The GENIUS Act Did Not Regulate Stablecoins It Broke Their Business Model

In the U.S., stablecoins represent a $170B liquidity layer. Circle alone earned around $1.6B annually from yield on reserves. The GENIUS Act ended that. Issuers can no longer keep the float.

But the float does not disappear. It moves.

Where the Float Goes

• Issuers (like Circle): Lose yield and must reinvent themselves. Circle’s IPO at 100x earnings was never about float. It was a bet on scaling transaction fees, APIs, and payment rails. It may even mean launching its own chain to capture value.
• Offshore issuers (Tether): Keep the yield, keep costs low, and entrench dominance in emerging markets. GENIUS may have crowned Tether king for good.
• Banks and custodians: Step in as the quiet winners. They custody reserves and capture economics through structured service fees.
• Payment companies: Cannot touch yield directly, but will monetize flows. Expect pricing tiers and corridor optimization fees in the 10 to 30 bps range.
• Users: Lose. What once felt “free” will now cost more at the point of use.

Technical Patterns in Post-GENIUS Models

The economics are shifting, and so are the architectures:

• Separation of custody and issuance: Banks custody assets while fintechs issue tokens. This creates dependency but also compliance cover.
• Fee-based monetization: Transaction APIs and corridor-routing services replace float economics. They require scalable low-latency infrastructure.
• Liquidity fragmentation: Offshore and U.S. pools diverge. This forces intelligent routing across jurisdictions with uneven spreads.
• Risk displacement: Yield still exists but is captured offshore, where transparency and safeguards are weaker.

These shifts mean stablecoins must operate with the same uptime guarantees and compliance hooks as payment networks. The difference is that they no longer have the balance sheet advantages that made the economics work in the first place.

The Global Reality

Here is what most observers miss: real stablecoin usage is not in the U.S. It is in Lagos, Buenos Aires, and Manila. Those corridors already rely on offshore liquidity. GENIUS ensures U.S. issuers cannot compete there.

Clarity With a Cost

Yes, GENIUS delivers clarity. But clarity here means:

You can operate legally in the U.S., but your business model is illegal.

The float era did not end. It simply moved offshore.

The Bigger Question

GENIUS will protect U.S. consumers from issuer risk. But will it also guarantee that the global stablecoin market, trillions in settlement and growing, belongs to offshore players?