In a recent note, BlackRock (NYSE:BLK) emphasized that emerging U.S. laws are reinforcing stablecoins’ position within the global financial landscape, while also highlighting bitcoin’s potential as a long-term growth asset.
The asset management giant pointed to the recently enacted Genius Act, stating, “New U.S. legislation – notably this month’s Genius Act – is cementing the role of stablecoins as a payment method in the future of finance.”
BlackRock identifies stablecoins as one of the “five mega forces” influencing future investment returns.
The firm described stablecoins as “digital tokens pegged to a fiat currency and backed by reserve assets,” noting that they combine “the frictionless transfer of crypto with the perceived stability of fiat currency.”
Though stablecoins currently account for about 7% of the crypto market, BlackRock observed rapid growth in adoption, with the total value rising to roughly $250 billion since 2020.
According to BlackRock, the Genius Act establishes “a comprehensive payment stablecoin framework,” categorizing stablecoins as payment instruments rather than investments, and limiting issuance to regulated financial institutions.
“This regulation could reinforce dollar dominance by enabling a tokenized U.S. dollar-based ecosystem for international payments,” the firm added, particularly benefiting emerging markets.
The legislation also imposes strict requirements on the reserve assets stablecoin issuers can hold, primarily focusing on short-term U.S. Treasurys.
While this may increase demand for Treasury bills, BlackRock cautioned that “the impact on yields will likely be limited.”
Regarding bitcoin, BlackRock noted, “We still see bitcoin as a distinct return driver,” highlighting its 25% gain so far this year.
The firm concluded, “We see stablecoins as a new part of the future of finance – and new U.S. legislation is aiming to put the U.S. at the center of digital asset innovation.”
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