The GENIUS Act and the Frenzied Crypto Market

The second quarter of 2025 coincides with the holding of several Crypto conferences in North America. On May 19, the GENIUS Act (the Global and National Innovation for Stablecoins Act) was advanced with a vote of 66 in favor and 32 against in the US Senate. Within a week, various financial and Crypto institutions rapidly iterated with each other. As a friend put it, the entire market became restless.

The uniqueness of this act lies in its potential to significantly impact both short-term and long-term global financial and economic landscapes. The effects will be multi-layered and cumulative, much like an earthquake occurring close to the earth's surface. If the GENIUS Act is successfully implemented, it will ingeniously mitigate the impact of Crypto on the dominant position of the US dollar and US Treasury bonds in the existing financial and economic system, and instead link the dollar to the growth in value and liquidity of the Crypto market. Essentially, it leverages the existing advantage of the dollar as a price anchor to transform it into a long-term value anchor, truly living up to its name, GENIUS.

Drawing on the discussions from last week's conference in New York, the following key issues have been preliminarily summarized:

tl;dr

1. The Root Causes of Declining Traditional Dollar Control

2. Navigating the Trade-offs and Strategic Retreat in the Face of Crypto-Driven Global Currency System Changes

3. The Stated and Real Purposes of the GENIUS Act

4. Lessons from DeFi Restaking for the Fiat World and the Money Multiplier of Shadow Currency

5. Gold, the Dollar, and Crypto Stablecoins

6. Global Market Feedback and the Drastic Changes in Financial Transactions and Assets After the Act Takes Effect

1. The Root Causes of Declining Traditional Dollar Control

The decline in the US dollar's influence and control over the global economy is due to multiple factors. From a long-term perspective, the various resource dividends that have been enjoyed since the modern era, from the Age of Exploration to World War II, have been exhausted. In the short term, the effectiveness of economic policy adjustments is gradually diminishing. However, the essential factors contributing to the current situation are mainly the following four points:

i) The rapid rise of the global economy and the national strength of various countries has reduced the necessity of using the dollar as the sole global trade and financial settlement currency. More and more countries and regions are establishing their own trade and currency settlement systems independent of the dollar.

ii) During the COVID-19 pandemic (2020-2022), the US over-issued more than 44% of the dollar's volume, with M2 increasing from $15.2 trillion to $21.9 trillion (Federal data). This has led to an irreversible decline in dollar credibility in the post-pandemic era.

iii) The internal US system's methods for regulating monetary and fiscal policies have become rigid and entropic. Capital efficiency and wealth distribution are severely asymmetric, failing to meet the needs of the digital and AI paradigms that drive economic growth.

iv) The rapid rise of the decentralized Crypto financial system, combined with the above context, has disruptively overturned the traditional financial and economic system based on national credit that has been in place since the Bretton Woods Agreement.

It is worth noting that veteran financial entrepreneurs, such as Ray Dalio, and some politicians have made dogmatic mistakes in their understanding of the Thucydides Trap in the face of the above situation. Many people have believed for the past decade that the Thucydides Trap still exists or is about to occur between China and the US, even using this topic as a basis for lobbying or investment strategies. In fact, the issues faced by China and the US are completely consistent and should be on the same side of the Thucydides Trap, while the other side is the Crypto financial system and the decentralized governance of the digital age. How to face this inevitable trend of transformation is the transitional issue that the new era's paradigm upgrade version of the Thucydides Trap should address. Clearly, the GENIUS Act has hit the mark this time.

2. Navigating the Trade-offs and Strategic Retreat in the Face of Crypto-Driven Global Currency System Changes

Based on the above, the decision behind the GENIUS Act is essentially a trade-off and a strategic retreat. It signifies the Federal government's acceptance of the reality that the traditional dollar's influence and control in the existing financial system are declining. The government is proactively further delegating the issuance and settlement rights of the dollar (Note: Most offshore dollars in fiat currency also come from the credit expansion of offshore banks outside the Federal balance sheet, which are shadow currencies. The authenticity of issuance and settlement is controlled based on the access system and compliance network and is backed and filtered by sovereign central banks). In the face of the inevitable trend of Crypto financial development, the act takes advantage of the situation by borrowing from the advanced practices of DeFi Restaking and combining them with the experience of credit expansion of offshore dollars in the foreign banking system. It encourages compliant institutions to issue stablecoins, forming a new type of "on-chain offshore structure" as an "on-chain shadow currency" model, further amplifying the money multiplier effect of the dollar in circulation.

The following table lists the characteristics of different levels and types of dollars and various shadow currency dollars:

Global Liquidity Restructuring: The GENIUS Act and On-Chain Shadow Currency

This decision and action of the GENIUS Act will largely help the dollar to "re-anchor" effectively. It will not only restore confidence among holders of US Treasury bonds and dollar assets but also allow offshore dollars to expand rapidly through the growth of the Crypto market, achieving a double effect of turning danger into safety and killing two birds with one stone.

3. The Stated and Real Purposes of the GENIUS Act

The stated and real purposes of the GENIUS Act are clearly different. Simply put: internally, it is named as compliance regulation, while externally, it serves as a model for promotion. It provides a policy template for financial regulatory authorities in other countries and regions around the world and uses the US market as an example to provide an implementation template for financial institutions in other countries and regions. This is to encourage the faster use of dollar stablecoins pegged to US fiat currency in the Crypto market globally.

In the short term domestically, the direct purpose is, of course, compliance management. It ensures stability during the transition period as the rapid development of the Crypto market impacts the traditional financial market. This is a routine operation of the US financial legal system. In the long term internationally, it achieves an absolute promotional effect, maximizing the use of the dollar's inherent advantage as a price anchor in the traditional financial system. It also capitalizes on the pain point in the Crypto market that there is no stablecoin price anchor other than the dollar. The act ingeniously uses a semi-compliant and semi-open approach—specifically mentioning restrictions on foreign issuers in the bill: foreign stablecoin issuers not approved by US regulatory authorities are not allowed to operate in the US market, which is essentially a hint that they can operate in markets outside the US. This is intended to stimulate and confirm the global dependence on and use of dollar stablecoins during the upgrade of Crypto finance.

On May 21, the Hong Kong Legislative Council passed the Stable Coin Regulation Bill. It is believed that soon the Japan Financial Services Agency (JSA), the Monetary Authority of Singapore (MAS), and the Dubai Financial Services Authority (DFSA) will also respond with corresponding policies. Given the special importance of the stablecoin ecosystem, coupled with the rapid iterative changes triggered by the GENIUS Act, this poses a significant challenge to countries and regions with preemptive legislation. Balancing the boundaries and flexibility is crucial. If it is too loose, it will cause market chaos and increase management difficulties. If it is too tight, it will quickly be left behind by the Crypto market, losing the competitive edge in the next stage of finance, payments, and asset management. Moreover, the degree of pegging to the dollar stablecoin will directly determine the financial market independence of other fiat stablecoins in the next stage. If the pegging is too deep, it will quickly lose its financial market independence (Note: Due to the global, highly liquid, and highly interactive nature of the Crypto market, the independence of other fiat stablecoins relative to the dollar stablecoin may be even more difficult to form, and the pegging may become more rigid).

Furthermore, countries with lagging legislation will not fare better. They will face the dilemma of market chaos and difficulty in management due to rapid paradigm shifts, as well as the risk of becoming obsolete and losing competitiveness. The GENIUS Act has thus set a new benchmark for global financial regulation in the Crypto era.

4. Lessons from DeFi Restaking for the Fiat World and the Money Multiplier of Shadow Currency

A partner from the asset side told me last week that the next stage of global finance will be highly challenging, requiring a dual understanding of traditional finance and Crypto. Otherwise, one will quickly be eliminated by the market. Indeed, over the past two cycles of DeFi development, the Crypto market has independently evolved a sophisticated digital protocol-based economic science system. From protocol logic, Tokenomics, financial analysis methods and tools, to the complexity of business models, it has far surpassed the traditional financial system. Although Crypto DeFi is different from traditional finance, it still constantly needs the experience of the traditional financial system for calibration and comparison. The two learn from each other, develop rapidly, and continuously integrate to form a new financial system.

The proposal of the GENIUS Act is highly similar to the Staking, Restaking, and LSD in past DeFi cycles, or rather, it is another extension of the same methodology in the fiat world.

For example, in DeFi: using ETH to obtain rebase stETH through Lido, staking stETH in AAVE to get 70% of the collateral value in USDC, and then using the obtained USDC to buy more ETH. The ideal model of this repeated operation is a geometric series with a ratio of q = 0.7, which will eventually yield a money multiplier of 3.3.

The above process will soon be realized on the basis of fiat stablecoins under the GENIUS Act: Suppose a Japanese financial institution outside the US issues USDJ by pledging US Treasury bonds under compliant conditions, obtains JPY through off-ramp, exchanges it for USD, and then buys US Treasury bonds to form a cycle. In this repeated operation, there are several assumed multipliers: the pledge rate (which could be full, discounted, or over-collateralized), the wear and tear of on/off-ramp and exchange, and the market leakage rate. After calculating all these factors, a geometric multiplier q for a single cycle will be obtained, and the final money multiplier will be 1/(1-q). This multiple is the ideal financial amplification money multiplier that the US dollar and US Treasury bond holdings may achieve under the GENIUS Act and subsequent stablecoin bills in various countries.

Of course, this does not yet include the excess issuance by some non-compliant institutions, as well as the further re-pledging and restaking of assets obtained from stablecoins, which will generate other types of shadow assets. The flexibility of stablecoins will far exceed that of the derivatives market in the fiat world, and the "stablecoin asset nesting" will undoubtedly bring unimaginable impacts to the traditional financial market.

5. Gold, the Dollar, and Crypto Stablecoins

In a previous article, I mentioned the generational shift in the belief in financial system anchors. The three generations of financial benchmarks are: gold, the dollar, and Bitcoin, from a macro perspective. From a micro perspective, all three generations of finance require a daily settlement unit. In the past, it was a gold ingot or a US dollar bill. What will it be in the future?

As mentioned earlier, in the Crypto market, there is a pain point that there is no (native Crypto) currency or asset that can serve as a stablecoin price anchor other than the dollar. The reason is that pricing is crucial. In real-world transactions, a relatively stable amount is needed as an intuitive reference price for goods and services. It cannot be that a cup of Americano was 0.000038 BTC yesterday and 0.000032 BTC today. This would cause consumers and traders to lose their ability to judge value. The most important feature of stablecoins is stability, which helps consumers and traders judge and understand value through price. Then, price fluctuations around the price act as a dynamic regulator, balancing purchasing power and economic development.

Why the dollar (stablecoin)?

Firstly, the dollar has established a relatively universal consensus in the fiat world. Secondly, it is difficult to redefine a better consensus. Of course, I have also discussed this issue with several friends: a world currency stablecoin. Suppose its issuance is based on a more rational pricing mechanism of the global historical GDP total and the annual GDP increase. Even if it has more optimized economic and financial efficiency than the current dollar, it would be hard to gain consensus and replace the dollar stablecoin's position in social development. This is similar to the invention of Esperanto 140 years ago. Even with the greatest algorithmic optimization, it is hard to replace the existing market share advantage of English worldwide. Many countries with native languages have also chosen English as their official language in their later development, such as India, Singapore, and the Philippines. Although they use English, their standards have long been independent of the British English criteria. It can be said that these "shadow Englishes" operate completely independently. The current indirect influence and control extended by the dollar stablecoin issuance rights under the GENIUS Act are very similar to this example.

The proposal of the GENIUS Act has seized the historical transition's demand at this moment. It leverages the dollar's irreplaceable advantage as a price anchor in the current global context and transforms it into a long-term value anchor for the future Crypto market through the form of dollar stablecoins. This is an ingenious innovative design that maximizes the use of historical advantages to leverage future advantages. Essentially, the idea of issuing dollar stablecoins by pledging dollars and US Treasury bonds is actually a bold attempt to upgrade and transform dollars and US Treasury bonds into second-order gold.

6. Global Market Feedback and the Drastic Changes in Financial Transactions and Assets After the Act Takes Effect

The implementation of the GENIUS Act still requires some time, and the same is true for stablecoin bills in other countries and regions. Some markets have begun to respond to short-term emotional fluctuations in asset prices with preliminary feedback.

In the short term, the introduction of stablecoin bills will trigger drastic changes in financial institutions' assets, RWA (Risk-Weighted Assets), and Crypto assets. Opportunities will come with reorganization, chaos, and coexisting development expectations. The uncertainty of traditional financial adjustments will increase, leading to normal asset price corrections. However, the confidence in the re-anchoring of US Treasury bonds will, in turn, reinforce and support the current market. The advantage of the open decision-making will lead to the second curve development of dollar assets combined with Crypto growth, forming a second curve for dollar assets themselves. The expectations gained from this will offset part of the short-term reorganization panic, creating a complex overlapping environment.

From the perspective of the Crypto market, this is undoubtedly an excellent window to further asset management and financial innovation. RWAFi (Real-World Asset Finance) will have more channels and asset forms for implementation, which is beneficial to long-term institutional projects like CICADA Finance that focus on Real Yield Asset Management. It will also facilitate the rapid transition and development in the DeFi, PayFi, and RWAFi industries.

The GENIUS Act and the Frenzied Crypto Market

The second quarter of 2025 coincides with the holding of several Crypto conferences in North America. On May 19, the GENIUS Act (the Global and National Innovation for Stablecoins Act) was advanced with a vote of 66 in favor and 32 against in the US Senate. Within a week, various financial and Crypto institutions rapidly iterated with each other. As a friend put it, the entire market became restless.

The uniqueness of this act lies in its potential to significantly impact both short-term and long-term global financial and economic landscapes. The effects will be multi-layered and cumulative, much like an earthquake occurring close to the earth's surface. If the GENIUS Act is successfully implemented, it will ingeniously mitigate the impact of Crypto on the dominant position of the US dollar and US Treasury bonds in the existing financial and economic system, and instead link the dollar to the growth in value and liquidity of the Crypto market. Essentially, it leverages the existing advantage of the dollar as a price anchor to transform it into a long-term value anchor, truly living up to its name, GENIUS.

Drawing on the discussions from last week's conference in New York, the following key issues have been preliminarily summarized:

tl;dr

1. The Root Causes of Declining Traditional Dollar Control

2. Navigating the Trade-offs and Strategic Retreat in the Face of Crypto-Driven Global Currency System Changes

3. The Stated and Real Purposes of the GENIUS Act

4. Lessons from DeFi Restaking for the Fiat World and the Money Multiplier of Shadow Currency

5. Gold, the Dollar, and Crypto Stablecoins

6. Global Market Feedback and the Drastic Changes in Financial Transactions and Assets After the Act Takes Effect

1. The Root Causes of Declining Traditional Dollar Control

The decline in the US dollar's influence and control over the global economy is due to multiple factors. From a long-term perspective, the various resource dividends that have been enjoyed since the modern era, from the Age of Exploration to World War II, have been exhausted. In the short term, the effectiveness of economic policy adjustments is gradually diminishing. However, the essential factors contributing to the current situation are mainly the following four points:

i) The rapid rise of the global economy and the national strength of various countries has reduced the necessity of using the dollar as the sole global trade and financial settlement currency. More and more countries and regions are establishing their own trade and currency settlement systems independent of the dollar.

ii) During the COVID-19 pandemic (2020-2022), the US over-issued more than 44% of the dollar's volume, with M2 increasing from $15.2 trillion to $21.9 trillion (Federal data). This has led to an irreversible decline in dollar credibility in the post-pandemic era.

iii) The internal US system's methods for regulating monetary and fiscal policies have become rigid and entropic. Capital efficiency and wealth distribution are severely asymmetric, failing to meet the needs of the digital and AI paradigms that drive economic growth.

iv) The rapid rise of the decentralized Crypto financial system, combined with the above context, has disruptively overturned the traditional financial and economic system based on national credit that has been in place since the Bretton Woods Agreement.

It is worth noting that veteran financial entrepreneurs, such as Ray Dalio, and some politicians have made dogmatic mistakes in their understanding of the Thucydides Trap in the face of the above situation. Many people have believed for the past decade that the Thucydides Trap still exists or is about to occur between China and the US, even using this topic as a basis for lobbying or investment strategies. In fact, the issues faced by China and the US are completely consistent and should be on the same side of the Thucydides Trap, while the other side is the Crypto financial system and the decentralized governance of the digital age. How to face this inevitable trend of transformation is the transitional issue that the new era's paradigm upgrade version of the Thucydides Trap should address. Clearly, the GENIUS Act has hit the mark this time.

2. Navigating the Trade-offs and Strategic Retreat in the Face of Crypto-Driven Global Currency System Changes

Based on the above, the decision behind the GENIUS Act is essentially a trade-off and a strategic retreat. It signifies the Federal government's acceptance of the reality that the traditional dollar's influence and control in the existing financial system are declining. The government is proactively further delegating the issuance and settlement rights of the dollar (Note: Most offshore dollars in fiat currency also come from the credit expansion of offshore banks outside the Federal balance sheet, which are shadow currencies. The authenticity of issuance and settlement is controlled based on the access system and compliance network and is backed and filtered by sovereign central banks). In the face of the inevitable trend of Crypto financial development, the act takes advantage of the situation by borrowing from the advanced practices of DeFi Restaking and combining them with the experience of credit expansion of offshore dollars in the foreign banking system. It encourages compliant institutions to issue stablecoins, forming a new type of "on-chain offshore structure" as an "on-chain shadow currency" model, further amplifying the money multiplier effect of the dollar in circulation.

The following table lists the characteristics of different levels and types of dollars and various shadow currency dollars:

Global Liquidity Restructuring: The GENIUS Act and On-Chain Shadow Currency

This decision and action of the GENIUS Act will largely help the dollar to "re-anchor" effectively. It will not only restore confidence among holders of US Treasury bonds and dollar assets but also allow offshore dollars to expand rapidly through the growth of the Crypto market, achieving a double effect of turning danger into safety and killing two birds with one stone.

3. The Stated and Real Purposes of the GENIUS Act

The stated and real purposes of the GENIUS Act are clearly different. Simply put: internally, it is named as compliance regulation, while externally, it serves as a model for promotion. It provides a policy template for financial regulatory authorities in other countries and regions around the world and uses the US market as an example to provide an implementation template for financial institutions in other countries and regions. This is to encourage the faster use of dollar stablecoins pegged to US fiat currency in the Crypto market globally.

In the short term domestically, the direct purpose is, of course, compliance management. It ensures stability during the transition period as the rapid development of the Crypto market impacts the traditional financial market. This is a routine operation of the US financial legal system. In the long term internationally, it achieves an absolute promotional effect, maximizing the use of the dollar's inherent advantage as a price anchor in the traditional financial system. It also capitalizes on the pain point in the Crypto market that there is no stablecoin price anchor other than the dollar. The act ingeniously uses a semi-compliant and semi-open approach—specifically mentioning restrictions on foreign issuers in the bill: foreign stablecoin issuers not approved by US regulatory authorities are not allowed to operate in the US market, which is essentially a hint that they can operate in markets outside the US. This is intended to stimulate and confirm the global dependence on and use of dollar stablecoins during the upgrade of Crypto finance.

On May 21, the Hong Kong Legislative Council passed the Stable Coin Regulation Bill. It is believed that soon the Japan Financial Services Agency (JSA), the Monetary Authority of Singapore (MAS), and the Dubai Financial Services Authority (DFSA) will also respond with corresponding policies. Given the special importance of the stablecoin ecosystem, coupled with the rapid iterative changes triggered by the GENIUS Act, this poses a significant challenge to countries and regions with preemptive legislation. Balancing the boundaries and flexibility is crucial. If it is too loose, it will cause market chaos and increase management difficulties. If it is too tight, it will quickly be left behind by the Crypto market, losing the competitive edge in the next stage of finance, payments, and asset management. Moreover, the degree of pegging to the dollar stablecoin will directly determine the financial market independence of other fiat stablecoins in the next stage. If the pegging is too deep, it will quickly lose its financial market independence (Note: Due to the global, highly liquid, and highly interactive nature of the Crypto market, the independence of other fiat stablecoins relative to the dollar stablecoin may be even more difficult to form, and the pegging may become more rigid).

Furthermore, countries with lagging legislation will not fare better. They will face the dilemma of market chaos and difficulty in management due to rapid paradigm shifts, as well as the risk of becoming obsolete and losing competitiveness. The GENIUS Act has thus set a new benchmark for global financial regulation in the Crypto era.

4. Lessons from DeFi Restaking for the Fiat World and the Money Multiplier of Shadow Currency

A partner from the asset side told me last week that the next stage of global finance will be highly challenging, requiring a dual understanding of traditional finance and Crypto. Otherwise, one will quickly be eliminated by the market. Indeed, over the past two cycles of DeFi development, the Crypto market has independently evolved a sophisticated digital protocol-based economic science system. From protocol logic, Tokenomics, financial analysis methods and tools, to the complexity of business models, it has far surpassed the traditional financial system. Although Crypto DeFi is different from traditional finance, it still constantly needs the experience of the traditional financial system for calibration and comparison. The two learn from each other, develop rapidly, and continuously integrate to form a new financial system.

The proposal of the GENIUS Act is highly similar to the Staking, Restaking, and LSD in past DeFi cycles, or rather, it is another extension of the same methodology in the fiat world.

For example, in DeFi: using ETH to obtain rebase stETH through Lido, staking stETH in AAVE to get 70% of the collateral value in USDC, and then using the obtained USDC to buy more ETH. The ideal model of this repeated operation is a geometric series with a ratio of q = 0.7, which will eventually yield a money multiplier of 3.3.

The above process will soon be realized on the basis of fiat stablecoins under the GENIUS Act: Suppose a Japanese financial institution outside the US issues USDJ by pledging US Treasury bonds under compliant conditions, obtains JPY through off-ramp, exchanges it for USD, and then buys US Treasury bonds to form a cycle. In this repeated operation, there are several assumed multipliers: the pledge rate (which could be full, discounted, or over-collateralized), the wear and tear of on/off-ramp and exchange, and the market leakage rate. After calculating all these factors, a geometric multiplier q for a single cycle will be obtained, and the final money multiplier will be 1/(1-q). This multiple is the ideal financial amplification money multiplier that the US dollar and US Treasury bond holdings may achieve under the GENIUS Act and subsequent stablecoin bills in various countries.

Of course, this does not yet include the excess issuance by some non-compliant institutions, as well as the further re-pledging and restaking of assets obtained from stablecoins, which will generate other types of shadow assets. The flexibility of stablecoins will far exceed that of the derivatives market in the fiat world, and the "stablecoin asset nesting" will undoubtedly bring unimaginable impacts to the traditional financial market.

5. Gold, the Dollar, and Crypto Stablecoins

In a previous article, I mentioned the generational shift in the belief in financial system anchors. The three generations of financial benchmarks are: gold, the dollar, and Bitcoin, from a macro perspective. From a micro perspective, all three generations of finance require a daily settlement unit. In the past, it was a gold ingot or a US dollar bill. What will it be in the future?

As mentioned earlier, in the Crypto market, there is a pain point that there is no (native Crypto) currency or asset that can serve as a stablecoin price anchor other than the dollar. The reason is that pricing is crucial. In real-world transactions, a relatively stable amount is needed as an intuitive reference price for goods and services. It cannot be that a cup of Americano was 0.000038 BTC yesterday and 0.000032 BTC today. This would cause consumers and traders to lose their ability to judge value. The most important feature of stablecoins is stability, which helps consumers and traders judge and understand value through price. Then, price fluctuations around the price act as a dynamic regulator, balancing purchasing power and economic development.

Why the dollar (stablecoin)?

Firstly, the dollar has established a relatively universal consensus in the fiat world. Secondly, it is difficult to redefine a better consensus. Of course, I have also discussed this issue with several friends: a world currency stablecoin. Suppose its issuance is based on a more rational pricing mechanism of the global historical GDP total and the annual GDP increase. Even if it has more optimized economic and financial efficiency than the current dollar, it would be hard to gain consensus and replace the dollar stablecoin's position in social development. This is similar to the invention of Esperanto 140 years ago. Even with the greatest algorithmic optimization, it is hard to replace the existing market share advantage of English worldwide. Many countries with native languages have also chosen English as their official language in their later development, such as India, Singapore, and the Philippines. Although they use English, their standards have long been independent of the British English criteria. It can be said that these "shadow Englishes" operate completely independently. The current indirect influence and control extended by the dollar stablecoin issuance rights under the GENIUS Act are very similar to this example.

The proposal of the GENIUS Act has seized the historical transition's demand at this moment. It leverages the dollar's irreplaceable advantage as a price anchor in the current global context and transforms it into a long-term value anchor for the future Crypto market through the form of dollar stablecoins. This is an ingenious innovative design that maximizes the use of historical advantages to leverage future advantages. Essentially, the idea of issuing dollar stablecoins by pledging dollars and US Treasury bonds is actually a bold attempt to upgrade and transform dollars and US Treasury bonds into second-order gold.

6. Global Market Feedback and the Drastic Changes in Financial Transactions and Assets After the Act Takes Effect

The implementation of the GENIUS Act still requires some time, and the same is true for stablecoin bills in other countries and regions. Some markets have begun to respond to short-term emotional fluctuations in asset prices with preliminary feedback.

In the short term, the introduction of stablecoin bills will trigger drastic changes in financial institutions' assets, RWA (Risk-Weighted Assets), and Crypto assets. Opportunities will come with reorganization, chaos, and coexisting development expectations. The uncertainty of traditional financial adjustments will increase, leading to normal asset price corrections. However, the confidence in the re-anchoring of US Treasury bonds will, in turn, reinforce and support the current market. The advantage of the open decision-making will lead to the second curve development of dollar assets combined with Crypto growth, forming a second curve for dollar assets themselves. The expectations gained from this will offset part of the short-term reorganization panic, creating a complex overlapping environment.

From the perspective of the Crypto market, this is undoubtedly an excellent window to further asset management and financial innovation. RWAFi (Real-World Asset Finance) will have more channels and asset forms for implementation, which is beneficial to long-term institutional projects like CICADA Finance that focus on Real Yield Asset Management. It will also facilitate the rapid transition and development in the DeFi, PayFi, and RWAFi industries.