Foresight Ventures Applauds GENIUS Act as Game-Changer for U.S. Stablecoin Regulation and Startup Growth
Singapore, May 29, 2025 — Foresight Ventures has published an in-depth analysis of the newly enacted GENIUS Act, hailing it as a transformative step in U.S. stablecoin regulation with far-reaching implications for startups and the broader digital finance ecosystem.
The GENIUS Act—short for Guaranteed Electronic National Innovation for United States—introduces a streamlined regulatory model aimed at fostering innovation while strengthening consumer protections. One of its most notable features is a dual-licensing framework that allows stablecoin issuers to operate across all U.S. states with a single license recognized federally. This move significantly reduces regulatory overhead, removing one of the key obstacles startups and emerging fintechs face in entering the market.
Beyond licensing, the Act establishes stringent compliance requirements to protect users. All stablecoin reserves must be held in bankruptcy-remote trusts, ensuring users retain priority access to their funds in the event of issuer insolvency. This mechanism enhances trust and transparency in the stablecoin market—a critical factor in gaining widespread adoption.
Additionally, the GENIUS Act draws a clear line between stablecoins and traditional financial instruments. While it prohibits the payment of interest to stablecoin holders—avoiding classification as securities or deposits—it permits issuers to use interest earned from reserves for broader business development. These can include marketing initiatives, provided they don’t involve direct financial returns to users.
Another cornerstone of the legislation is its strict requirement that all stablecoins be backed 1:1 by U.S. dollars or high-liquidity assets. By tying digital currencies directly to the dollar and securing reserves with reputable custodians, the Act bolsters the U.S. dollar’s position as the world’s leading digital settlement currency. A prime example of this compliance model is Agora’s AUSD stablecoin, which is fully collateralized and managed through transparent, secure structures.
Zac Tsui, Investment Director at Foresight Ventures, praised the legislation’s clarity and vision:
“The GENIUS Act represents a significant advancement in stablecoin regulation, providing clarity and fostering innovation. Startups and fintech companies are now better positioned to develop compliant, secure, and user-centric financial solutions that can scale globally.”
Foresight Ventures emphasized its continued commitment to helping portfolio companies adapt to evolving regulatory standards. The firm sees the GENIUS Act not just as a regulatory milestone, but as a catalyst for a new era of fintech innovation grounded in trust, transparency, and growth.