Does the "GENIUS Act" ignite a venture capital boom for stablecoins? Web3 and AI may welcome a golden cross.

The “U.S. National Innovation Guidance and Stablecoin Establishment Act” (GENIUS Act), passed in July 2025, is regarded as a significant milestone in the history of cryptocurrency regulation in the United States. This act provides a clear legal framework for stablecoins and may trigger a wave of new funding for stablecoins and Web3 applications. With the market capitalization reaching $272 billion, investors and entrepreneurs are closely following the arrival of this “new era of crypto finance.”

Bill Implementation: Stablecoins Enter Regulatory Fast Track

The core of the GENIUS Act is that payment stablecoins must be fully backed by high-quality, low-risk assets (such as cash, government bonds, or Federal Reserve reserves) and operate under the U.S. regulatory framework. This initiative not only provides stability to the market but also opens the door for competition among banks, fintech companies, and startups.

Currently, Tether (USDT) leads the market with a market capitalization of $165 billion, followed by Circle’s USDC ($67 billion) and Ethena ($11 billion). Analysts believe that as regulations become clearer, the market capitalization of stablecoins may welcome a new round of growth and become the foundational payment layer of the Web3 ecosystem.

Venture capital influx: slow banks, fast startups

(Source: DefiLlama)

David Mort, a general partner at Propel VC, pointed out that in the next five years, the scale of government bonds and deposits linked to stablecoins may grow exponentially.

Although large banks have advantages on the asset side, their speed of action is often not as agile as that of startups. Techstars advisor Artem Gordadze believes that the “GENIUS Act” provides stability for underlying payment systems, allowing entrepreneurs to focus on user experience and product innovation.

This means that from micropayments, cross-border transactions to on-chain lending and staking, stablecoin startups are expected to become the focus of venture capital funding in the coming quarters. In the second quarter of 2025, venture capital funding in the crypto space has surpassed 10 billion USD, and the fourth quarter may see a peak driven by both GENIUS and the upcoming CLARITY Act.

AI + Web3: The Next Explosion Point

In addition to stablecoins, the combination of artificial intelligence (AI) and Web3 is becoming a golden track in the eyes of investors. David Alexander II, a partner at Anagram, pointed out that the regulatory clarity provided by the GENIUS Act will encourage more entrepreneurs to explore AI-driven Web3 applications, such as smart wallets, risk management, user behavior analysis, and automated trading strategies.

Gordadze added that AI can simplify complex DeFi concepts, lowering the entry barrier for users and making Web3 applications as intuitive and easy to use as Web2. This not only helps accelerate mainstream adoption but also raises the technical threshold for founders, creating higher industry barriers.

Conclusion

The passage of the “GENIUS Act” has injected institutional confidence into the stablecoin market and opened up financing and innovation opportunities for startups. With the accelerated integration of AI and Web3, the coming years may witness the emergence of a new generation of applications that possess both financial stability and technological innovation. For investors, the fourth quarter of 2025 may become a key moment for positioning in the stablecoin and AI-Web3 sectors. For more real-time market analysis and industry insights, please follow the official Gate platform.