Amundi Warns GENIUS Act May Undermine Dollar’s Global Role as Stablecoin Use Expands

• The GENIUS Act may lead to a rise in stablecoins which could reduce the long-term strength of the US dollar.
• Amundi warns that tech firms issuing stablecoins might act like banks and disrupt the financial system.
• Stablecoin regulation could help tokenized assets grow but might create risks in global currency stability.

European asset manager Amundi has raised concerns about the potential consequences. It warned that the act might weaken the dollar’s long-term dominance. By backing stablecoins with US Treasury bonds, the act could unintentionally fuel the rise of alternative currencies. 

Amundi noted that stablecoin issuers could operate like banks. That development may blur the lines between tech firms and traditional financial institutions.

Amundi Flags Long-Term Dollar Risks

The US GENIUS Act, passed by the Senate on June 17, aims to regulate stablecoins. The legislation sets capital and reserve requirements for issuers. It now moves to the House of Representatives for further review. Analysts say the act could increase the use of dollar-backed stablecoins. That shift may reshape the role of the US dollar in global payments.

Stablecoins Gain Ground Rapidly

Stablecoins have seen rapid growth in recent years. Their market value has more than doubled since early 2023. Current circulation exceeds $250 billion, and analysts expect this figure to keep rising. 

Industry estimates suggest the market could grow to $3.7 trillion by 2030. Firms like Apple, Google, and X are reportedly exploring stablecoin issuance. This growing interest signals a shift in how companies interact with digital currencies.

Legislation Could Boost Treasury Demand

The act’s requirement for full collateralization may drive more investment into US Treasury bonds. This could increase bond demand while signaling that the dollar needs support. That perception may impact investor confidence in the dollar’s strength. While supporting digital finance, the act could also add strain to the global financial order.

Tokenization Sector Sees Regulatory Clarity

Proponents believe the act offers clarity for tokenized finance. It helps create a compliant environment for platforms using real-world assets. These include real estate, trade finance, and sukuk markets. The regulation may enable secure and on-chain settlement systems. Analysts say this could unlock more institutional participation in tokenization.

Supporters view the bill as a key step for digital asset innovation. Critics point to risks of financial fragmentation. The rise of “quasi-banks” through corporate stablecoins may reshape market roles. Global coordination on regulation remains limited. This raises concerns about uneven oversight across regions.

Broader Implications Remain Unclear

The GENIUS Act could redefine digital dollar usage in global trade. Its full impact depends on how firms and markets respond. As the House considers the bill , global stakeholders are watching closely. The balance between innovation and stability remains a central issue.