Crypto Lawyer Argues GENIUS Act Sets The Stage For DeFi Expansion

In a historic move for the digital asset industry, US President Donald Trump signed the GENIUS Act into law on Friday, marking the first major federal legislation governing cryptocurrency. The bill, which passed the Senate last month and was approved by the House of Representatives on Thursday with bipartisan support, introduces a comprehensive framework for regulated stablecoins backed by the US dollar.

The law is widely seen as a turning point for the crypto space, offering long-awaited legal clarity for stablecoin issuers and reinforcing the dollar’s role in the emerging digital economy. Industry leaders and lawmakers alike hailed the move as a major win for innovation and financial modernization. By encouraging the development of fully reserved, off-chain backed stablecoins, the GENIUS Act aims to provide a safe and transparent on-ramp for users and institutions alike.

Experts believe the legislation will drive further adoption of dollar-based digital payments while laying the groundwork for on-chain financial infrastructure to flourish. With the regulatory green light now in place, many expect accelerated growth in the US crypto sector, starting with stablecoins but expanding far beyond. This marks a pivotal moment in America’s positioning as a global leader in digital finance.

DeFi Stands To Benefit As GENIUS Act Unlocks On-Chain Growth

Jake Chervinsky, Chief Legal Officer at Variant Fund, a prominent crypto-focused venture capital firm, recently offered an insightful take on the implications of the GENIUS Act. While the legislation itself is not aimed at decentralized finance (DeFi), Chervinsky noted that its impact on DeFi could be substantial. “The GENIUS Act isn’t directly about DeFi — it regulates centralized stablecoins with full reserves off-chain,” he said. “But it is very good for DeFi — the more dollars and people there are onchain, the more need there will be for on-chain finance of all kinds.”

This perspective highlights a broader trend: regulation that encourages safer, more transparent stablecoins could lead to an influx of capital and users into the crypto ecosystem. With more regulated digital dollars flowing on-chain, the infrastructure supporting lending, trading, and yield generation in DeFi stands to grow significantly.

Chervinsky’s point about payments being “just a gateway” reinforces the idea that once users begin transacting on-chain with stablecoins, the leap into more advanced financial tools becomes much more natural. As Bitcoin hovers above $117,000 and Ethereum reclaims the $3,500 level, these legal developments are adding fuel to an already bullish environment. The coming weeks may prove decisive as both BTC and ETH test new levels, backed by increasing institutional interest and a favorable policy shift in Washington.

Crypto Market Surges To Multi-Year Resistance

The total crypto market cap excluding Bitcoin (TOTAL2) has broken out sharply, climbing to $1.45 trillion on strong volume. This marks an 11.58% gain in the past week and brings the market to levels not seen since early 2024. The move confirms renewed interest in altcoins, particularly Ethereum, which has led the charge with a 131% rally since April.

Price action on the weekly chart shows a clean break above the 50-week and 100-week moving averages ($1.13T and $987B), with bullish momentum accelerating. The 200-week moving average at $879 billion provided strong long-term support throughout the recent consolidation phase, setting the stage for this breakout.

This rally now targets the next major resistance zone around the $1.6–$1.7 trillion mark, where the market last peaked before a sharp correction. Volume has surged, supporting the strength of the breakout and suggesting institutional inflows may be returning.

If TOTAL2 can maintain this momentum, the altcoin market could see a broader rotation and rally. Still, investors should watch closely for potential profit-taking or retracements, especially near key resistance. A weekly close above $1.5 trillion would further solidify the bullish structure and open the door for new cycle highs across major altcoins.

Featured image from Dall-E, chart from TradingView