The GENIUS Acts and crypto
Bigs moves always bring about big concerns. As an investor in any financial market, you should not be ignorant of this. The future of cryptocurrency is gradually bending a direction few thought. After the Bitcoin ETF, there was several expectations about how it will become a leader in the field of merchant transactions. Bitcoin is undergoing its growth no doubt but it seems when it comes to units of accounting, big merchants still trust the US dollars.
We saw earlier moves of a pegged crypto to US dollars which brought about the name stablecoins. This brought about issuance of tokens like USDT and USDC, two private companies that are leading this board. Of course it is brought good returns on investment. A look at year to year profit for USDT especially and you can attest to this. This figures are about to explode, this is not just doubling up, a big boom.
Beyond just the USD, any country can decide to peg its Fiat too. The fact it, many are very familiar with US dollars for unit of accounting, a big hedge this is seeming for the US economy. The Biden tenure was fighting anything crypto, maybe they would have been further than this if they had seen the greenlight. The reverse has been the case for the newly elected president. Trump has been a big timer suppport.
You have to understand how government works: regulations. If the masses are interested in pegged US Dollar, why not regulate and stay in economic profit and dominance.
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We have seen the Trump tenure creating so many trade wars and it seems it will be winning this particular one; US dollars remaining a global unit of account. This is where the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Acts steps in. Recently signed into law last month by the US Parliament, this move represent trillions of dollar influx to the Stablecoins industry. This is operational in the US alone.
Nevertheless, you should how big the US economy is and how its economic actions has global effects. I wrote an article yesterday that emphasized on the fact that it is merchant that uses money. Stablecoins is more of a fiat currencies in a blockchain realm (centralized ones to be more precise). Of course there will be a rise of Stablecoins underdogs (decentralized) as time progresses. For NOW let's focus on what many are used too: paying for services and settling of account.
Maybe we should start from how big the US economy is currently. We are talking of a nominal GDP that exceeds $30 trillion: still the largest in the individual economy. How much worth of transaction goes on in the US daily? Of course, there are many markets to be considered before making this summation. For certain, we are talking figures at least in the trillions. What happens when at least 30% of this goes in through Stablecoins?
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Looking at global figures, the FOREX market already carries up to $7 trillion in approximation so we should be looking at at least double figures in the trillions. Transactions are moving into the digital realm and we are expecting a double up as paper notes continue to fade. New markets and investors will be moving into this realm courtesy of easy access and flexibility. Trillions is coming in and this is where the cryptocurrency industry will stand to benefit.
While Stablecoins will be an overheard (a global account balancer) this does not stop platforms coins and token operations. I had talked about these siding examples like Hive and HBD. How do i get my money in and out is something investors will be carefully citing. In the presence of doubt, a Stablecoins issuance creates more trust especially in a volatile market like crypto.
My biggest concerns are the merchants (entrepreneurs) who move money daily in the billions. Indeed this will remain another stepping stone for cryptocurrency to thrive. altcoin industries will bounce back in the process. Nevertheless, you should consider the project you are throwing your funds into; ambitionless projects will fade off with or without general crypto market growth. The rules are simple, Do your own research.
To conclude, let me add, the GENIUS Acts will bring progression in the world of cryptocurrency. Acceptance and usage is key when it comes to growth. The Stablecoins market will boom, maybe I will be looking at how USDT and USDC analysis in my Next article. They are the big player and they will be crossing fingers to remain so. There has been rumored suggestions about money privatization should private firms be issuing out Stablecoins. There are always oppositions that is for sure, for now, Stablecoins are proofing future worth.
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