The Genius Act: An idea of genius for American debt?

It is the “Crytpo Week” in Washington. Nevertheless, This week, Congress examined three texts to create a regulatory framework for the sector, after years of legal vacuum.

The Genius Act creates a regulatory framework for stablecoins. Nevertheless, The Clarity Act defines when a cryptocurrency is the status of value -value. Meanwhile, a commodity, which would clarify the competence of the Securities and Exchange Commission (SEC) in the sector. In addition, Finally, the anti-CBDC ACT aims to prohibit the issue of a Central Bank (CBDC) digital currency by the Fed.

Yesterday, the House of Representatives adopted the Genius Act. The genius act: idea genius american text will be able to be promulgated by Donald Trump. The elected officials of the Chamber also voted the Clarity Act. Additionally, the Anti-CBDC Act, but these two texts must still be validated in the Senate.

Here we are going to focus on the Genius Act and the involvement for American debt.

A boon for the US Treasury

You must first start by defining what the stablecoins are. It is a form of cryptocurrency designed to maintain a constant value. generally indexed to the dollar to a ratio of 1 to 1. They are commonly used to transfer funds between different cryptos.

Here. there is therefore no rise up or down, it is a question of having a reference asset in the Crypto universe by leaving the tokens emitted to real assets.

To guarantee the promised stability. stablecoin transmitters must constantly maintain sufficient reserves to allow investors to exchange genius act: idea genius american their tokens for the reference asset. For each token issued in dollar. they are therefore supposed to hold the equivalent in liquidity or, more frequently, in bonds of the US Treasury. A counterpart made compulsory by the Genius Act.

You therefore guess all the interest of stablecoins for the American government. No more stable in circulation, it is more demand for American debt.

More Treasuries than Norway

As we know, American debt has exploded in recent years. It is not surprising for a country that runs at 6 or 7% of public deficit.

And this level should be maintained in the coming years. with the “One Big Beautiful Bill”, the tax cutting plan adopted by the Congress at the beginning of the month. According to estimates by the Congress Budget Office, this law should increase the deficit of $ 3,500 billion over the next 10 years.

The US Treasury will genius act: idea genius american therefore have major funding needs in the coming years. From then on, a question arises: who will buy the American debt?

This is why stablecoins represent an opportunity for the American government.

Already, Tether and Circle, which respectively emit the USDT and the USDC, are becoming important players. In the first quarter of 2025, these two companies held $ 144 billion in Treasuries. It is still little in terms of what is held by certain states, but growth is significant. Thus, in 2024, Tether was 7^th Global buyer of Treasuries, in front of countries like Canada or Norway.

Sources : Theter, Circle, Apollo Chief Economist

In a note, Torsten Slok, chief economist of Apollo Global Management, believes that Stablecoins could become “a significant source of demand for short-term debt of the United States”.