BlackRock said in a memo this week that the new U.S. legislation strengthens the role of stablecoins in global funding while bolstering the case for Bitcoin as a driver of long-term returns.

In a new report, the asset manager highlighted the impact of the recently passed Genius Act, stating: "The new U.S. legislation - particularly the Genius Act this month - solidifies the role of stablecoins as a means of payment in the future of funding."

BlackRock Inc (NYSE:BLK) considers stablecoins one of the "five major forces" shaping future returns.

"Stablecoins are digital tokens linked to a fiat currency and backed by reserve assets," explained BlackRock Inc. "They combine the seamless transfer of cryptocurrencies with the perceived stability of fiat currency."

While stablecoins currently account for only 7% of the cryptocurrency market, BlackRock Inc. noted that their adoption has rapidly grown to about $250 billion since 2020.

The company stated that the Genius Law creates "a comprehensive framework for stablecoins," defining stablecoins as payment instruments rather than investments and restricting their issuance to regulated financial institutions.

"This regulation could enhance the dominance of the dollar by enabling a dollar-based ecosystem for international payments," said BlackRock Inc., especially in emerging markets.

The law also establishes strict rules for the reserve assets that stablecoin issuers can hold, primarily short-term U.S. Treasury bills.

BlackRock said that this could stimulate more purchases of Treasury bills, but added: "The impact on yields is likely to be limited."

Regarding Bitcoin, BlackRock wrote: "We still see Bitcoin as a distinctive return driver," noting its 25% rise since the beginning of the year.

And she concluded: "We see stablecoins as a new part of the future of funding - and the new American legislation aims to place the United States at the center of digital asset innovation."

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