The U.S. $GENIUS Act is giving banks, payment companies and blockchain firms their clearest federal rules yet for issuing payment stablecoins, a move that could accelerate the use of digital dollars in mainstream finance. The legislation comes as financial institutions expand blockchain-based payment projects to speed up cross-border transactions.
Even as stablecoins gain wider acceptance, few expect them to replace SWIFT, the global messaging network at the center of international banking. Instead, the industry is increasingly exploring how blockchain networks and traditional payment infrastructure can work together.
SWIFT Still Dominates Global Payments
SWIFT has connected banks for more than 50 years, providing the secure messaging network that underpins most international payments. More than 11,000 financial institutions in over 200 countries rely on it to exchange payment instructions every day. But SWIFT does not actually move money.
Banks still depend on correspondent banking relationships to settle transactions, a process that can stretch cross-border transfers to several business days and increase costs when multiple intermediaries are involved, especially in emerging markets.
SWIFT has responded by upgrading its own network. Its Global Payments Innovation (gpi) service improves payment tracking and speeds up settlement, while the organization is testing blockchain and tokenization projects designed to connect digital assets with existing payment infrastructure.
$GENIUS Act Brings Regulatory Clarity
The Guiding and Establishing National Innovation for U.S. Stablecoins ($GENIUS) Act, signed into law in July 2025, created the first nationwide framework for regulating payment stablecoins in the United States. The legislation gives banks, payment companies and digital asset firms clearer rules for issuing dollar-backed stablecoins, ending years of regulatory uncertainty.
Under the law, every regulated payment stablecoin must be backed one-for-one by high-quality liquid assets, including cash, cash equivalents or short-term U.S. Treasury securities. Issuers must also publish monthly reports on their reserves, supported by independent accounting attestations, to give users greater transparency into the assets backing their tokens.
Only approved institutions can issue regulated payment stablecoins. That includes bank subsidiaries, federally licensed non-bank companies and certain state-regulated issuers that meet the law’s requirements.
The legislation also strengthens consumer protections. Stablecoin issuers cannot suggest their tokens are backed by the U.S. government or insured by the Federal Deposit Insurance Corporation. They are also prohibited from paying interest directly to holders. At the same time, issuers must continue to comply with existing U.S. rules covering anti-money laundering, sanctions and counter-terrorism financing.
The new framework also clarifies how compliant payment stablecoins are treated under federal financial laws, giving banks and other institutions a clearer legal basis for developing stablecoin-based payment services.
Stablecoins Expand Cross-Border Payments
Stablecoins are increasingly handling payments that once moved through traditional banking networks. Their appeal comes from speed. While international wire transfers can take several business days, blockchain-based payments often settle within minutes and remain available outside normal banking hours.
That makes them particularly useful for businesses sending money into regions where correspondent banking is limited. Some companies are also using smart contracts to automate settlements while maintaining an on-chain record of each transaction.
Payment companies are already putting that technology to use. Visa, Mastercard and other financial firms have begun integrating stablecoins into their existing payment networks, while banks are expanding work on tokenized deposits and other tokenized assets. Those efforts suggest the industry is building on existing financial infrastructure rather than replacing it.
Even so, stablecoins remain a small part of global payment flows. Their use in commercial transactions continues to grow, particularly as regulators provide clearer rules for financial institutions.
Why SWIFT and Stablecoins Will Coexist
Despite all this progress, there are still several barriers that stablecoins must overcome to be able to facilitate international payments on the same level as traditional banking systems do. The $GENIUS Act in the United States created a set of regulations for stablecoins used in payment, but the regulation strategies are very different in many other nations.
However, technological aspects are not the only thing. Banks should make sure that the use of stablecoins within payments meets all the compliance, antifraud and risk management systems in place. At the same time, banks need to comply with all the requirements for money laundering, sanctions and other regulatory restrictions.
In spite of the emergence of blockchain, correspondent banking still enjoys certain advantages. There is already a long history of banking relationships and experience in dealing with liquidity issues and settlement, which help in executing large international transactions.
Blockchain systems are rapidly evolving, yet there are uncertainties as to their interoperability and ability to manage liquidity, especially in times of high transaction volume.
Rather than viewing the two systems as rivals, many financial institutions are exploring how they can complement one another. Stablecoins are increasingly used for faster settlement in selected cross-border payments, while SWIFT continues to underpin foreign exchange, large-value transfers and regulatory reporting.
Meanwhile, banks, payment providers and SWIFT are investing in tokenization and blockchain initiatives that aim to connect digital assets with the existing financial infrastructure instead of replacing it.
Hybrid Infrastructure Could Define Payments
The $GENIUS Act gives banks and payment companies a clearer legal framework for developing stablecoin-based payment services, removing much of the regulatory uncertainty that had slowed broader adoption. That clarity is expected to encourage more financial institutions to explore regulated stablecoins for payments, settlement and other financial services.
Even so, few in the industry expect blockchain networks to replace traditional banking infrastructure anytime soon. SWIFT and correspondent banking remain central to high-value international payments, foreign exchange and regulatory compliance, while stablecoins are gaining traction for faster, dollar-based and programmable transactions.
Instead of being a substitute for SWIFT, it appears that stablecoin systems will become another means of transferring payments along with the existing systems used in banks. From the perspective of the business community, the issue is not which technology to use, but how to integrate both systems.
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