Korea Institute of Finance: ”US Stablecoin Act to be enacted, expanding dollar's influence”

News 1 reported that an analysis has emerged stating that the implementation of the proposed GENIUS Act, a proposed stablecoin regulation in the United States, will increase the influence of the dollar.
Lee Byung-kwan, director of the Korea Institute of Finance, made this announcement on the 20th in a report titled, “The Movement and Implications of the Full-Scale Issuance of Stablecoins in the United States.”
Prior to this, US President Donald Trump signed the Genius Act, which had passed the House of Representatives, on the 18th (local time). The Genius Act provides for the legal status, regulatory jurisdiction, and reserves of stablecoins.
It includes regulations on asset management and information disclosure.
A stablecoin is defined as a digital asset issued at a pre-determined fixed price.
Stablecoins for payment settlement can be issued by banks, credit unions and non-banks.
In order to be able to issue stablecoins, these issuers must register with federal regulators. They must also prepare and publicly disclose procedures for redeeming stablecoins and submit monthly schedules for the composition of their outstanding balance and reserve assets.
In addition, there is an obligation to report periodically on the status of stablecoins issued and circulated in the United States. In principle, the reserve assets of stablecoins issued and circulated in the United States must be entirely denominated in U.S. dollars.
Therefore, the influence of the US dollar is likely to grow. Lee Byung-kwan, the director of the banking division, said, "We expect the circulation of stable coins that use the US dollar as a reserve asset to increase rapidly."
He continued, "We hope that this will reduce legal risks and improve credibility related to stablecoins, and that we will see not only increased use by individuals, but also full-scale participation by institutional investors and large banks."
Not only will the scope of influence in the existing stablecoin market change, but decentralized finance using blockchain technology will also develop, predicted Lee Byung-kwan.
Lee Byung-kwan, the director of the bank, said, "Stablecoins are a means of transaction from decentralized finance and will play an intermediary role with the existing financial system. As the circulation of stablecoins expands,
"It is expected that the demand and supply of financial services developed on the blockchain will also expand."