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.

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).

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.

GENIUS is part of the US response. US lawmakers and the administration recognize that smart regulation provides a competitive advantage. It’s about ensuring the US dollar and dollar-pegged…