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- Zafar Naik
Zafar Naik
- Reviewed by:
Qadir AKQadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Nov 24, 2025 11:06 UTC
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Analyst Says GENIUS Act Reshapes U.S. Debt Markets; Critics Slam “Overblown” Claims
Analyst claims the GENIUS Act redirects stablecoin reserves into U.S. debt, reshaping Treasury demand.
Critics argue the interpretation is exaggerated, noting the law also permits cash reserves.
The debate highlights rising tensions over stablecoin regulation, Treasury influence, and Fed authority.
A sharp debate has broken out after author & analyst Shanaka Anslem Perera argued that the GENIUS Act didn’t just regulate stablecoins, but reorganized financial power inside the U.S. government.
His claim: the Treasury now controls a new, built-in engine for buying U.S. debt.
Supporters call it a plausible read of the numbers. Critics say it’s dramatic, selective, and flat-out wrong.
A Bold Claim: Stablecoins as Mandatory Treasury Buyers
Perera says the Act requires licensed stablecoin issuers to hold 100% reserves in short-term Treasuries or central bank cash, turning each new dollar-pegged token into an automatic purchase of U.S. government debt.
Under his frame, stablecoins become a built-in demand engine – a form of “privatized QE” that runs outside the Federal Reserve’s reach.
He points to the Treasury’s own projections as evidence of intent. Secretary Scott Bessent expects the stablecoin market to grow toward $2-3.7 trillion by 2030, potentially making issuers one of the largest holders of U.S. debt.
Perera also cites JPMorgan’s decision to accept Bitcoin and Ether as institutional collateral, calling it a sign that Wall Street is adjusting to a new structure shaped by Treasury influence rather than the Fed.
Why the Theory Caught Fire
Stablecoins have become a core tool in emerging markets, where users often seek dollar stability amid inflation and capital controls.
Perera believes this global shift funnels capital straight into U.S. debt markets, strengthening Treasury financing while weakening the Fed’s influence over borrowing costs.
Community Reaction: Sharp and Divided
Critics didn’t hold back.
Several users pointed to the law’s own text, noting it explicitly allows U.S. coins and currency as reserves, not just Treasuries. That detail alone challenges the idea of “forced” government-debt buying.
Others accused the analysis of overstating the Treasury’s intentions and inflating stablecoin growth estimates. Some argued the real long-term strategy may center on U.S. accumulation of Bitcoin and gold – not stablecoins driving debt markets.
Why It Matters
Stablecoin regulation has evolved from a niche policy discussion into a major pillar of U.S. financial strategy.
The stakes are no longer limited to crypto: they now reach into global dollarization, Treasury funding, and the long-running balance of power between the Fed and the Treasury.
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FAQs
The GENIUS Act is the new U.S. federal law that finally regulates dollar-pegged stablecoins. It requires licensed issuers to back every stablecoin 100% with safe, liquid assets (cash, bank deposits, or short-term Treasury bills) and subjects them to strict banking-style oversight.
It’s seen as helpful for setting clear rules and boosting trust in stablecoins, but critics worry it could reshape financial power in unpredictable ways.
Some believe growing Treasury-backed stablecoins could limit Fed control, but others see the effect as modest and uncertain.
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