GENIUS Act Ushers in New Era for Stablecoins, With Supply Projected to Grow Up to $75B: Bank of America

The recent passage of the GENIUS Act marks a pivotal moment for the U.S. digital asset landscape, according to Bank of America (BAC), which expects the new legislation to catalyze growth in stablecoin supply and broader adoption of tokenized financial products.

Signed into law last Friday by President Donald Trump, the GENIUS Act establishes long-awaited regulatory clarity for stablecoins—cryptocurrencies pegged to fiat currencies or real-world assets—paving the way for increased institutional participation and infrastructure development.

Stablecoin Supply Set to Expand

In a research note released last week, Bank of America projected that the total supply of stablecoins could rise by $25 billion to $75 billion in the near term, driven by new product launches, infrastructure investment, and heightened competition from tokenized deposits and money market funds. The current market capitalization for stablecoins stands at approximately $270 billion, according to CoinMarketCap.

The bank expects that over the next two to three years, the market will see consolidation among stablecoin issuers and growing use of tokenized assets across financial services, with further regulatory progress reinforcing that trend.

CLARITY Act to Define Digital Asset Classifications

The GENIUS Act sets the stage for additional regulatory advancements, including the CLARITY Act, which is currently awaiting Senate review after passing the House. That legislation aims to provide a definitive legal framework for digital assets by categorizing them as either securities or commodities—an issue that has long created uncertainty in U.S. crypto markets.

BofA analysts say that a clearer regulatory structure will encourage the adoption of tokenized money market funds and other blockchain-based financial instruments, enabling more traditional institutions to participate.

Banks Prepare for Entry Into Stablecoin Arena

According to the report, major U.S. banks are positioning themselves to issue their own stablecoins, favoring consortium-led models for governance and compliance. BofA CEO Brian Moynihan confirmed the bank has been actively preparing to enter the market and will act “when the time is right.”

While many banks are exploring cross-border use cases, most do not anticipate significant near-term disruption to domestic payment systems, the report added.

Impact on Treasury Market

Bank of America also highlighted the potential macroeconomic implications of stablecoin expansion. As stablecoin issuers continue to back their reserves with U.S. Treasuries, the demand shift could incentivize the Treasury Department to favor shorter-dated instruments in its issuance strategy.

With regulatory clarity finally emerging, BofA sees stablecoins and tokenized finance poised to play a larger role in reshaping capital markets infrastructure in the years ahead.