US Stablecoin USDW Launched under Advancing American Regulatory Framework
Federal Regulatory Framework for Stablecoins Boosts Wall Street Adoption
In a significant move for the digital assets sector, the GENIUS Act, passed in July 2025 and signed into law shortly after, establishes the first comprehensive federal regulatory framework for payment stablecoins in the United States. This framework, designed to provide clear rules for stablecoin issuance, consumer protection, anti-money laundering (AML), and financial stability, is expected to significantly encourage adoption and integration of stablecoins by traditional financial institutions, including Wall Street firms like WisdomTree, JPMorgan, Citigroup, and Goldman Sachs.
Key impacts of the GENIUS Act relevant to these firms include:
- Clear Licensing and Regulatory Structure: The Act creates a dual federal-state licensing regime allowing federally approved or state-regulated entities to issue stablecoins under uniform standards. This clarity makes it feasible for large financial institutions to develop and issue stablecoins with regulatory certainty.
- Market Confidence and Institutional Participation: By addressing regulatory uncertainties around stablecoins, the Act reduces legal risks, encouraging established Wall Street entities to explore stablecoin products and blockchain integration. For example, WisdomTree has already launched its own dollar-pegged stablecoin, USDW, which will soon be rebranded as USDW. Major firms like JPMorgan, Citigroup, and Goldman Sachs are actively exploring stablecoin use cases post-GENIUS.
- New Payment and Settlement Opportunities: Stablecoins regulated under the GENIUS Act can be used as a means of payment or settlement with stable value guarantees. This aligns with interests of financial firms aiming to streamline payment systems, enable faster and cheaper cross-border transactions, and integrate blockchain technology into traditional finance infrastructures.
- Enhanced Compliance and Risk Management: By establishing AML compliance requirements and supervisory oversight, the Act helps Wall Street firms manage regulatory risks associated with digital assets, making it safer to incorporate stablecoins in their offerings.
In addition to these benefits, stablecoins could potentially disrupt the retail payment monopoly held by Visa and Mastercard. Merchants have been burdened by high interchange fees for years, and stablecoins could offer a more competitive and cost-effective alternative.
Moreover, a collaboration between Goldman Sachs and Bank of New York Mellon has resulted in a new platform that allows institutional investors to purchase tokenized money market funds, with ownership securely recorded on Goldman's blockchain infrastructure. Citigroup's CEO, Jane Fraser, has publicly acknowledged the bank's efforts to issue its own stablecoin.
The Department of Justice's (DOJ) antitrust case against Visa is gaining traction, which could further accelerate the adoption of stablecoins as a viable alternative in the payment industry.
WisdomTree is also enhancing interoperability across multiple public blockchains, including Ethereum, Base, and Avalanche, as part of its efforts to support the use of USDW. USDW operates exclusively within WisdomTree Prime, a regulated digital asset platform overseen by the New York Department of Financial Services (NYDFS).
In conclusion, the GENIUS Act acts as a catalyst for greater stablecoin adoption and issuance by major Wall Street firms. This legislative development has already stimulated initiatives such as WisdomTree’s USDW stablecoin launch and ongoing explorations by JPMorgan, Citigroup, and Goldman Sachs into leveraging stablecoins within their financial products and services.
- The passing of the GENIUS Act in 2025 has prompted significant interest among Wall Street firms like WisdomTree, JPMorgan, Citigroup, and Goldman Sachs, fostering a new wave of business in finance and technology through the development and integration of stablecoins.
- The clear regulatory structure established by the GENIUS Act enables financial institutions to create stablecoins with regulatory certainty, opening up opportunities for new payment and settlement systems, enhanced compliance, and potentially disrupting the retail payment market held by Visa and Mastercard.
