The recent passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act1 by the U.S. Congress has sparked considerable discussion both domestically and abroad, garnering bipartisan support. However, the debate surrounding cryptocurrencies, as expected, has generated more confusion than clarity.
Within the crypto community, opinions are divided. Some view cryptocurrencies and blockchain technology as a cornerstone of financial independence, free from governmental oversight. Conversely, others see it as a breeding ground for scams and get-rich-quick schemes preying on speculative ventures. Further, for billions worldwide who lack access to traditional banking, carefully governed cryptocurrencies could drastically reduce international transaction costs, potentially dropping fees from dollars to mere pennies.
The Advantage of Controlled Crypto
In collaboration with Renco Manufacturing at their Colebrook, New Hampshire facility, which houses American Performance Polymers, we explored ways to enhance the production of medical gloves and establish a state-of-the-art data center.
This facility, located near the Canadian border, benefits from direct access to the TransCanada pipeline. Our proposed plan involves utilizing cost-effective Canadian natural gas, processed using advanced high-temperature natural gas pyrolysis technology2. This process separates natural gas into its fundamental components – hydrogen and solid carbon – effectively eliminating carbon dioxide emissions. The resulting clean hydrogen will power both the medical glove manufacturing process and the data center operations.
Under the provisions of the Genius Act, a regulated crypto blockchain system could enable the use of stablecoins for monitored, financed, and regulated operations. More broadly, this presents opportunities to develop a robust sales platform for marketing Canadian natural gas on a global scale.
The GENIUS Act, short for “Guiding and Establishing National Innovation for U.S. Stablecoins Act”, mandates stringent regulations for stablecoins, to be established by federal and state authorities over the next year and a half. Stablecoin providers must maintain reserves equivalent to at least 100% of the stablecoin’s total value, subject to monthly verification according to detailed federal and state standards. The detailed regulations will take a year to be written, and another 120 days to come into effect, for a total of approximately 18 months following the act’s enactment.
It is crucial to recognize that stablecoins, under this framework, are potentially more secure than traditional U.S. banks. The latter often maintain coverage below 10%, a factor contributing to the global financial crisis of 2008. This resulted in significant losses for large asset holders exceeding the U.S. insurance limit of $250,000. In 2008, governmental intervention was required to bail out global banks, but now, these same problems may be avoidable.
Back in 2008, JPMorgan Chase acquired Bear Stearns with support from the Federal Reserve. Subsequently, the Federal Reserve extended assistance to the insurance giant AIG. Citigroup and Bank of America also sought aid from the Federal Reserve, Treasury, and the FDIC. New programs by the Fed were enacted to support financial institutions and provide liquidity to money and commercial paper markets.
The core principle is this: well-regulated stablecoins, fully asset-backed and rigorously monitored, represent a positive move. However, the possibility of a stablecoin failure remains. Therefore, investors should consider diversifying their stablecoin holdings to minimize potential losses. Spreading your investment among a variety of stablecoins will decrease possible loses to small amounts.
Stablecoins in Europe
Numerous stablecoins are pegged to the Euro. Capitalizing on uncertainty around the U.S. dollar stemming from trade policies and tariff disputes, they present an alternative to dollar-based systems.
The development of regulated, dollar-based stablecoins in the U.S. poses a significant challenge to European stablecoins. If the U.S. addresses its tariff issues, the Fed-controlled dollar could become highly appealing for low-cost blockchain transactions tied to global trade, given the dollar’s status as a global reserve currency. However, dollar instability could erode its value and dominance. In such a scenario, the Euro could emerge as a viable international competitor, potentially leading to a Euro-based coin challenging the dollar’s supremacy.
It is important to know that the BRICS3 nations – initially Brazil, Russia, India, China, and South Africa, now including Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates – are gaining influence. This bloc can now trade amongst themselves using local currencies, or use the Chinese renminbi for international settlements, currently accounting for 47% of intra-BRICS trade. BRICS is forecast to represent about 30 percent of global GDP in 2025, whereas the G-7 is at 42%.
Continued U.S. tariff policies and deficit spending may accelerate the decline of the dollar as the global reserve currency. While China faces limitations in completely replacing the dollar, nations are exploring trading in their own currencies. Still, the SWIFT system’s global confidence in the dollar remains a critical feature of international trade.
Euro Stablecoins
Currently, several Euro-backed stablecoins are available:
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Euro Coin, issued by Circles, is backed by Euro reserves held in European financial institutions.
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Euro Coin Vertible (EURCV), issued by Forge (a Société Générale subsidiary), is designed to integrate with traditional banking and comply with EU’s MiCA regulation, with a focus on non-European nations facing high inflation.
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StablR Euro (EURR) is a Euro-backed stablecoin that uses Tether’s tokenization platform, Hadron. Tether has not adopted the 2025 European MiCA regulation, and instead is focusing on high profits in non-EU states.
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Stasis Euro (EURS) is a popular Euro-backed stablecoin used in European markets as a hedge against USD-based asset volatility.
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Eurite (EURI), issued by Banking Circle, is designed for digital payments.
2025 European Regulation
In December 2024, the European Union enacted the Markets in Crypto-Assets Regulation (MiCA), to provide a framework for digital assets with regulations for stablecoins. These require reserves held in banks, transparent reserves, and oversight by financial authorities.
MiCA will enhance large scale stablecoins. A strong Euro, under MiCA, with stablecoins, represents great trading opportunities.
Conclusion
Well-regulated stablecoins can basis for reliable international trade and reduce costs. The social aspects of that can be enormous
The success will depend on the reliability of the international financial systems. Are we going to back the Swift System and the Dollar?
The benefits from stablecoins will increase trade, and the fees are going to go down.
Notes
1 Treasury Issues Request for Comment Related to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act at U.S. Department of the Treasury.
2 A review of methane pyrolysis technologies for hydrogen production on ScienceDirect.
3 About the BRICS at BRICS Website.