Crypto Goes Mainstream. The GENIUS Act Passes.

Crypto Goes Mainstream. The GENIUS Act Passes.
 
On July 17, 2025., S. 1582. The GENIUS Act passed Congress. This is a major step towards mainstreaming stablecoins in the United States. What does this mean for your crypto assets?
 
I will host a videoconference on Thursday, July 24, 2025, to discuss these developments, as we see how the signing of the law impacts the crypto market over the next week (should be positive). Email [email protected] with GENIUS Videocon in the subject line to join us live. FYI: Bitcoin was listed as our Investment of the Year on March 24, 2024. At that time the coin traded at $65,770. Bitcoin hit an all-time high of $123,212 on July 13, 2025.
 
Here are the things we will cover in this blog. Email [email protected] if you would like an updated Crypto Stock Report Card.
 
The GENIUS Act
Are Stablecoins Safe?
Terra’s Luna Stablecoin Collapse in May 2022
World Liberty Financial: USD1 StableCoin
Gemini’s Bitcoin Credit Card
XRP‘s Bank Application
Bitconnect, Bitcoin Trading Club and Other Ponzi Schemes and Fraud
Generating Income and Avoiding Capital Gains
Bitcoin and Ethereum Exchange-Traded Funds
 
And here is more information on each topic.
 
The GENIUS Act
The GENIUS Act legalizes stablecoins and provides some important standards that help to protect investors. The permitted issuers must maintain U.S. dollar and cash reserves on a one-to-one basis. They must also publicly disclose their redemption policy and publish the details of their reserves monthly. Click to read the text of the full bill.
 
Are Stablecoins Safe?
Having the coin directly tied to U.S. dollar and cash reserves on a one-to-one basis offers greater stability than stablecoins such as Terra Luna that was backed by an algorithm rather than assets. However, there is still risk, especially if the company offering the stablecoin gets into trouble. Stablecoins are not going to be regulated by the SEC. However, they are required to maintain anti-money laundering policies, and there will be annual reports to Congress and published by the Financial Stability Oversight Council.
 
It’s important to note that stablecoins are not backed by anything other than the company and their reserves. They are not yet able to be used to purchase anything. They are not FDIC-insured or SIPC-insured.
 
Another consideration is that stablecoins will charge fees. If they enter a period of instability, they can impose a redemption gate. Redemption gates limit investors from cashing in their coins, which, in theory, would prevent a run on the coin.
 
Finally, you can earn 4% interest in Certificates of Deposit or Treasury Bills. You won’t earn any interest on most stablecoins. And if you do, then they might be a lot riskier than you believe. For instance, investors piled into Luna hoping to receive interest of almost 20%, which is clearly not sustainable and had a terrible outcome.
 
Terra’s Luna Stablecoin Collapse in May 2022
When Terra’s Luna stablecoin collapsed in May 2022, it caused a ripple effect. Not only were investors who thought their money was safe, stunned to learn that it was all gone, but other companies were collapsing as well, including Three Arrows Capital, Voyager Digital and FTX. Bitcoin dropped from a high of $69,000 in November 2021 to a low of $15,000 in November 2022.
 
Do Kwon, the co-founder and former CEO of Terraform Labs, is currently in prison in the United States and is charged with “multiple schemes to deceive investors in order to fraudulently inflate the value of terraform cryptocurrencies.” The investor losses of the collapse are over $40 billion.
 
Terraform Labs filed for bankruptcy on January 21, 2024. The company listed assets and liabilities of $100-$500 million. The deadline for creditors (including investors) to submit claims was April 30, 2025. Since investor losses and creditors’ claims significantly exceed the assets available, investors are not expected to get much back.

World Liberty Financial: USD1 StableCoin
Token holders of the Trump-backed crypto project World Liberty Financial voted to go public the same day that the GENIUS Act was passed by Congress. World Liberty Financial offers the USD1 stablecoin on Binance and other trading platforms. (It is also conceivable that other big players, such as Elon Musk and Meta, could launch stablecoins.) $WLFI states that the company will break barriers for the unbanked, conceivably in rural, remote areas of Africa and Asia.
 
The wording on the USD1 offering reads, “Backed by dollars and U.S. treasuries that have the full faith and credit of the U.S. government.” If someone is not doing a careful reading of that, they might be thinking the stablecoin is as safe as (or safer than) fiat. On the Risks page, it states clearly (in bold and quite large) that USD1 is not legal tender and is not government backed.

Gemini’s Bitcoin Credit Card
Gemini just launched a MasterCard-backed credit card where cardholders can earn back 1-4% of their purchases in the cryptocurrency of their choice. With the popularity of cryptocurrencies and no annual fee, this offering by Gemini could be in high demand. Gemini also offers their own stablecoin, staking, and buys, sells and stores Bitcoin and 70 other cryptos. Coinbase offers a Bitcoin credit card, too. 
 
It should be noted that Gemini previously had a program called Gemini Earn that suspended redemptions on Nov. 16, 2022. Participants in that program expected to earn up to 7.4% APY in that program but instead had no access to their crypto until May 24, 2024. Click on the blue-highlighted words to learn more about the timeline of the suspension. FYI: The payback settlement did not include interest earned.

XRP‘s Bank Application
XRP has become the third largest cryptocurrency ($215.3 billion), behind Bitcoin ($2.4 trillion) and Ethereum ($432.3 billion). Ripple Labs, the company behind XRP, also has the Ripple USD stablecoin, which is backed by U.S. dollars and other cash equivalents. Again, as a reminder, many stablecoins don’t pay interest and are not FDIC-insured. It has been reported that Ripple applied for a Federal Bank Trust Charter with the Offices of the Controller of the Currency on July 2, 2025.

Bitconnect, Bitcoin Trading Club and Other Ponzi Schemes and Fraud
Sadly, there are still many ways to lose money in crypto. One of my clients reported a theft, where over $50,000 of her Bitcoin was stolen from her personal account. Bitconnect was a Ponzi scheme. The Trade Coin Club, promoted by multiple individuals in a multilevel marketing type scheme, was fraud. Another private client was convinced by fabricated statements (Bernie Madoff-style, only more sophisticated) that his “mentor” was making him money hand-over-fist in a gold-backed stablecoin. This convinced him to take out a high-interest credit card loan to the tune of over $40,000 to invest in the scam, which disappeared once he handed it over to the predator, never to return.
 
The new stablecoin law states that coins must have U.S. dollar and cash reserves on a one-to-one basis. As I stated above, this reduces, but does not eliminate, the risk. We have seen weakening in the dollar over the past few months and less liquidity in the treasury market, too. Some companies, like the fraudsters listed above, simply cook the books.
 
I’m repeating myself when I say many stablecoins don’t pay any interest and are not insured or backed by the federal government.

Generating Income and Avoiding Capital Gains
$1 million could be earning $40,000 annually with 4% interest. $250,000 would be earning $10,000 at 4% interest. Many people could use this extra income. So, it’s important to recognize that your stablecoin is not going to offer income. Stablecoins, like money market funds, typically stay flat and do not increase in their price. They are designed to stay steady (though they can decrease in value). The marketing pitch is that fiat is yesteryear and is a House of Cards waiting to fall. However, if the coin is backed by fiat…
 
Bitcoin and Ethereum Exchange-Traded Funds
There has been an important development in that investors can now invest in a Bitcoin or Ethereum exchange-traded fund within their individual retirement account. This means that they can capture gains when things shoot the moon without paying capital gains taxes on it. If the person has a Roth IRA, then they won’t pay income tax when they start taking their distributions. (It has been reported that Peter Thiel has over $5 billion in his Roth IRA.) I discussed this in greater detail in my videoconference of today on Wealth Hacks. Watch it back at youtube.com/nataliepace.

Bottom Line
Digital innovations are creating a new world. The excitement of Crypto Week and the GENIUS Act has pushed many cryptos at or near their all-time highs. At the same time, in a Debt World, it is very important to understand what guarantees are backing money that we are relying upon before we leap into the promise of a stablecoin, which might be backed by the fiat currency we fear.
 
Because Crypto Winters have occurred two years after the last two Bitcoin halving events, it's also important to have a plan for capturing gains at the high and to reduce our tax burden when we do. Learn more about this in the blogs and videoconferences below.
 
Are You Getting Killed in Capital Gains Taxes? Blog and Videoconference.
 
Gold, Silver and Crypto Soar
 
Get Safe and Hot in 1 Easy Plan
 
2024 Investment of the Year: Bitcoin
 

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Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is (2nd edition) are the most recent releases of these books. Follow her on Instagram. 
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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.