"Stablecoins are all dying"...GENIUS's toxic clauses trigger corporate exodus crisis

▲ Tether (USDT), Stablecoin/AI Generated Image

Concerns are spreading that a regulatory proposal, once expected to lead to the stablecoin market's institutionalization, could instead act as a powerful control mechanism, pressuring the entire industry.

According to the economic media outlet Forbes on April 18 (local time), market sentiment rapidly cooled after the detailed compliance requirements of the stablecoin regulation act GENIUS were revealed. The market, which had previously focused only on the symbolic nature of the bill, was shocked after confirming the intensity of the core compliance clauses. Issuers are now facing a situation where they must consider the very sustainability of their businesses, beyond mere regulatory compliance.

Article 402 of the bill requires issuers to provide real-time asset proof. At the same time, it mandates the immediate sharing of all traders' identity information with government computer networks. This measure fundamentally shakes the virtual asset ecosystem, which has grown based on anonymity. Meeting these standards requires enormous system development costs, and violating the regulations can result in a fine of up to $50,000 per day. From a corporate perspective, this structure creates an unbearable financial burden.

The industry is protesting that this clause will become a barrier preventing small and medium-sized issuers from entering the market. With decentralized finance protocols also included in the scope of regulation, a complete overhaul of existing business models has become inevitable. Law firm officials are criticizing it as the introduction of a powerful surveillance system under the guise of innovation. Increased regulatory costs and heightened uncertainty are highly likely to ultimately lead to a contraction in market liquidity.

The government maintains that these regulations are essential for blocking terror financing and protecting consumers. Some issuers are even considering withdrawing from the U.S. market, escalating their response. These movements are also affecting major assets such as Bitcoin (BTC) and XRP, increasing overall market tension.

Authorities plan to begin full-scale enforcement from the second quarter of 2026. Assets that do not meet the standards may be recommended for delisting from exchanges. Issuers are being forced to choose between expanding system investments and scaling back operations. This regulatory proposal is likely to be a watershed moment that will fundamentally change the landscape of the stablecoin market.

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