US crypto legislation drives $4B surge in stablecoin supply

The recent U.S. crypto legislation, notably the GENIUS Act signed into law by President Donald Trump in July 2025, has driven a substantial surge in the stablecoin supply, estimated to increase by as much as $4 billion initially, with projections of growth reaching up to $75 billion according to Bank of America analysts.

This legislation marks an important regulatory turning point, providing clearer rules and legitimacy to stablecoins in the U.S. market, encouraging infrastructure development and a broader adoption of tokenized finance.

The GENIUS Act, passed by the U.S. House with strong bipartisan support (308-122) and endorsed by the Senate, aims to regulate stablecoin issuers with conditions regarding reserves, stability, and oversight.

This regulatory clarity is seen as a crucial step that boosts confidence among investors and crypto companies, contributing to an inflow of capital into the stablecoin market and related crypto assets.

The surge in stablecoin supply is significant because stablecoins act as digital cash on blockchain networks, facilitating faster, cheaper, and more transparent payments compared to conventional systems. Their growing use is expected to reshape global payment infrastructure, increase liquidity in crypto markets, and potentially expand financial inclusion.

Major stablecoins like USDC are gaining ground over others like USDT, partly influenced by evolving regulations and partnerships with exchanges.

This legislation and the resulting boost in stablecoins supply follow extensive advocacy efforts from the crypto industry, which reported substantial spending in the second quarter of 2025 to ensure legislative success.

The new regulatory environment is anticipated to increase the credibility and institutional adoption of stablecoins, as reflected in the positive market reactions, including gains in crypto-linked stocks and rising prices of Ethereum.

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