The GENIUS Act blocks Big Tech and banks from dominating stablecoins, with rules that may shift users to DeFi.
Author: Akshat Thakur
July 20, 2025 — Circle’s Chief Strategy Officer, Dante Disparte, said the recently passed GENIUS Act puts firm barriers in place to stop Big Tech and large banks from dominating the stablecoin market, promoting fair competition and regulatory oversight.
Disparte, speaking on the Unchained podcast, highlighted a specific clause in the GENIUS Act — which he dubbed the “Libra clause” requiring non-banks to create standalone subsidiaries to issue stablecoins. These issuers must clear antitrust hurdles and gain approval from a Treasury committee with veto power.
Banks are also restricted. Any lender issuing a stablecoin must form a separate subsidiary and is barred from using leverage, taking risks, or engaging in lending with the stablecoin reserves.
This structure, Disparte said, is even stricter than the models proposed by major institutions like JPMorgan, ultimately benefiting US consumers and supporting the dollar’s stability.
The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) passed last week with over 300 votes in the U.S. House of Representatives, including support from 102 Democrats.
The act introduces strict rules for stablecoin issuers:
Disparte emphasized that the GENIUS Act provides long-awaited legal clarity for crypto firms and opens the door for competitive innovation under a regulatory framework.
The GENIUS Act’s ban on interest-bearing stablecoins could drive more users to decentralized finance. Without yield incentives from centralized stablecoins, platforms like those on Ethereum may become the go-to source for passive income.
Analysts from CoinFund and DeFiLlama suggest this could usher in a “DeFi summer,” especially among institutional investors who rely on yield to meet fiduciary responsibilities. With DeFi offering those opportunities, capital may rapidly shift toward decentralized platforms.
Our Crypto Talk is committed to unbiased, transparent, and true reporting to the best of our knowledge. This news article aims to provide accurate information in a timely manner. However, we advise the readers to verify facts independently and consult a professional before making any decisions based on the content since our sources could be wrong too. Check our Terms and conditions for more info.
Ledger Probes User Fund Losses Tied to Reseller CryptoBilis
Why Provenance Blockchain (HASH) Is Up 39.6% Today?
Halborn Clears XMAQUINA RCM Audit With Zero Critical Bugs
Fidelity Scoops $354M Bitcoin, ETH & SOL in 20 Days
Ledger Probes User Fund Losses Tied to Reseller CryptoBilis
Why Provenance Blockchain (HASH) Is Up 39.6% Today?
Halborn Clears XMAQUINA RCM Audit With Zero Critical Bugs
Fidelity Scoops $354M Bitcoin, ETH & SOL in 20 Days
