One of the pillars of the GENIUS Act (U.S.) is the requirement that payment stablecoins always be backed at a minimum 1:1 ratio by high-quality assets such as cash and T-Bills.
📌 Why it matters
- Predictability: ensures that each token can be redeemed at equivalent value, reducing the risk of a de-peg.
- Immediate liquidity: high-quality liquid assets allow a fast response in stress scenarios.
- Transparency: frequent reporting and asset segregation increase user confidence.
📌 Market effects
- Impact on Treasuries: growing demand for T-Bills increases the interconnection between stablecoins and U.S. public debt.
- International transmission: interest-rate or liquidity shocks in the U.S. can be directly reflected in the value of, and confidence in, stablecoins.
- Concentration risk: reserves overly concentrated in a few assets can amplify volatility in periods of stress.
📌 In Brazil Law No. 14,478/2022 (the Crypto-Assets Legal Framework) gave the Central Bank authority to regulate virtual assets used as payment instruments, which naturally includes stablecoins. Given the existing framework for electronic money (Law No. 12,865/2013 and BCB Resolution No. 96/2021, which require full backing in low-risk liquid assets), it is reasonable to expect future regulation to move in the same direction: 1:1 backing, immediate liquidity, asset segregation and auditable reporting. In short: requiring 1:1 reserves and frequent reporting is not a technical detail; it is what gives stablecoins the minimum trust to operate as digital money at scale.
➡️ In the next post, we will look at how stablecoins affect monetary policy, especially in emerging economies with weak currencies and high inflation, where the shift to the "digital dollar" is gaining momentum.
Authors: Roberto Panucci, Tiago Severo Gomes and Marcelo De Callis
