Earlier this week, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act passed its final vote in the Senate, and now proceeds to the House where, if it is passed, it will move to the final steps to become law.
The passing of the bill, which establishes a long-awaited regulatory framework for fiat-currency-pegged digital currencies in the US, looks increasingly likely, and comes amid a growing focus on stablecoins from the cross-border payments industry.
While the industry has explored stablecoins before, this exploration has previously been very peripheral: few mainstream players have touched stablecoins directly, engaging through arms-length partners, if at all. That, however, is beginning to change.
Stablecoins’ growing payments adoption
Over the past few years, stablecoins have become more prominent in mainstream fintechs. PayPal launched its own stablecoin PayPal USD (PYUSD) with issuer Paxos in August 2023, and in October 2024 used PYUSD to execute a business transaction for the first time. In February of this year, Stripe completed its acquisition of stablecoin infrastructure player Bridge, which in May launched USDB, its own infrastructure-focused stablecoin.
Meanwhile, growing numbers of payments players have begun to add stablecoin support, with Worldpay partnering with BVNK to deliver stablecoin payouts and Shopify adding acceptance of leading stablecoin USDC for merchants via a partnership with Stripe and Coinbase.
The passing of the GENIUS Act, however, would bring another level to this. Multiple traditional financial organizations have expressed interest in launching their own stablecoins if the bill passes, including Bank of America, Fifth Third Bank and US Bank, while there have also been reports of interest from retail majors including Amazon, Expedia and Walmart.
Cross-border payments potential
While there are those that are quick to characterize stablecoins as a no-brainer replacement for every aspect of cross-border payments, the truth is more nuanced. Cross-border payments using stablecoins can represent an improvement over traditional correspondent banking in terms of speed and cost. Whilst it is not clear that it solves all use cases, there are a number where stablecoins can be seen to add real value.
In parts of the world where local currencies are highly volatile, stablecoins are finding popularity as a means of being paid and holding value in US dollars. Meanwhile, cross-border payments involving emerging markets are also a rapidly growing use case, with many providers of stablecoin-based business-to-business payments reporting taking business from local banks whose cross-border infrastructure remains slow and expensive.
Out-of-hours liquidity is also key, with increasing interest in stablecoins to plug time windows outside of standard US or international banking hours, which often act as significant constraints for fintechs catering to an international customer base.
While early business adopters of stablecoins were largely those looking to interoperate between volatile cryptocurrencies and the US dollar without having to pay large on and offramping fees every time they wanted to move money out of a volatile digital currency, such applications are driving growing use among those without any crypto interest.
The role of the GENIUS Act
If the GENIUS Act becomes law, it is likely that confidence in the use of stablecoins will grow within the financial sector, something we have already seen reflected in the share price of key companies. In the day following the bill’s passing in the Senate, recent public market entrant Circle saw its share price rise by 34%, while crypto exchange Coinbase, which retains an interest in Circle’s USDC stablecoin, rose by 16%.
If the act proceeds into law, traditional players will increasingly feel able to make use of the technology, while applications and solutions are likely to proliferate further.
Although adoption of stablecoins for cross-border payments has grown significantly, there is still very significant headroom to grow. My own company, FXC Intelligence, estimates that the global size of the non-wholesale cross-border payments market was $40tn in 2024, however stablecoins represent only a very small fraction of this: the market capitalization of all stablecoins has never topped its current peak of around $252bn.
The GENIUS Act’s passing through the Senate has already prompted a surge in the market cap of stablecoins, but its shift into law and the subsequent expansion of the industry will only increase this further, potentially taking a greater share of cross-border payments in the process.
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