GENIUS Act Blocks Big Tech, Banks From Stablecoin Dominance, Says Circle Exec

July 20, 2025 — Circle’s Chief Strategy Officer, Dante Disparte, said the recently passed GENIUS Act puts firm barriers in place to stop Big Tech and large banks from dominating the stablecoin market, promoting fair competition and regulatory oversight.

A “Libra Clause” To Prevent Tech Monopoly

Disparte, speaking on the Unchained podcast, highlighted a specific clause in the GENIUS Act — which he dubbed the “Libra clause” requiring non-banks to create standalone subsidiaries to issue stablecoins. These issuers must clear antitrust hurdles and gain approval from a Treasury committee with veto power.

Banks are also restricted. Any lender issuing a stablecoin must form a separate subsidiary and is barred from using leverage, taking risks, or engaging in lending with the stablecoin reserves.

This structure, Disparte said, is even stricter than the models proposed by major institutions like JPMorgan, ultimately benefiting US consumers and supporting the dollar’s stability.

GENIUS Act Gains Strong Bipartisan Backing

The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) passed last week with over 300 votes in the U.S. House of Representatives, including support from 102 Democrats.

The act introduces strict rules for stablecoin issuers:

• Projects with under $10 billion can operate under state money-transmitter laws.
• Projects exceeding that amount must register as national trust banks.
• The law bans interest-bearing stablecoins and unbacked tokens.
• Criminal penalties apply for those issuing unstable or fraudulent tokens.

Disparte emphasized that the GENIUS Act provides long-awaited legal clarity for crypto firms and opens the door for competitive innovation under a regulatory framework.

What Has Happened So Far

• July 2025 — GENIUS Act passes House with bipartisan support.
• July 2025 — Dante Disparte calls the law a turning point for regulatory clarity.
• July 2025 — Stablecoin interest yield banned, prompting DeFi shift.
• Earlier — Circle and others lobbied for fair treatment of non-bank issuers.

DeFi Set To Benefit From Yield Ban

The GENIUS Act’s ban on interest-bearing stablecoins could drive more users to decentralized finance. Without yield incentives from centralized stablecoins, platforms like those on Ethereum may become the go-to source for passive income.

Analysts from CoinFund and DeFiLlama suggest this could usher in a “DeFi summer,” especially among institutional investors who rely on yield to meet fiduciary responsibilities. With DeFi offering those opportunities, capital may rapidly shift toward decentralized platforms.