The revised bill includes stricter AML provisions and enhanced liquidity requirements, which also reinforces the US dollar’s dominance in global finance. The US Department of Housing and Urban Development is exploring blockchain and stablecoins for grant tracking, though there is still some internal skepticism. Meanwhile, Abu Dhabi’s MGX invested $2 billion in Binance using stablecoins, proving that there is renewed institutional interest in crypto. With venture capital funding on the rise, 2025 is expected to be a strong year for crypto investments.
GENIUS Bill Could Pave the Way for CBDC-Like Oversight
The recent GENIUS stablecoin bill sparked some controversy, with critics arguing that it serves as a covert mechanism for imposing central bank digital currency (CBDC) controls through privatized means. Jean Rausis, co-founder of the Smardex decentralized trading platform, shared his concerns about the legislation, and claimed that the US government will use the bill to exert control over stablecoin issuers in a way that is very similar to the European Union’s Markets in Crypto-Assets (MiCA) regulations.
Rausis believes that by controlling stablecoins, the government effectively gains authority over financial transactions. He pointed out that working with centralized stablecoin issuers allows authorities to freeze funds at will, achieving the same result as a CBDC without the need to introduce one formally.
GENIUS bill first page
According to him, this approach provides the illusion of decentralization while still enabling full regulatory control over digital assets. To counteract this growing government oversight, Rausis argued that decentralized alternatives like algorithmic stablecoins and synthetic dollars will play a crucial role in preserving financial autonomy in the crypto space.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act was originally introduced by Tennessee Senator Bill Hagerty on Feb. 4, and it was designed to provide a regulatory framework for overcollateralized stablecoins like Tether’s USDT and Circle’s USDC. However, a revised version of the bill was released in March, and includes stricter Anti-Money Laundering (AML) provisions, enhanced reserve requirements, liquidity mandates, and more rigorous sanctions checks. These new measures are expected to give US-based stablecoin issuers a competitive advantage over offshore entities.
At the White House Crypto Summit, US Treasury Secretary Scott Bessent talked about the strategic importance of stablecoins when it comes to maintaining US dollar dominance in global payments. He stated that stablecoins could reinforce the US dollar’s role as the world’s reserve currency, ensuring continued reliance on the American financial system. This reliance is also cemented by the fact that centralized stablecoin issuers back their digital assets with US bank deposits and short-term cash equivalents, including US Treasury bills. This significantly drives up demand for the US dollar and US debt instruments.
Collectively, stablecoin issuers hold more than $120 billion in US government debt, positioning them as the 18th-largest buyer of US Treasury securities worldwide.
HUD Explores Blockchain and Stablecoins for Grants
Stablecoins are also gaining traction in other areas in the US. In fact, the US Department of Housing and Urban Development (HUD) is reportedly exploring the use of blockchain technology and stablecoins for certain functions in the agency.
According to a report by ProPublica on March 7, the department discussed using blockchain to monitor grants, with internal meetings and documents revealing interest in using stablecoins to process payments for HUD grantees. The experiment could first be tested in a specific office before broader implementation across the agency.
Some officials see this initiative as a potential trial run for expanding blockchain and crypto use across the federal government. A meeting last month considered a project in which the Community Planning and Development (CPD) office, which manages billions in grants for affordable housing and homeless shelters, would track funds to a grantee using blockchain technology.
However, internal reactions were mixed. One meeting attendee said that the need for such a project was “not well articulated,” while another HUD official criticized the idea as “dangerous and inefficient.” This is due to concerns over complexity and potential volatility in stablecoin payments.
A follow-up meeting revealed a more divided stance, with some HUD staffers suggesting that blockchain technology could facilitate grantee payments and others advocating for a more stable currency rather than traditional cryptocurrencies. A finance official mentioned that blockchain implementation could begin with CPD before expanding further. Despite these discussions, a HUD spokesperson clarified to ProPublica that the department has no immediate plans to implement blockchain or stablecoins.
President Donald Trump has openly supported the crypto industry, and the reported HUD initiative aligns with the cost-cutting strategies of Elon Musk, who has championed blockchain as a tool for reducing federal spending.
Binance Receives $2 Billion Stablecoin Investment
Meanwhile, Abu Dhabi-based investment firm MGX made a major move into the crypto sector with a $2 billion investment in Binance, which makes it potentially one of the largest funding deals in the industry’s history. Binance announced on March 12 that this transaction was the exchange’s first institutional investment and will be funded entirely through stablecoins. However, Binance did not share any details about which stablecoin was used for the transaction.
For MGX, this investment was its first venture into crypto, and added to its existing focus on emerging technologies like data centers, clean energy, and artificial intelligence. The firm stated that its investment in Binance forms part of its vision of fostering innovation at the intersection of AI, blockchain technology, and finance.
As the largest crypto exchange by user base and daily transaction volumes, Binance claims to have more than 260 million registered users. According to CoinMarketCap, the platform currently lists 466 cryptocurrencies. In response to the rapid rise of altcoins, Binance is also considering implementing quality control measures for its listing process.
Overall, the broader crypto sector is waiting for a resurgence in venture capital funding, with 2025 shaping up to be a strong year for investment. In February alone, 137 crypto firms raised a total of $1.11 billion, according to data from The TIE. After a combined $13.6 billion in venture capital funding in 2024, crypto firms are projected to raise more than $18 billion this year, based on estimates from PitchBook.
Amount raised by category in February of 2025
A lot of this anticipated growth is linked to positive regulatory developments in the United States and expectations of more favorable financing conditions. HashKey Capital CEO Deng Chao believes that a supportive macroeconomic environment, driven by US policies and the formalization of crypto regulations, is expected to fuel more venture capital investments in the sector throughout 2025.
Despite recent macroeconomic challenges, including trade-war tensions and recession fears that led to a downturn in asset prices, financial conditions are expected to improve in the coming months.
This article was originally Posted on Coinpaper.com
