The Genius Law of Washington has cryptography defenders that celebrate the clear regulation of Stablecoin. Politicians promote it as cementing the domain of the dollar for decades. The Financial Press frames it as a United States master coup against competing currencies.
Everyone is losing the point. Genius law did not create a protective pit around the dollar. He gave all other nations a plan to build his own digital currencies.
Short regulatory clarity in both directions
Genius law deserves credit for bringing so necessary clarity to the operations of the United States. Clear reserve requirements, regulatory supervision and compliance frameworks eliminate much of the uncertainty that has affected the sector for years. The USDC of Circle and other important operators can finally build without constantly looking at their shoulders regulatory changes.
But while Washington celebrates this supposed victory for the domain of the dollar, the real story develops differently. Genius law establishes a regulatory template that other nations are already adapting to their own coins. Japan’s JPYC initiative, Hong Kong’s digital currency framework and emerging programs in Latin America and Asia ask a lot of the United States approach.
The standardized framework of USD stable without addressing the fundamental inefficiency that limits its global adoption: local liquidity gaps. Today’s cross-border payments still depend on the expensive conversions of several steps currency that eat 3-6% in currency costs.
The problem of the dollar diversion
Consider a Brazilian worker in Japan trying to send money home. Under today’s system, they must navigate a complex route to convert yen to dollars, buy USD stable and then convert Brazilian reais. Each step incurs rates, delays and risk of counterpart.
This process makes little economic sense. Why should two economies be forced through a USD intermediary?
The USDC’s stable works brilliantly as bridge assets for institutional trade and defi applications. But for daily cross -border payments between non -dollars, they introduce unnecessary complexity and cost, while neutral settlement layers allow cross -border liquidity without USD intermediation.
The involuntary revolution
The overall influence of Genius law creates consequences that its architects probably did not anticipate. By providing a clear regulatory framework, it reduces the perceived risk of sovereign stable projects throughout the world. Countries no longer need to ask if the regulation of digital currencies is feasible: they can adopt the proven approach to the United States.
The Japan digital agency has already announced plans for Stablcoins backed by Yen using compliance frameworks inspired by US legislation. Hong Kong’s monetary authority is developing similar standards for digital dollars from Hong Kong. Brazil, Mexico and other emerging economies are making their own versions.
Programmable currencies among the stable sovereigns could reduce cross -border costs below 0.1% while eliminating liquidation delays. The vision resembles the CLS Bank multilateral settlement system, but without USD hegemony. Currency without dollar guardians.
Regulatory harmony means that there is no monopoly
Genius law succeeds as a policy precisely because other jurisdictions can replicate its approach. Regulatory harmony in the main economies reduces the complexity of compliance for the global Stablecoins operators while allowing transparent cross -border integration.
But this same harmonization prevents any single coin from monopolizing digital payments. When each important economy offers compatible local stable, market forces will determine adoption patterns instead of regulatory barriers.
The benefits of the Circle USDC of the first movement advantages and the integration of Defi Defi, which makes it an excellent bridge asset for institutional applications. However, consumer payments will probably gravitate towards local stables that eliminate currency friction and provide a family denomination.
The European regulations under Mica are creating similar frames for the stable called in euro. Asian financial centers are developing parallel structures for yen, Won and other regional currencies. Latin American countries are exploring the weight and real alternatives.
The result resembles traditional correspondent banking networks rather than hegemony in dollars. Each currency maintains its local utility while obtaining programmable capabilities for international settlements.
The effects of the network work both ways
The adoption of Stablecoin follows the effects of the network similar to other digital platforms. The first users gravitate towards options established with deep liquidity and broad acceptance. Initially, this favors USD’s stable due to its Head Start and its existing defi integration.
However, the effects of the network also reward local utility. A Mexican business that pays suppliers in pesos has few reasons to keep stable called dollars beyond transaction settlement. Local stables eliminate currency risk while providing the same programmable money benefits.
The strongest network effects arise around specific cases of use rather than abstract properties of the value store. Payroll systems, payments of suppliers and consumer remittances benefit from the coincidence of denomination that eliminates exposure to currencies.
The multi-moneced stablecoin infrastructure resembles email protocols rather than traditional monetary systems. Like Gmail users, they can communicate with Outlook users through standardized protocols, Stablecoins weight can be established with Yen Stablecoins through interoperable intelligent contracts.
The plural future of money
Genius law represents a crucial step towards the maturity of the digital currency, but not for the reasons why their supporters claim. Instead of cementing the domain of the dollar, it validates the concept of sovereign digital currencies for each important economy.
The future financial system will probably have dozens of purchases stable representing main currencies, all interconnected through programmable settlement layers. Dollar Stablecoins will play important papers in this ecosystem without necessarily dominating it.
For policy formulators, the lesson is clear. Regulatory clarity accelerates innovation, while protective barriers become obsolete.
Genius law did not crowned the dollar as king of digital money. He proved that the future belongs to those who build the best infrastructure for the digitalization of local currencies. That is a competition that the United States can win, but only competing for merit instead of depending on the title advantages.
The Stablecoin revolution is just beginning, and will be gloriously plural.
