GENIUS Act Spurs Shift to Payment Utility in Stablecoins

The GENIUS Act is poised to change the stablecoin landscape by steering issuers away from yield-based models and toward payment-focused use cases, according to Sygnum chief investment officer Fabian Dori.

“The GENIUS Act was recently amended to create a clear separation between interest/yield-bearing stablecoins and those used for payments,” Dori told Cointelegraph. He said this brings the US framework closer to the EU’s Markets in Crypto-Assets (MiCA) regulation, laying the foundation for “global consensus.”

Dori added that the real impact of the GENIUS Act goes beyond regulation. “By providing long-sought-after clarity, it gives confidence to organizations and issuers to develop original, innovative ‘killer apps’ that don’t just serve their customers’ current needs, but create demand for entirely new services, including payments,” he said.

That confidence appears to be translating into growing demand. Giants like Mastercard and PayPal have laid the groundwork for compliant stablecoin use, and companies such as Amazon and Walmart are exploring applications in payroll and cross-border settlements.

He noted that tokenized money market funds are the better fit for investors chasing returns. These funds, which offer a stable value and daily liquidity, are currently yielding 4–5% in US Treasury-backed products, without blurring the lines between investment and utility.

Related: Nigeria opens doors to stablecoin firms under regulatory oversight

Stablecoin issuers pivot to utility

With interest-bearing stablecoins now restricted, issuers are expected to lean into features like real-time settlement, low transaction costs and programmable capabilities that integrate into payment and trading systems, Dori said.

“Utility beats yield now,” Jason Lau, chief innovation officer at OKX, said. He argued that in an increasingly competitive space, issuers will continue to pursue innovative models to drive adoption and new use cases.

Lau also said that the benefits of stablecoin settlement and cross-border efficiency are poised to drive adoption in real-world commerce, with interest from payment giants like PayPal and Stripe signaling just the beginning.

Meanwhile, Aishwary Gupta, global head of payment and fintech at Polygon Labs, said the shift toward utility was already “underway” even before the passage of GENIUS Act.

Gupta said Polygon has observed significant growth in payment-focused stablecoin usage, with their micropayment volume rising 67% from February to June, reaching $110 million. He said:

“Regulatory compliance helps, but more important is how it meets real market demand. Payment use cases offer immediate utility and solve actual problems for users, like in cross-border transfers and everyday commerce.”

Related: GENIUS’ ban on stablecoin yield will drive demand for Ethereum DeFi — Analysts

Retail adoption remains key

Despite the shift, retail adoption remains a critical factor. “It’s not fintechs that move the needle, but consumer adoption,” Dori said, emphasizing that user-friendly platforms will determine the pace of stablecoin integration.

Gupta also highlighted the importance of retail adoption, noting that Polygon is prioritizing stablecoin infrastructure that supports real-world applications, from enabling sub-cent transaction fees for micropayments to scaling performance for enterprise-grade deployments capable of handling over 100,000 transactions per second.

The company is also seeing growing momentum in retail and B2B payment integrations. It is currently working with a firm operating 185 million phones across Africa to facilitate cross-border B2B payments.

“We have enterprises with 7-8 million wallets ready to go live,” he said. “Small payment volumes ($100-$1,000) on Polygon grew 190% to over $563M from February to June. We expect this trend to accelerate in the coming months.”

Meanwhile, Lau said DeFi protocols might be one of the biggest beneficiaries of this clarity, as stablecoins already anchor a tremendous amount of activity onchain. “While there will be some focus on synthetic yields and governance tokens, the opportunity to offer compelling and unique use cases will capture stablecoin demand,” he said.