Amundi Warns GENIUS Act May Erode Dollar Dominance
Europe’s largest asset manager, Amundi, cautions that the GENIUS Act could unintentionally weaken the U.S. dollar’s global standing. Vincent Mortier, Amundi’s chief investment officer, explains that while the act’s requirements for dollar-backed stablecoins might boost demand for U.S. Treasury bonds, they could also signal dollar weakness to markets.
GENIUS Act: Reshaping Stablecoin Regulation
The GENIUS Act, approved by the U.S. Senate, establishes new reserve and capital requirements for stablecoins. This legislation could enable tech giants like Apple, Google, and Elon Musk’s X to launch their own stablecoins. Treasury Secretary Scott Bessent projects the stablecoin market could reach $3.7 trillion by 2030.
Stablecoin Growth and Market Impact
The value of circulating stablecoins has nearly doubled since January 2023, exceeding $250 billion. JPMorgan analysts anticipate further growth, potentially doubling current levels within years. These assets qualify as real-world assets (RWAs) since they’re backed by government bonds and fiat currencies.
Balancing Risks and Opportunities
While Mortier warns about stablecoin issuers becoming de facto banks, Abdul Rafay Gadit of ZigChain sees the GENIUS Act accelerating tokenization adoption in real estate and trade finance. The act’s progress through the House of Representatives will determine its final form and global financial implications.