Blockchain Wars Ahead

Blockchain Wars Ahead

#Onchain #politics #spark #blockchain #battles #Opinion #OrxCash

The US Senate’s passing of the GENIUS Act marks a significant milestone for the cryptocurrency industry, as it signals a green light for blockchain business in the United States. The move has been welcomed by the crypto industry, with US startups now having a clearer understanding of how to approach web3. The GENIUS Act is expected to turbocharge the industry, particularly for stablecoin issuers, with Circle’s IPO being a prime example.

Stablecoin Boom Goes Political

The stablecoin market is experiencing a surge in growth, but this boom is also becoming increasingly politicized. Rising regionalism is turning Bitcoin (BTC) and other cryptocurrencies into a battleground for compliance, control, and competing national currencies. The era of "nation chains" has arrived, with countries like China and Russia racing to build domestic Central Bank Digital Currencies (CBDCs) while US rules shut out foreign issuers and favor corporate giants.

Rise of Nation Chains

The GENIUS Act has made life significantly harder for overseas stablecoin issuers and users. Foreign stablecoin issuers must comply with US regulations or face a potential ban if deemed non-compliant by the Treasury Department. This has led to a rise in nation chains, where countries are building their own domestic CBDCs, which will run on a Ethereum (ETH)-like blockchain but will be permissioned and localized. While Bitcoin (BTC) will remain global, many digital currency chains will be limited to national borders.

Searching for a Global Unit of Account

Despite the US dollar’s dominance in global trade, its influence is poised to diminish as national and regional governments champion their own stablecoins, pegged to currencies like the EUR, YEN, and CNY. The GENIUS Act has also led to a shakeup in the stablecoin market, with Binance’s BUSD being reined in by US regulators and algorithmic stablecoins being outright banned. This will likely lead to a reduction in the number of dollar-pegged stablecoins available, with only a few approved companies dominating the market.

The Silver Lining

While the increased politicization of the crypto industry may seem gloomy, there is a silver lining. Bitcoin (BTC) is no longer under threat of being banned, and blockchain innovation is thriving. The emergence of competing CBDCs and regionalized stablecoins may add complexity to the onchain landscape, but it also presents opportunities for growth and adoption. As the industry continues to evolve, it’s likely that we’ll see a shift towards more decentralized and community-driven stablecoin solutions.

In the broader market context, the GENIUS Act and the rise of nation chains may have significant implications for retail investors. As the crypto industry becomes increasingly fragmented, investors may need to adapt to a more complex and regulated environment. However, this could also lead to new opportunities for growth and innovation, particularly in the decentralized finance (DeFi) space. As the industry continues to navigate these changes, it’s essential for investors to stay informed and up-to-date on the latest developments. With the stablecoin market expected to continue growing, it’s likely that we’ll see a surge in demand for Bitcoin (BTC) and other cryptocurrencies, particularly as more institutional investors enter the market. Key statistics to watch include:

  • Over 40% of DEX stablecoin volume expected to be replaced by "official" digital currencies or blocked in certain jurisdictions by the end of 2025
  • The GENIUS Act’s ban on algorithmic stablecoins and increased oversight of foreign issuers
  • The rise of nation chains and domestic CBDCs, and their potential impact on the global crypto market

Opinion,China,European Union,Russia,Stablecoin,United States
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