3 Must-Watch Stocks Poised to Benefit from GENIUS Act Stablecoins

Key Points

• The GENIUS Act passed the U.S. Senate last week with bipartisan support.
• The bill aims to establish a regulatory framework for stablecoins, digital assets designed to maintain a stable value of $1.
• Several public companies have already launched their own stablecoins to add revenue streams, reduce fees, or enhance customer loyalty.

Crypto investors are contemplating a "stablecoin summer" in the wake of the GENIUS Act, which passed with 68-30 Senate support last week and now moves to the House of Representatives for further consideration. While the bill still needs to pass the House, several revisions have been included in the current version to garner support from both Democratic and Republican teams, and it's widely expected that President Trump will sign it into law if the House votes in favor.

The bill establishes a framework for so-called stablecoins, which aim to maintain a stable value rather than fluctuating violently like most cryptocurrencies.

Stablecoin regulation opens up new opportunities for financial institutions and public companies seeking faster and cheaper transactions, and today, we’ll look at three companies already building a framework to benefit from these digital assets.

How Stablecoins Work and Why the GENIUS Act Could Proliferate Them

Stablecoins represent a unique use case for cryptocurrencies.

And let’s face it, up until now, crypto use cases have primarily been speculation, avoiding regulations, or partaking in illicit transactions.

But a stablecoin doesn’t want volatility. Instead, stablecoins seek to maintain a ‘stable’ value by pegging assets to an existing asset like a currency, commodity, or other cryptocurrency. 

For example, USDC is a stablecoin backed 1:1 by low-risk assets, such as dollars, Treasury bills, and commercial paper. A counter asset matches each stablecoin token, so each USDC token you own has a corresponding dollar bill held by the issuer.

Stablecoins are a relatively new feature in the cryptocurrency universe, but the fast-tracked legislation highlights their potential. The GENIUS Act, which stands for Guiding and Establishing National Innovation for U.S. Stablecoins (groan), lays out guidelines for who can and can’t issue a dollar-backed stablecoin in the U.S.

In addition to establishing rules for setting up and issuing stablecoins, the bill removes stablecoin oversight from the Securities and Exchange Commission (SEC) by labeling them as a non-security, which places jurisdiction into the hands of the U.S. Treasury. Some other key factors from the bill of note to investors include:

• Provisions to allow federal and state-qualified issuers
• Requires full backing (1-to-1) with liquid assets separated from operational capital
• Subjects issuers to Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations by labeling them as financial institutions

While the algorithmic stablecoin issuers may not like these rules, the strict reserve requirements and financial institution designations open qualified issuers to a new range of investors and customers. Transparency and regulatory compliance are essential if stablecoins are to compete with current payment systems, such as credit cards and banks. This bill provides the industry with much-needed clarity.

However, as we’ll discuss next, it isn’t just the financial sector that is getting excited about the potential of stablecoins.

3 Public Companies Getting Ahead of the Crowd

The GENIUS Act still needs a House vote and Presidential signature to become law, but the tailwinds are clearly in place for stablecoins to become part of the modern financial system.

The decline of credit card companies like Visa Inc. NYSE: V and Mastercard Inc. NYSE: MA on the bill’s success is further evidence that stablecoin disruption is on the horizon; here are three companies already working on their tokens.

Fiserv: Leverage Stablecoins for a More Efficient Financial Network

Fiserv Inc. NYSE: FI entered the headlines almost immediately after the bill passed the Senate, announcing its own FIUSD stablecoin, which is set to launch before the end of 2025.

Operating on the Solana network, the FIUSD token will streamline transactions for the company’s 3,000 banking clients and six million retail clients.

FIUSD is designed for backend operations, including internal settlements and transfers, invoice processing, and international money transfers. Utilizing stablecoins for these transactions offers faster processing and lower fees.

Fiserv has two revenue streams from the initiative: transaction fees and reserve asset yields.

PayPal: First Mover Advantage in Public Stablecoins

PayPal Holdings Inc. NASDAQ: PYPL is the pioneer of publicly traded stablecoin issuers, having launched the PYUSD token in 2023. Dollars and other low-risk liquid assets fully back the PYUSD stablecoin, with its primary use case focusing on high-friction transactions, such as large cross-border transfers.

PayPal predicted the path of stablecoins more accurately than most active crypto traders, and now it's positioned to benefit from its first-mover advantage.

PYUSD removes friction from payments and encourages users to engage more deeply with the platform, where PayPal has established relationships with thousands of merchants.

PYPL shares have been slowly climbing out of their hole, too, finishing up almost 5% in the last month.

Walmart: Reducing Costs and Improving Customer Loyalty

Walmart Inc. NYSE: WMT hasn’t officially launched a stablecoin, but the benefits it would provide to a discount retailer would be undeniable.

While it would need to get around specific provisions laid out in the current bill, like the ‘Big Tech’ rule, a WMT-issued stablecoin would allow the retailer to:

• Reduce Fees - A WMT stablecoin would slash the 2-4% standard credit card transaction fee paid by retailers for every customer sale, boosting revenue on every transaction.
• Reduce Wait Times - A stablecoin transaction would clear faster than a bank or ACH, providing the company with more liquidity.
• Enhance Customer Rewards - Stablecoins could trigger new customer rewards programs that seamlessly track online and in-store sales.

Note that stablecoins are still relatively new and largely unknown to the vast majority of the U.S. population. Widespread adoption may take time, so don’t invest in stablecoin issuers thinking you’ll make a quick profit.

These are long-term investments in a growing ecosystem that will pay outsized rewards years down the road.