Stablecoin Growth Restricted: Economists Warn of Market Limitations

New federal regulations aimed at stabilizing the payment stablecoin market, known as the GENIUS Act, may be hindering their growth potential. Berenberg economist Atakan Bakiskan warns that despite new rules providing regulatory clarity for these digital assets, stablecoins face structural limitations preventing substantial expansion. 2023 saw a surge in interest-bearing options, including tokenized deposits and money-market funds, which operate outside the GENIUS Act’s restrictions and offer alternative solutions to traditional bank accounts, according to Bakiskan.