Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets Regulations
Grayscale ETF Wins SEC Approval for 5 Crypto Assets
Crypto | July 2, 2025
SEC Approves Grayscale ETF With Five Major Crypto Assets, Signalling Broader Regulatory Path for Multi-Asset Funds
On June 27, 2025, the U.S. Securities and Exchange Commission (SEC) officially approved the conversion of Grayscale’s Digital Large Cap Fund (GDLC) into a spot exchange traded fund (ETF). The fund is now listed on NYSE Arca, offering investors access to five major crypto assets in one regulated product. It's the first time that a U.S. spot ETF includes not just Bitcoin and Ethereum but also Solana, XRP and Cardano, establishing a new precedent for how diversified crypto products can be structured and approved under SEC oversight.
What the ETF Holds
The Grayscale Digital Large Cap ETF largely follows the CoinDesk Large Cap Select Index, which rebalances monthly. As of July 1, 2025, the fund holds:
- 80.2% Bitcoin (BTC)
- 10.4% Ethereum (ETH)
- 4.4% XRP
- 3.0% Solana (SOL)
- 1.9% Cardano (ADA)
GDLC now offers direct access to these assets through a public listing.
What Changed
Prior to this approval, GDLC operated as a closed-end trust on OTC markets. It lacked daily liquidity and tradeed at a discount or premium to the fund’s net asset value. The new ETF lets large investors swap crypto directly for shares in the fund, and vice versa, which helps align market prices with the actual value of the crypto held.
See: SEC Advances XRP ETF Review, Investors Await Decision
Grayscale completed the conversion of approx $775 million USD in assets by the SEC’s July 2 compliance deadline, making the ETF now the largest multi-crypto fund of its kind in the United States.
Implications of the SEC's Approval
This is the first time U.S. investors can now access a range of large-cap crypto assets, beyond just Bitcoin and Ethereum, through a regulated spot ETF. It reduces the need to manage separate holdings or rely on offshore exchanges.
Analysts now estimate a 95% likelihood that ETFs for XRP, Solana, and Litecoin will be approved in the U.S. later this year. Major firms including Bitwise and Franklin Templeton have already submitted filings.
This approval reinforces legal and regulatory precedent and build's on Grayscale’s 2023 legal victory, which challenged the agency’s rejection of a Bitcoin ETF. That ruling continues to impact how the SEC responds to ETF applications. It also highlights the SEC's evolving policy on crypto including assets that were previously under regulatory scrutiny such as XRP. The SEC is now clearly willing to consider broader crypto exposure in compliant funds, even while legal classification questions remain up in the air.
See: SEC Clears Crypto Staking. What It Means for Canada
The door to broader index-based crypto products is likely to follow, such as new ETFs tied to crypto indices, sector themes, and/or platform categories. See NCFA’s article on the crypto ETF battle intensifying with XRP, Solana, and Dogecoin.
Canadian Lens
Canada continues to lead with crypto ETF adoption. The Purpose XRP ETF launched on the TSX on June 18, 2025, while Canadian investors already have access to ETFs for Bitcoin, Ethereum, and Solana. See also NCFA’s report on Canada’s first Solana spot ETF with staking.
For Canadian fintechs and investors, growing alignment in North American regulation signals an opportunity to expand services built around compliant digital asset products. As U.S. markets open up to a wider mix of crypto ETFs, Canadian firms offering custody, compliance, or portfolio tools will be well positioned to support cross-border demand and deepen product innovation.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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OSFI Drafting New Framework to Regulate Stablecoin Issuers
Crypto Regulation | June 30, 2025
Image: Freepik/rawpixel.com
Federal Regulators Creating Rules for Stablecoins in Canada
On June 26, The Logic and Morningstar reported that Canada’s federal government is drafting a new legislative framework for stablecoin issuers. The Department of Finance is leading the effort, with support from the Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada.
See: Key Findings from 2025 Advanced Payments and Fintech Survey
The framework is expected to define which companies can issue stablecoins, what assets they must hold in reserve, and how redemption and consumer protections will work. While OSFI already issued guidelines in early 2025 for how banks and insurers must treat crypto assets like stablecoins on their balance sheets, the new law will apply directly to stablecoin creators for the first time.
Key Takeaways
1. Stablecoin legislation is in active development
On June 26, 2025, OSFI Superintendent Peter Routledge confirmed that the Department of Finance is drafting stablecoin legislation.
Peter Routledge, Superintendent of Financial Institutions via The Logic article:
“We are preparing for the day that there is a legislative framework that gives us the authority to regulate and supervise that particular innovation in a constructive way.”
2. New law will likely include licensing and redemption rules
Although the draft bill hasn't yet been released, Finance Canada has signalled that the framework may include:
- Registration or licensing for Canadian dollar stablecoin issuers
- Reserve asset standards, such as cash or high-quality securities
- Clear redemption terms for holders
- Disclosure and audit requirements
See: U.S. Passes First Stablecoin Law with GENIUS Act
This would align Canada with international approaches, such as the EU’s MiCA regulation and the global Financial Stability Board’s recommendations.
3. QCAD offers an early Canadian example of proactive alignment
QCAD is a Canadian dollar stablecoin backed by reserves held in Canadian financial institutions, issued by Stablecorp. It's governed by a legal trust structure and verified through third-party attestations. On June 16, 2025, Stablecorp filed a preliminary prospectus with the Ontario Securities Commission under the CSA’s interim framework for fiat-referenced crypto assets and per the release, "[QCAD] will bring the first regulated Canadian stablecoin to market", and is a good example of Canadian issuers proactively taking steps to comply with rules the upcoming law may apply.
4. OSFI guidance for banks and insurers is separate but aligned
In February 2025, OSFI released the Capital and Liquidity Treatment of Crypto-asset Exposures for Banks guideline (after holding consultations), which applies only to federally regulated financial institutions. It defines how banks and insurers must treat stablecoins and other crypto assets in terms of capital and liquidity requirements.
See: BIS Stablecoin Warning Meets US Policy Momentum
- OSFI’s guideline classifies stablecoins that meet strict requirements as Group 1b assets
- USDC is currently the only stablecoin OSFI formally recognizes as meeting those criteria
- Other stablecoins like QCAD may qualify later once formally reviewed
5. The new law will fill a regulatory gap for non-bank issuers
While OSFI can guide how stablecoins are handled by banks and insurers, it does not currently have legal authority to supervise stablecoin issuers directly. The new legislative framework is expected to close that gap. This will ensure that any company issuing a Canadian dollar stablecoin is subject to consistent national rules, regardless of whether they are a financial institution or a fintech startup.
Outlook
Stablecoins are gaining traction in Canada and globally, but the companies that issue them operate in a legal grey area. The new federal legislative framework will give regulators the tools to oversee how stablecoins are issued, backed, and redeemed. This will help protect consumers, reduce financial risk, and give fintechs a clear path towards compliance. For stablecoin projects like QCAD, the upcoming rules will provide an opportunity to become fully recognized under Canadian law.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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U.S. Prepares to Count Crypto in Mortgage Rules
Crypto Adoption | June 27, 2025
Image: Freepik/studiogstock
U.S. Housing Agency Tells Lenders to Prepare for Crypto in Mortgage Risk Assessments
For the first time, cryptocurrency is being considered in U.S. mortgage financing. On June 25, 2025, the Federal Housing Finance Agency (FHFA) told Fannie Mae and Freddie Mac to prepare proposals that would let homebuyers include crypto assets when being assessed for their mortgage applications.
In a public post on X, FHFA Director Bill Pulte said this change supports the U.S. goal of becoming a global leader in crypto. The order allows crypto to be included as a financial reserve, meaning lenders could soon treat some digital assets the same way they treat cash or stocks when reviewing mortgage risk. This is not a new rule yet but it's the start of a planning phase where the agencies will write and review draft policies.
See: The Intersection of Fintech and Real Estate: How Innovation is Rebuilding the Foundation of Property Transactions
After significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage.
SO ORDERED pic.twitter.com/Tg9ReJQXC3
— Pulte (@pulte) June 25, 2025
What It Means for Homebuyers
- Buyers wouldn't have to sell their crypto to meet mortgage reserve requirements, which can help them avoid triggering untimely tax bills
- The assets will count only as financial reserves, not as income
- Only crypto held on regulated U.S. platforms will qualify. Wallets outside those platforms including self-custody will likely not be accepted
- Because prices can move quickly, Fannie and Freddie are expected to apply discounts when valuing these assets, a move known as a "haircut."
Remarkable to see the crypto sentiment change so rapidly in the United States. This latest change reflects the wider effort by U.S. officials to include digital assets in traditional finance. An article in Barron’s noted that reserve rules may apply to bitcoin, ether, and other widely held tokens. The Washington Post also reported concerns about volatility, especially with some tokens rising or falling by 40% or more in a single day.
What This Means for Fintech in Canada
While this directive applies only in the United States, it sends a strong message. If crypto is accepted in mainstream mortgage reviews, financial technology firms in Canada may start building new tools to support similar models. That could include connecting wallets to mortgage applications or building credit models that accept tokenized savings.
See: Halal Mortgage Financier, Manzil, Crosses $50 Million
For Canadian fintechs focused on lending, payments, or digital identity, this is an early signal of significant changes to come. With more Canadians holding crypto, pressure will likely grow for Canadian regulators to respond or risk falling behind global standards. That's what happens when your a country deemed 'fast follower'.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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BIS Stablecoin Warning Meets US Policy Momentum
Stablecoins | June 27, 2025
BIS Says Stablecoins Fail Key Money Tests as US law Progresses
On June 24 2025, in chapter 3 of its Annual Economic Report, "The next generation monetary and financial system" (38 page PDF), the Bank for International Settlements (BIS) warns that stablecoins fail to function as real money. The report arrives just as the United States moves closer to signing the GENIUS Act into law, a federal bill that would bring stablecoin issuers under formal supervision.
The report outlines how stablecoins fail to meet the key tests of singleness, elasticity, and integrity, which defines whether a payment instrument can be accepted at face value, scale with economic needs, and operate safely in the broader financial system.
BIS Report states
“Stablecoins perform poorly when assessed against the three tests for serving as the mainstay of the monetary system,”
BIS Says Stablecoins Fail Three Tests
The BIS applies three core tests to any money-like instrument, and casts serious doubt whether private stablecoins can ever serve as a true foundation for payments or monetary exchange, even if regulated.
See: Stablecoins Are Growing Faster Than You Think
- Singleness - uniform acceptance at face value. Stablecoins often trade at small discounts or premiums and are tagged by issuer, pg85 "much like 19th century private banknotes"
- Elasticity - ability to respond to liquidity demands. Stablecoins must be pre-funded and cannot expand supply dynamically, unlike bank credit backed by central bank reserves. pg75, "Modern real-time gross settlement (RTGS) systems are the canonical example of the need for elasticity. In a two-tier banking system, the central bank is ready to provide reserves to financial institutions elastically at the policy rate against high-quality collateral."
- Integrity - strong safeguards against money laundering and illicit finance. The BIS highlights how unhosted wallets and fake addresses reduce oversight and allow stablecoins to bypass basic controls.
The BIS also says broader risks to financial stability, including potential fire sales of safe assets held in reserve and cross-border flows that could undermine monetary sovereignty in emerging markets.
Genius Act Regulates Stablecoins But Doesn't Call Them Money
The GENIUS Act has now passed the Senate with strong bipartisan support and is moving to the House for consideration but does not treat stablecoins as public money. It takes a supervisory approach while explicitly banning certain features, key provisions include:
See: Amazon and Walmart Exploring Merchant-Led Stablecoins
- Requiring issuers to hold reserves in high quality liquid assets
- Limiting stablecoin issuance to licensed entities
- Prohibiting interest on balances to prevent shadow banking
- Mandating public audits and strict redemption rights
- Allowing federal regulators to shut down noncompliant operations
The bill has advanced in both the House Financial Services and Senate Banking committees and has bipartisan backing. Supporters argue that clear rules are needed to protect consumers and prevent runs on poorly backed coins. But the BIS report raises a bigger question. Even if stablecoins are regulated, should they be foundational to the payment system at all?
Canada Will Need to Decide
While Canada has not yet introduced comparable legislation as the GENIUS Act in the U.S., the BIS developments will influence local debates. Stablecoins are already used by some Canadians for crypto trading, remittances, and access to foreign currency.
The Bank of Canada has shelved retail CBDC development while continuing digital currency research and scenario planning, and OSFI is developing crypto exposure guidance for regulated financial institutions.
See: Quantum Safe Stablecoins Meet Real Time Finance Needs
If the US establishes a regulated market while the BIS encourages a public infrastructure model, Canadian policymakers and fintechs may need to navigate both. That includes deciding whether to integrate regulated stablecoins, develop domestic alternatives, or back a central bank issued platform.
Conclusion
Both public institutions and private developers are building in parallel but the debate is no longer theoretical, and Canada's choices made now will impact financial systems as they grow and evolve.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Coinbase MiCA Licence Unlocks Europe Wide Crypto Access
Coinbase | June 25, 2025
Image: Freepik/macrovector
Coinbase’s EU Licence Highlights How Unified Crypto Rules Unlock Market Access (while Canada faces pressure to modernize)
Coinbase secures a Markets in Crypto Assets (MiCA) licence in Luxembourg and unlocks access to all 27 EU member states under one regulatory framework. The licence allows Coinbase to provide regulated custody, trading, and token services across Europe without reapplying in each country.
MiCA is the EU’s first unified crypto regulation. It sets common rules for disclosures, capital requirements, and consumer protection. Coinbase is among the first major global exchanges to receive full MiCA approval, joining a wave of early adopters now operating across the EU under a unified licence. Market wide compliance in the EU is now real, and opens up a single market of 450 million people under consistent regulatory oversight.
Canada’s Regulatory Challenge
Canada uses a mix of federal registration through FINTRAC and provincial securities oversight. While there is a securities passport system under the Canadian Securities Administrators (CSA), it's not uniformly applied across all provinces. Ontario, for example, requires dual filings. The system also does not unify crypto regulation or streamline compliance across federal and provincial levels.
See: U.S. Passes First Stablecoin Law with GENIUS Act
In contrast, MiCA offers a single licence with direct access across all EU countries. For Canadian fintechs, this structural difference adds complexity and slows growth. Canada’s fintech sector must now compete with peers operating under unified rules, faster timelines, and lower costs.
Canada's Missed Opportunity
In a June 2025 opinion piece for Cointelegraph, Jillian Friedman, COO of Symbiotic, warned that Canada risks losing ground:
“While other countries move toward integrating crypto into their financial systems, Canada is lagging, costing the country capital, talent and competitiveness.”
Crypto policy was grossly missing from all federal party platforms during the 2025 election, a “missed opportunity” at a time when early-stage VC activity is dropping and top STEM talent continues to leave. Friedman doubled down on Canada's issues including:
- Canadian seed-stage VC deals hit pandemic-era lows in Q1 2025 (according to CVCA data)
- CSA’s classification of stablecoins as securities continues is 'wrong' and will restrict adoption
- Crypto firms struggle to open basic bank accounts, even when AML risk is low
- Up to two-thirds of software engineering graduates are exiting Canada
See: SEC Clears Crypto Staking. What It Means for Canada
She argues that Canada should move quickly to unlock access to capital, offer tax incentives, and remove policy barriers if it wants to remain competitive.
Other Major Crypto Firms with MiCA Licenses
Several global firms have followed Coinbase in securing MiCA licences:
- Crypto.com, OKX, and Bitpanda received MiCA authorization in early 2025
- Bybit gained approval from Austria’s FMA in May 2025
- BitGo received its licence via BaFin in Germany
- MoonPay, BitStaete, ZBD, and Hidden Road secured early approvals in the Netherlands
Now do those same crypto firms also operate in Canada?
While several MiCA-licensed firms also operate in Canada the split below shows how global players are prioritizing the EU as a unified growth market, while (possibly) treating Canada as a smaller fragmented market.
See: UK FCA Plans Full Crypto Licensing Regime by 2026
| Firm | MiCA Licence | Canadian Operation |
| Coinbase | Yes | Yes (OSC restricted dealer) |
| Crypto.com | Yes | Yes (OSC restricted dealer) |
| OKX | Yes | No active registration |
| Bitpanda | Yes | No active registration |
| Bybit | Yes | Previously fined in Ontario; no active registration |
| BitGo | Yes | No known retail presence |
Why This Matters for Canadian Competitiveness
MiCA offers a clear example of how coordinated regulation can improve access, speed, and investor confidence. Prime Minister Mark Carney’s pledge to reduce interprovincial trade barriers could open the door to change, but digital asset policy must be part of the conversation.
See: The Crisis Canada and Fintech Can’t Afford to Waste
Without reducing regulatory burden and interprovincial barriers, Canada risks falling behind not because of lack of innovation but because of unclear rules that limit scale, delay market access, and create friction for investors.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Coinbase Pushes for Tokenized Equities Approval
Tokenization | June 18 2025
Coinbase Seeks SEC Green Light to Trade Tokenized Stocks as Global Race Just Got Real
As covered by Retuers, Coinbase is officially asking the U.S. Securities and Exchange Commission (SEC) to approve tokenized equities (or stocks), a new class of financial product. These would be blockchain representations of traditional equities, such as Apple or Tesla, designed to trade 24/7 with almost instant settlement and lower overhead. Coinbase is seeking a no-action letter or regulatory exemption from the SEC, and if they grant it, Coinbase would be the first major U.S. exchange operating with such tokenized products, evolving well beyond just a standard crypto trading exchange.
See: Coinbase Buys Deribit for $2.9B to Lead Crypto Derivatives
The tokenized equity model would allow retail and institutional users to access fractional ownership of blue-chip stocks via a blockchain interface and operate largely without the constraints of traditional brokerage platforms. For example transactions could take place globally, 24 hours a day, without relying on legacy clearing infrastructure. It could mean significant improvements in market efficiency, reduce settlement risk and include new financial products natively on-chain.
Kraken, MiCA, and the Global Tokenization Playbook
While Coinbase looks to break new ground in American markets, other jurisdictions are already operating. Rival exchange Kraken has launched tokenized stock trading for non-U.S. customers through its partnership with Swiss-based Backed Finance. For example, tokenized versions of Apple and Tesla stock, bAAPL and bTSLA respectively, are live pioneering examples of tokenized equities executed issued on the Solana blockchain, backed by 1:1 real shares held in custody, and tradeable with no minimum investment size and operate legally under global regulatory frameworks with blockchain flexibility, and 24/7 trading.
See: OSC Opens Door for Tokenized Long-Term Funds
Europe is ahead of the curve on regulation. The EU’s MiCA framework was fully implemented as of 2024, providing legal clarity for tokenized securities across 27 member states. In Asia, Hong Kong is piloting tokenized gold, bonds, and equities under regulatory supervision. These jurisdictions are showing that comprehensive tokenization frameworks can unlock innovation while still preserving investor protection and market integrity.
Regulation, Liquidity, and Infrastructure
Tokenized securities may require broker-dealer registration, SEC exchange approval, and compliance with the Investment Company Act. Since, Coinbase is not currently licensed as a broker-dealer, it may need a partner or entirely new structure to support these offerings legally.
There are also questions about liquidity. The World Economic Forum has identified low secondary market trading volumes and lack of standardization as persistent challenges in real-world asset tokenization.
See: Coingecko 2024 Report: Investing in Tokenized RWAs
While the tech stack can actually enforce compliance rules directly within smart contracts using standards for Real World Assets (RWA) like ERC-3643, adoption of these instruments will depend on regulators aligning globally and investors gaining trust.
What This Means for Canada’s Fintech and Capital Markets
If the U.S. and EU formalize tokenized security frameworks, capital will flow toward platforms offering speed, access, and interoperability, leaving slow movers behind. Companies should be exploring how to integrate tokenized equities into their product roadmaps while remaining compliant. NCFA and its members can play a leadership role in what responsible tokenized finance, launch educational initiatives, and collaborate with global infrastructure providers. At the of the day, tokenized assets are poised to become a competitive advantage or missed opportunity.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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U.S. Passes First Stablecoin Law with GENIUS Act
Crypto | March 18, 2025
U.S. Senate Passes Landmark Stablecoin Law (68-30 vote)
On June 17, 2025, a watershed moment for digital finance and crypto with the U.S. Senate passing the GENIUS Act, bipartisan 68-30 vote, establishing the country’s first federal regulatory framework for stablecoins. This legislation is the most significant digital asset policy breakthrough to date in the United States.
The GENIUS Act stands for 'Guiding and Establishing National Innovation for U.S. Stablecoins'and lays out clear rules for the issuance, required reserves, transparency, and oversight of U.S. dollar backed stablecoins. It's expected to boost financial innovation in America by providing a coherent national policy to streamline the governance patchwork created by state-to-state rules. The stablecoin market has now surpassed $260 billion in total value (up about 22% in 2025 alone), and is growing rapidly with rising institutional demand.
See: Amazon and Walmart Exploring Merchant-Led Stablecoins
As reported by WSJ, Senator Cynthia Lummis (R-WY, one of the bill's key sponsors) said:
“This is the first step in establishing trust, protecting consumers, and ensuring the dollar remains the global standard for digital finance,”
Key Provisions of the GENIUS Act
The bill outlines strict guardrails for stablecoin issuers to prevent another collapse like TerraUSD while ensuring stability, liquidity, and auditability:
- 1:1 Reserve Backing - All issued stablecoins must be backed by high-quality liquid assets such as U.S. dollars or short-term Treasury bills
- Mandatory Monthly Audits - Issuers are required to publish monthly attestations of reserves and maintain real-time disclosure dashboards
- Licensed Issuers Only - Issuance is limited to insured banks, qualified trust companies, and fintechs that meet specific federal criteria
- Conflict of Interest Limits - Members of Congress and senior executive officials (but notably not the President) are barred from directly profiting from stablecoin issuance
- Foreign Issuer Restrictions - Oversight mechanisms are in place to manage foreign-controlled issuers and systemic risk exposure
Implications
The GENIUS Act delivers some legal clarity to a sector long operating under ambiguous guidance from regulators.
Notably, the issuer of USDC, Circle saw its pre-IPO share price boost nearly 10% on the news, rising from $31 to over $160 as investor confidence rebounded. The company’s CEO Jeremy Allaire explained the bill as “the foundation of dollar dominance in the digital era.”
See: Stablecoin Payments Have Wings – Are You Ready?
The bill is still not without some controversy as critics flagged the exclusion of President Trump from the conflict of interest restrictions - seen as politically motivated and related to the Trump family's interests and ties to private stablecoin ventures.
The bill now moves to the House of Representatives to be reconciled with the STABLE Act, and then once approved in both chambers the bill would be sent to President Trump for signing the first major federal stablecoin bill into law.
Outlook for Canada and Fintechs
Will Canadian regulators follow with similar national standards for fiat-backed digital assets? As OSFI and FINTRAC review their guidance, Canadian fintechs operating in cross-border payments, custody, and token issuance will begin to face rising pressure to align with U.S. rules or risk falling behind in market access and credibility. The global sector is consolidating quickly and Canadian innovators must determine whether or not to build on this momentum with their own regulatory clarity.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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