Mort’s “fresh rails” consult with utilizing blockchain to facilitate issues that banks and fintechs haven’t needed to do with monetary functions in the previous. 

New Ideas and More Financial Products Around Stablecoins

New shopper apps will quickly provide micropayments, cross-border transactions, and extra crypto-native parts reminiscent of swapping, on-chain lending, and staking.

It’s simply a matter of time, famous David Alexander II, companion at crypto VC agency Anagram. 

“Founders now have a tangible framework to build from so I think we’ll start to see powerful ideas, which were previously sidelined, come to light,” mentioned Alexander II. The rise of synthetic intelligence inside web3 apps can be one thing to be thought-about as effectively. “The most compelling investment thesis is likely to be a consumer app that uses AI to offer a more seamless, intelligent Web3 experience,” mentioned angel investor Gordadze. 

Indeed, if web3 apps wish to work like web2 however present extra highly effective options at blockchain’s decrease value, implementing AI could also be a commonplace in the future.

Also, it’ll increase the bar for technical founders, as AI requires a particular skillset that some in blockchain could not have.

“Consumer-facing web3 apps have historically struggled with complexity,” added Gordadze. AI is the good instrument to unravel this, creating progressive experiences and simplifying complicated DeFi primitives.” 

More CLARITY

One factor of US coverage that also must fall into place, nevertheless, is the CLARITY Act. This piece of laws is framed round digital belongings that aren’t stablecoins, It places non-stablecoin cryptocurrencies into a commodities bucket, which might be regulated beneath the CFTC. 

“This sets the stage for the CLARITY Act, which could have a decidedly powerful impact on digital assets and kickstart a new wave of programmable finance,” famous Anagram’s Alexander II. 

Over $10 billion of crypto enterprise capital was deployed in the second quarter of 2025. As a results of GENIUS, enterprise capitalists appear to know what they’re in search of. 

Depending on market dynamics, and the CLARITY Act, the fourth quarter of 2025 could possibly be one for the ages for VC funding in the area.

The put up Will the GENIUS Act Usher a Stablecoin Startup Funding Boom? appeared first on BeInCrypto.

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