Introduction: from regulatory vacuum to functional integration
For years, stablecoins have occupied a legally unstable position within the international financial system. Their economic use as a means of payment contrasted with their tax treatment as property, particularly under the criteria of the Internal Revenue Service (IRS), which equated all cryptocurrencies with property.
This approach generated structural friction incompatible with their use as operational money: each transaction implied, in legal terms, the realization of a capital gain or loss.
The approval of the so-called GENIUS Act in 2026 introduces a qualitative change: it does not merely adjust the tax regime, but redefines the functional legal nature of certain stablecoins within the U.S. monetary system.
We are facing a process of regulatory integration that goes beyond taxation and directly affects the architecture of global monetary power.
I. Functional reclassification: from digital asset to means of payment
The central element of the law is the introduction of a differentiated category: “qualified stablecoins”.
This concept entails a substantial alteration in legal treatment:
- The application of capital gains taxation in everyday transactions is reduced or eliminated
- Their function as a means of payment is implicitly recognized
- Their use in business and commercial contexts is facilitated
From a legal perspective, this is not an exemption, but a functional reclassification. The legislator does not modify the ontological nature of the asset, but rather its regulatory treatment based on its economic use.
This approach aligns with a well-known principle in financial law: the prevalence of economic function over legal form.
II. The creation of a regulated perimeter: “qualified stablecoins”
The GENIUS Act does not merely facilitate the use of stablecoins; it establishes a closed legal standard that defines which instruments can benefit from this regime.
In practice, this implies:
- 1:1 reserve requirements backed by liquid assets (primarily U.S. Treasury securities)
- Supervision by regulated entities
- Transparency and audit requirements
- Integration within the formal financial system
Excluded from this perimeter are:
- Algorithmic stablecoins
- Purely decentralized models without an identifiable issuer
- Structures without institutional supervision
This regulatory design produces a direct consequence: the bifurcation of the ecosystem between assets integrated into the legal system and those remaining at the regulatory periphery.
From an economic law perspective, this constitutes a classic technique of regulation by selective inclusion, where access to legal benefits determines adoption of the standard.
III. Stablecoins and monetary sovereignty: extraterritorial extension of the dollar
The most relevant dimension of the GENIUS Act is not domestic, but geoeconomic.
Dollar-linked stablecoins — such as USD Coin or Tether — were already operating as instruments of digital dollarization. However, the new regulation strengthens their role as formal infrastructure of the U.S. monetary system.
This phenomenon has several legal implications:
- Consolidation of the dollar as a global digital unit of account
- Increased structural demand for U.S. public debt
- Extraterritorial projection of U.S. regulatory frameworks
From an international economic law perspective, this can be interpreted as a form of indirect regulatory jurisdiction, where control is exercised not over territory, but over the monetary infrastructure used globally.
IV. From tax simplification to structural control
The elimination of tax friction in the use of stablecoins could be interpreted as liberalization. However, from a broader legal perspective, it responds to a different logic: optimization of control.
This process can be understood in three layers:
- Incentivizing adoption through the reduction of tax burdens
- Channeling flows through regulated issuers
- Ensuring traceability and integration within the supervised financial system
The result is the creation of an infrastructure where:
- Actors are identifiable
- Flows are monitorable
- Intervention points are clearly defined
This transforms stablecoins into not only a monetary instrument, but also a regulatory one.
V. The potential for future fiscal extraction
One of the most relevant aspects from a legal standpoint is that the GENIUS Act does not, for now, introduce direct taxation mechanisms on flows derived from the use of stablecoins.
However, it does establish the necessary conditions for their future implementation.
Once:
- Adoption is widespread
- Issuers are regulated
- Flows are traceable
The introduction of measures such as:
- Withholding mechanisms at issuance or redemption
- Fees on certain types of transactions
- Automated tax obligations embedded in the infrastructure
becomes technically feasible and legally defensible.
This would not be a tax on blockchain itself, but on the infrastructure of the digital dollar.
VI. Implications for the “Internet jurisdiction” and the role of BACS
From the conceptual perspective of the Internet jurisdiction, the GENIUS Act represents a clear movement: the progressive capture of an originally decentralized infrastructure by the State.
The underlying conflict is not technological, but legal:
- Code vs. regulation
- Decentralization vs. supervision
- Protocol neutrality vs. state integration
In this context, a critical space emerges where entities such as BACS can play a relevant role:
- Defining legal standards for digital assets
- Developing dispute resolution mechanisms in hybrid environments
- Designing compliance structures compatible with decentralized systems
- Analyzing the legal enforceability of rights within blockchain infrastructures
The evolution of stablecoins into legally integrated instruments reinforces the need for a specialized legal layer capable of bridging both worlds.
Conclusion: the construction of a legal infrastructure for digital money
The GENIUS Act should not be interpreted as an isolated tax reform, but as part of a broader strategy: the transformation of stablecoins into the legal infrastructure of the dollar in the digital economy.
The process follows a clear logic:
- First, incentivize adoption
- Then, formalize flows
- Finally, enable control and value extraction
In this new scenario, digital money ceases to be a peripheral phenomenon and becomes a central element of the global economic order, integrated under regulatory frameworks designed to preserve — and extend — U.S. monetary sovereignty.
The question is no longer whether stablecoins will be regulated.
The question is who defines the rules under which they operate.
And, ultimately, who exercises control over the infrastructure of digital money.
