Beyond the GENIUS Act: Regulatory Gaps and Operational Challenges in Stablecoin Adoption

Authors

David Krause, Marquette University

Abstract

The enactment of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in July 2025 represents a pivotal shift in the digital asset landscape, providing a federal framework for payment stablecoins and addressing critical issues of transparency and reserve backing. However, this Article argues that the GENIUS Act addresses only a subset of the systemic inefficiencies hindering the transition of stablecoins from speculative instruments to institutional-grade financial tools. Through an analysis of current market data and regulatory gaps, this Article identifies four persistent challenges: fragmented liquidity across geographic corridors, practical spendability constraints rooted in tax and accounting treatment, unresolved legal questions regarding custody and yield-bearing instruments, and a lack of standardized fraud and dispute management infrastructure. Furthermore, it explores the emerging frontier of direct tokenized settlement as a potential successor to the stablecoin model. The Article concludes that while the GENIUS Act is a milestone, achieving systemic financial utility requires addressing these operational and legal deficiencies through continued collaboration between regulators and the private sector.

Recommended Citation

David Krause, Beyond the GENIUS Act: Regulatory Gaps and Operational Challenges in Stablecoin Adoption, 80 U. Mia. L. Rev. 337 (2026).
Available at: https://repository.law.miami.edu/umlr/vol80/iss2/5