GENIUS Act reopens the door for a Meta stablecoin, but will it work?

The GENIUS Act will enable tech companies to issue stablecoins that functionally blur the boundary between public and private money.

But Winston Ma, adjunct law professor at New York University, argues that private stablecoins cannot function as true currency without sovereign enforcement. Yuriy Brisov, a lawyer at Digital & Analogue Partners, contends that privately issued currencies can serve as legitimate alternatives to traditional monetary systems.

Donald TRUMP GENIUS ASAP — *US President Donald Trump wants to sign the stablecoin rule as soon as possible. (Donald Trump*)

To understand the legal implications of the GENIUS Act and how it fits into the global stablecoin landscape, Magazine spoke with Brisov in Europe, Ma in the US and Joshua Chu, co-chair of the Hong Kong Web3 Association.

The bill passed the Senate on June 18 and now heads to the House of Representatives, which has its own STABLE proposal also aiming to set rules for stablecoins.

The conversation has been edited for clarity and length.

Magazine: What’s been the feeling on the ground since the GENIUS Act passed the Senate?

Chu: I don’t think we should be too surprised by this development, given the wave of regulatory actions we’ve been seeing. Hong Kong has been rushing to introduce its own Stablecoin Ordinance, MiCA is already in effect in Europe, and now the US is following that trend.

Brisov: I told you two months ago that it would pass the Senate because it was already evident that the momentum had shifted. The STABLE proposal was deeply unpopular. GENIUS, on the other hand, was widely discussed and struck a better balance.

Magazine: Why was there less support for STABLE?

Brisov: Because it essentially proposed turning stablecoins into a part of the banking system. Only banks or financial institutions with charters could issue them. GENIUS expands the scope of who can issue stablecoins. It opens the door for tech companies to become issuers as well.

Magazine: Does that mean we might soon see stablecoins issued by Big Tech?

Ma: If the GENIUS Act becomes law, it could open the door for companies like Meta to issue their own token or build payment mechanisms within their ecosystems.

The challenge is fitting platforms of that scale into a regulatory framework originally designed with more traditional financial institutions in mind. Under GENIUS, state-level regulators are the primary authority, while the Office of the Comptroller of the Currency (OCC) plays a secondary role.

Yuriy: Just to clarify: In GENIUS, there’s a two-tier regulatory pathway. An issuer can choose to go straight to the federal level from the outset and apply for a license or charter from the Federal Reserve. They don’t have to begin at the state level like under the STABLE framework.

Also, if you’re issuing over $10 billion worth of stablecoins, you’re automatically pushed into federal oversight regardless of your preference. That’s a major difference between the two proposals.

Ma: Exactly. So, in the case of massive global platforms, it probably makes more sense for them to go straight to the federal framework anyway, given their size and reach. A company like Meta operating under GENIUS could end up issuing something that, in scale and function, resembles a central bank digital currency (CBDC).

Meta Diem wind down — *Meta backed a stablecoin project that shut down in 2022 after facing unrelenting pressure from global regulators. (Diem*)

It’s interesting because while the US system would still be fragmented with multiple issuers, Meta’s stablecoin could hypothetically have the kind of uniformity and massive transaction volume that makes it look more like a sovereign digital currency.

In China, the digital yuan is a sovereign project backed by a single centralized justice and regulatory framework. However, in the US, we might end up with something that functions similarly, not through state issuance, but through massive corporate ecosystems.

Magazine: How does the GENIUS Act compare to laws in Europe and Asia?

Brisov: In many ways, GENIUS is America’s answer to MiCA. MiCA clearly backs euro-pegged stablecoins and supports European companies and banks. And we’ve seen the results. After MiCA, the euro and euro-pegged stablecoins started gaining ground.

Magazine: What are the potential downsides of the GENIUS Act?

Brisov: Historically, the US has separated commercial enterprises and banking institutions. That principle is a cornerstone of not just the American economy but its broader political and legal system. GENIUS blurs that line, allowing companies like Amazon or Meta to potentially issue their own money and become self-sufficient financial ecosystems.

In Europe, MiCA also doesn’t outright ban Big Tech from issuing stablecoins, but it does make it much harder. There’s also the issue of volume caps. Under MiCA, if you’re a foreign stablecoin issuer, your maximum daily volume must stay under 1 million transactions or 200 million euros.

If you exceed that, your stablecoin is considered “significant” and comes under the supervision of the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA). They’ll decide how to regulate you moving forward.

Magazine: What do you think about the timing of China’s central bank governor’s speech on the digital yuan, delivered the same day the GENIUS Act passed?

Ma: This wasn’t coincidental. What’s interesting is how the Chinese central bank uses the term “CBDC stablecoin” as a single concept. In other words, in China’s monetary system, the CBDC is the stablecoin version of the renminbi.

World map of central bank digital currency progress — *China’s CBDC is among the most developed CBDCs among major economies. (Atlantic Council*)

The digital yuan is by far the most widely tested CBDC in the world. So, now we’re seeing this emerging monetary competition globally: The US relies on a mix of private sector stablecoins, while China is leaning on a sovereign digital currency model.

Magazine: Can stablecoins truly function as currencies without sovereign backing?

Ma: If you want to call something a currency, it needs sovereign backing — not just to promote it, but to enforce it. In that sense, China’s model has its strengths.

Merchants in China are legally required to accept cash despite ubiquitous payment systems like Alipay. (Markus Winkler) — *Merchants in China are legally required to accept cash despite ubiquitous electronic payment systems like Alipay. (Markus Winkler)*

Imagine having 100 different stablecoin issuers. That means users would need 100 separate payment interfaces. That’s a huge barrier. Even in China, where there’s just one interface for the CBDC, it’s been a challenge.

Beyond just the ability to process payments, merchants must be willing or required to accept those payments. For example, in my book “China’s Mobile Economy,” I discuss a case where a merchant refused to accept cash, and the customer sued. The Chinese central bank ruled that cash must be accepted because it was issued by the state.

If you want a stablecoin to function as a currency, there has to be an authority backing it, saying, “You must accept this.” Without that power, it’s not truly a currency — it’s just an optional payment method.

Yuriy: To offer another perspective, fiat currency is issued by the government. But for most of human history, money was privately issued. Even in the US, until 1913, different banks printed their own currency. The Federal Reserve’s monopoly on issuing dollars didn’t really solidify until the 1930s-1970s.

What we’re seeing now is a crisis of centralized systems — the very issue that led to the creation of Bitcoin.

Ma: But Bitcoin is more of a store of value, not a practical currency. People don’t generally use it for day-to-day payments. There’s still the issue of user interfaces. You need infrastructure to make payments work at storefronts.

Yuriy: That infrastructure now exists. Merchants accept 15-20 different cryptocurrencies through a single point-of-sale interface. The crypto is automatically converted into dollars or euros. The merchant never even touches the crypto — they just receive fiat.

Layer-2 solutions make this technically easy. So, I don’t see that as a major barrier anymore.

Yohan Yun

Yohan Yun is a multimedia journalist covering blockchain since 2017. He has contributed to crypto media outlet Forkast as an editor and has covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking, and experimenting with new recipes.