The GENIUS Act is predicted to drive world stablecoin use to new heights. With an already established market dominance place, Ethereum stands to learn disproportionately from this transition.
In a dialog with BeInCrypto, Sanjay Shah, a researcher at enterprise capital agency Electrical Capital, confused that the Ethereum blockchain has distinctive architectural benefits that can reinforce the community’s position because the foundational layer for the incoming stablecoin economic system.
Ethereum’s Market Dominance
When US President Donald Trump signed the GENIUS Act into legislation final month, it triggered a big worth rally throughout the cryptocurrency market.
Nonetheless, Ethereum’s efficiency was unmatched. It skilled probably the most optimistic and sustained impact, surpassing any competitor within the quick aftermath.
Within the days earlier than the invoice’s passage, Ethereum’s worth surged, climbing greater than 20% and surpassing the $3,500 mark. The momentum continued even after the invoice was signed, with the community’s worth peaking at $3,875 the next week.
On the time of writing, its worth rests at $4,465.
Ethereum Worth Chart. Supply: BeInCrypto
This highly effective market response strengthened traders’ confidence in Ethereum’s skill to capitalize on a brand new regulatory surroundings.
The GENIUS Act has successfully eliminated main hurdles, paving the way in which for wider stablecoin adoption and simpler world entry to the US greenback, and traders are betting on Ethereum to prepared the ground.
Will the GENIUS Act Make Ethereum a Monetary Anchor?
Stablecoins are set to turn out to be a central element of the worldwide monetary system, serving as a mainstream greenback rail for numerous transactions, from financial savings and payroll to cross-border funds.
The regulatory readability offered by the GENIUS Act is the important thing to unlocking this widespread adoption, enabling regulated establishments to situation and make the most of stablecoins confidently.
Ethereum is ripping and the GENIUS Act is likely to be a giant purpose why.
Right here’s what’s driving $ETH (and why I believe it’s simply getting began):
Speculators appear to be front-running the narrative already (let’s be trustworthy, many had been seemingly positioning weeks in the past), betting that… pic.twitter.com/gGJxIBEOVi
— Crypto Auris (@crypto_auris) July 16, 2025
In keeping with Shah, this transition will set up a brand new, open monetary infrastructure, with Ethereum appearing as an anchor.
“Regulated issuance will unlock distribution via banks and fintechs. Ethereum could anchor the open, world facet of that system, with L2s dealing with high-throughput exercise and L1 offering safety and finality. ETH the asset could function the impartial, productive reserve collateral that underpins lending and different providers throughout the finance stack,” he informed BeInCrypto.
Since Ethereum already hosts most stablecoin liquidity, it’ll seize the lion’s share of this elevated exercise.
Why Ethereum Is Positioned to Lead
Ethereum’s present stronghold is constructed on three key properties essential for world, institutional adoption: world accessibility, security for establishments, and resistance to authorities interference.
The laws’s give attention to compliance and safety reinforces these qualities, drawing extra individuals into the community’s orbit. As is, Ethereum already instructions the market.
In keeping with latest information from DefiLlama, Ethereum is liable for over 52% of the $278 billion stablecoin market capitalization.
Ethereum presently dominates over half of the stablecoin market. Supply: Defi Llama.
“Ethereum could achieve disproportionately from the GENIUS Act as a result of it already dominates the components of the crypto economic system that the Act is more likely to speed up [like] USD-backed stablecoins and the monetary providers that develop round them,” Shah stated.
He additional strengthened this level by saying that the expansion will naturally drift towards the established chief:
“Since Ethereum already hosts nearly all of stablecoin issuance and liquidity, a lot of that development could stream to its ecosystem, reinforcing the lead it already has.”
Nonetheless, the incoming wave of stablecoin demand will inevitably place larger stress on networks to course of transactions successfully. This actuality presents a big problem for Ethereum given its historical past of scalability points.
In keeping with Shah, it may well simply rise to the event.
L2s: Addressing the Scalability Challenge
Ethereum’s scalability points have been a widely known concern within the crypto business. Its mainnet has historically been restricted to processing a small variety of transactions per second, typically resulting in community congestion and elevated transaction charges in periods of excessive demand.
Because the GENIUS Act goes into impact, the anticipated increase in stablecoin use will place unprecedented stress on the community’s capability.
In keeping with public statements from Vitalik Buterin and the Ethereum Basis, the community’s long-term reply to finish a monitor document of scalability challenges lies in Layer 2 options (L2s).
These L2s course of the majority of client and institutional stablecoin transactions in a extremely environment friendly, low-cost method. This method ensures that the community can deal with mass adoption with out compromising on its core ideas of decentralization and safety.
The Ethereum mainnet (L1) will serve a unique however equally important position because the safe settlement layer, dealing with the finality of transactions processed on the L2s.
In keeping with Shah, this synergy is what makes the scaling answer viable.
“The majority of client and institutional stablecoin throughput is designed to stay on Ethereum L2s (e.g., Base, Optimism, Arbitrum), with L1 appearing because the settlement and safety layer, so scale comes from rollups whereas preserving Ethereum’s belief ensures,” he stated.
He additionally famous the pliability and advantages this technique gives to establishments:
“Right now’s rollup structure is constructed for high-volume, low-cost funds and monetary apps, and it lets establishments select the correct trade-offs (throughput, charges, compliance options) with out leaving Ethereum’s safety umbrella.”
Regardless of the rise of competing blockchains, Ethereum’s dominance can stay agency in gentle of this enhanced infrastructure.
What Must Occur to Unseat Ethereum?
Whereas rival blockchains like Solana and Tron have made inroads within the stablecoin market, their problem to Ethereum’s dominance is unlikely to reach the long run.
A community’s long-term success in finance relies on its foundational qualities. Decentralization and safety create a virtuous cycle that pulls capital and expertise. Ethereum’s confirmed safety document and decentralized nature foster an surroundings of institutional belief, which attracts in massive swimming pools of capital, creating deep liquidity.
This wealthy ecosystem attracts builders to construct purposes and monetary providers on the platform. Shah argues that these core components make Ethereum’s place troublesome to problem.
“Velocity and price are additionally necessary components, however with out the identical decentralization, safety historical past, and institutional customization choices, it might be exhausting to dislodge Ethereum’s lead in finance.”
This actuality presents a compelling case for why regulated establishments could really feel extra inclined to decide on Ethereum, though they will now launch their very own personal stablecoins.
The Path of Least Friction
Although conventional monetary establishments can discover launching their very own personal blockchains, they may gravitate towards open, public networks.
“Some banks will pilot proprietary or permissioned rails, however settlement liquidity tends to coalesce the place counterparties already are. Personal networks normally bridge again to the place liquidity clears,” Shah informed BeInCrypto.
Although the GENIUS Act opens up new alternatives for establishments, launching and working a non-public stablecoin requires a considerable operational dedication.
“The Act lowers the barrier for banks and fintechs to situation, however the path of least friction could stay issuing on, or at the very least interoperating with, Ethereum’s liquidity hubs and L2s to entry world counterparties and composable finance,” he added.
Based mostly on present developments, all indicators recommend that Ethereum will strengthen its place as the first settlement layer for digital greenback transactions. The asset’s rising worth and rising institutional curiosity within the community reinforce such a trajectory.
The publish Specialists Predict Ethereum To Win Large In The New Stablecoin Economic system appeared first on BeInCrypto.
