The GENIUS Act Winners and Losers: Which Crypto Business Will Endure?
The recently passed GENIUS Act creates a $3.7 T stablecoin opportunity, but only for the survivors. Analysis of which crypto companies will thrive versus pass away as new policies erase the non-compliant.
The math is easy: Treasury Secretary Scott Bessent anticipates the stablecoin market might reach $3.7 trillion by years’s end– but just for companies that can survive the regulatory gauntlet that might start as quickly as later on 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 very first comprehensive stablecoin guidelines now heading to your home, an enormous industry shakeout is coming. Some companies will become trillion-dollar powerhouses. Others will simply disappear. Here’s who wins, who loses, and what it means for your portfolio.
The Clear Winners: Standard Financing 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 anybody recognizing it. The GENIUS Act allows bank subsidiaries to issue stablecoins with minimal additional capital requirements which is a huge benefit for legacy banking organizations over crypto-native rivals. None of them are truly ready for this, but once they find out which crypto company to partner with (hello Coinbase and Bitgo!), they’ll be off to the races.
Why? Because these organizations possess everything crypto companies spent years trying to build (and were normally obstructed at every turn): existing regulatory relationships, compliance infrastructure, access to Federal Reserve accounts, and most notably, consumer trust. Their balance sheets are big enough to back billions in stablecoins without breaking a sweat. The real kicker? They can utilize existing payment rails and consumer relationships to quickly scale.
Circle (USDC)– The Regulative Golden Child. Circle has been positioning for this moment since 2018, systematically building compliance infrastructure while competitors pursued yield and growth. With USDC already meeting most GENIUS Act requirements, they’re perfectly positioned to capture market share as competitors rush to comply.
Their advantage is simple: they’re already issuing monthly attestations, backing reserves with United States Treasuries, and maintaining established relationships with major exchanges. USDC’s $61.5 billion market cap provides the scale advantages needed 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 provider requires compliant custody services. The Act’s strict segregation requirements create a massive total addressable market that didn’t exist previously. Certified custody services become essential for all stablecoin operations, creating high switching costs once integrated and regulatory moats that protect incumbents. As corporate adoption accelerates, these infrastructure companies 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 historic opacity makes their ability for GENIUS Act compliance doubtful. Their offshore structure and years of regulatory resistance have created a daunting compliance gap.
The fundamental issue is transparency. Tether has never provided full audits, only “attestations,” and maintains significant exposure to commercial paper and foreign assets that do not meet the Act’s backing requirements. Their offshore legal structure complicates United States regulation, and their history suggests they’ll resist rather than comply. The forecast is stark: USDT will likely retreat from United States 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 Inbound! 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 systems 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 stringent licensing requirements create an “island effect” for non-compliant providers, forcing them to choose between United States market access and regulatory independence. Cayman Islands-based companies 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 path to launch a stablecoin. With 3 billion users and huge cash reserves, they could immediately 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 clients. Amazon’s global expansion advantages could also help navigate the complex web of international stablecoin regulations that other providers 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.
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 most of that $3.7 trillion market, while the rest become footnotes in crypto history.
Disclaimer: This article is for educational and informational purposes only and does not constitute financial, investment, legal, or tax advice.
