GENIUS Act Could Unlock $1.2T in U.S. Credit by 2030

The banks lobbying against the GENIUS Act just got hit with a detailed rebuttal backed by data. Galaxy Digital’s Head of Research, Alex Thorn, has published what he calls the most comprehensive model of stablecoins’ impact on Treasury markets and bank deposits. The conclusions directly contradict the banking industry’s core arguments against stablecoin regulation. Crypto regulation news today has a new data point that policymakers cannot ignore.

What Galaxy’s Model Actually Found

The numbers are striking. Under the GENIUS Act framework. Galaxy projects that 60% to 70% of stablecoin growth will originate offshore. That means the majority of new capital flowing into GENIUS-compliant stablecoins comes from outside the U.S. banking system entirely. It is not from domestic depositors switching banks for better yields.

Thorn stated the conclusion plainly. “Imported deposits from offshore will exceed domestic deposit migration roughly 2:1.” Consequently, that single finding dismantles the banking industry’s primary argument that stablecoins will drain domestic deposits and destabilize U.S. banks.

Beyond the sourcing question, each newly minted GENIUS stablecoin is projected to generate approximately $0.32 in net U.S. credit expansion. When multiplied across the projected stablecoin market, the aggregate impact becomes significant. Galaxy’s base case projects $400 billion in stablecoin-related credit expansion by 2030. Meanwhile, the bull case reaches $1.2 trillion.

Treasury Markets and Government Savings

The GENIUS Act requires stablecoin issuers to hold reserves in high-quality, short-duration assets. This means U.S. Treasury bills in practice. Tether already holds over $120 billion in T-bills. This makes it one of the largest holders of front-end government debt on earth. GENIUS formalizes and onshores that pattern at scale.

The result is a structural bid embedded in the front end of the Treasury curve. Galaxy’s model projects this compresses short-term Treasury yields by 3 to 5 basis points. It is reducing U.S. government borrowing costs by up to $3 billion annually. That is not a marginal rounding error. That is real fiscal relief funded by global demand for digital dollars.

What This Means for Investors and Developers

For stablecoin regulation update watchers and crypto investors, Galaxy’s analysis reframes the entire GENIUS Act debate. Essentially, this is not a cryptocurrency law in the traditional sense. Instead, it is legislation about the evolving funding structure of the dollar economy. Under GENIUS, stablecoins become programmable U.S. financial infrastructure. As a result, the law extends dollar access into markets that legacy banking has never efficiently served.

For developers building stablecoin infrastructure, payment rails, and DeFi products, the GENIUS Act passing creates the largest addressable market expansion in the sector’s history. Specifically, regulated digital dollars with clear reserve requirements and legal standing unlock institutional integration at a scale that unregulated stablecoins never could. Admittedly, banks are not wrong that stablecoins will reshape their margin structure. However, Galaxy’s data suggests they are wrong about the existential threat. The adjustment is real. The disruption is not.

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