GM. This is Milk Road, the newsletter that’s as irresistible as a family order of chicken nuggets at the end of a night out.
Here’s what we got for you today:
- ✍️ Why the GENIUS Act = big deal
- ✍️ How to capitalize on stablecoin adoption
- 🌎 Is everything ok in the macro world?
- 🎙️ The Milk Road Show: Why All Roads Lead to Currency Debasement w/ David Brickell
- 🍪 $XRP gang, this is for you
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Prices as of 2:00 PM ET. Click here for our Fear & Greed Index.
WHY THE GENIUS ACT IS A BIGGER DEAL THAN YOU THINK 👀
Eurgh.
Simply writing this down makes me want to give myself a wedgie… but it’s true…
“Having / abiding by rules is important.”
And that’s what the GENIUS Act is hoping to bring to the US stablecoin space: a clear set of rules for everyone to play by.
It’s a bigger deal than you’d think. If passed, it will likely push hundreds of billions – dare we say trillions (over time) – of fresh capital into the crypto space.
So let’s take a quick look at the proposed rules, how far the act is from being passed, and the chances it will actually be made law.
1/ The rules proposed by the GENIUS Act go something like this…
- Issuers must be able to freeze tokens on lawful order
- Individuals will be allowed to self-custody stablecoins
- Stablecoin issuers won’t be able to offer native yield to holders
- Reserves & private keys must be held by a federally supervised custodian
- Stablecoins will be backed 1-to-1 with USD equivalents (no need for FDIC insurance)
- The Treasury can block non-compliant stablecoins from the US (e.g. Tether’s $USDT)
- Issuers must show monthly reserve audits from a US-registered public accounting firm
More here:
2/ How far is the GENIUS Act from being passed?
We’re almost there. Almost.
Yesterday, the bill passed through the Senate with overwhelming support:
Next up, we have the House of Representatives, then the final signing from the President.
Don’t know what the House of Representatives is and/or how hard it is to get this kind of bill passed through it?
Don’t worry – neither did we until 20 mins ago…
3/ What are the chances the GENIUS bill will actually be passed into law?
Here’s what you need to know:
Currently, the Republicans hold a majority in the House of Reps. (220 vs. the Democrats’ 212).
And given this is a Republican bill, there’s a 95% chance it will be passed on to be confirmed as law by President Trump at some point in the next 6 months or so, at least according to Polymarket. 👇
Neat, so we’re about to have clear regulatory guidelines for stablecoins in the US.
The next questions that come to mind are:
- What kind of companies will adopt stablecoins if/when this bill is passed?
- What makes stablecoins so special (they seem boring as hell)?
- How the hell do I capitalize on the growth of a stable asset?
Keep scrolling to get your answers…
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WHAT’S SO GREAT ABOUT STABLES (AND HOW DO I CAPITALIZE ON THEM)? 💰
Not hyped about stablecoins?
I get it. They lack sex appeal.
But let’s see if I can change your mind by hitting a couple of key points here…
1/ What kind of companies will adopt stablecoins if/when this bill is passed?
Big picture, stablecoins don’t have a clear ‘type’ of business they’re best suited for.
(The same way credit/debit payments don’t have a type.)
If you transact money, there’s a good chance you’re eventually going to want to adopt stablecoin payments, because they’re faster & cheaper than the current options.
Hell, right this second, 18% of Fortune 500 companies are busy adopting crypto – listing stablecoin payments/settlements and cross border transfers as their key motivators:
2/ What makes stablecoins so special (they seem boring as hell)?
True. They are boring.
But MAN are they an improvement on what’s currently on offer.
Stablecoin transactions are 50%+ cheaper for merchants vs. credit cards, and result in more than a 3x increase in revenue for payment processors (that’s a win/win). 👇
Btw, the dude who tweeted this out (Sam Broner) joined us on The Milk Road Show last week to lay out the $260B opportunity he’s seeing in the stablecoin space.
3/ How the hell do I capitalize on the growth of a stable asset?
Fair question.
Assets that will likely benefit (over time) from the GENIUS Act passing include:
Circle ($CRCL): issuer of $USDC and the only fully compliant & publicly traded stablecoin company in the US… for now.
Coinbase ($COIN): receives – get this – 54% of Circle’s revenue, thanks to their current distribution deal.
Fintechs (think PayPal, Block, Stripe): The GENIUS Act will allow non-bank fintechs to innovate in stablecoin payments (remember: it’s estimated stables could 3x payment processor revenues).
Well, well, well…
Would you look at that?
Look who’s getting excited about stablecoins all of a sudden.
IS EVERYTHING OK IN THE MACRO WORLD? 🤨
Wondering how the current Middle East conflict will affect markets?
Honestly, that’s above my pay grade. Good news is – we’ve got a guy for that!
His name is Tomas, he writes a twice weekly publication called Milk Road Macro, and people are LOVING what he’s putting out:
Click the link below to learn what the current Middle East conflict means for financial markets, risk assets (like Bitcoin), and oil prices – all in plain, easy-to-digest language!
👉 Read the latest Milk Road Macro article
BITE-SIZED COOKIES FOR THE ROAD 🍪
Confused about crypto taxes? Book a free consultation call with TaxQuotes to keep more of what you earned.*
No rate cut! The FOMC leaves rates unchanged for the 4th straight meeting.
$XRP gang, this is for you. The first spot $XRP ETF will be launched in Canada today.
The Iran-Israel war is spilling into crypto. It’s reported that Israeli-linked hackers have breached an Iranian crypto exchange.
7% crypto allocation. That’s the latest recommendation from Spain’s second-largest bank to its clients. If you ask us, that’s a bit too mild.
We’re hosting a meetup at Permissionless! If you’re hanging around New York next week, come grab a beer with the Milk Road team.
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