The Genius Act: A Step in the Right Direction for US Crypto, but Not Enough
The recent introduction of the Genius Act has sparked a heated debate in the global crypto community, with many wondering if it will be enough to dethrone the United Arab Emirates (UAE) as the leading crypto hub. While the legislation is a positive move, it falls short of addressing the broader digital assets landscape, leaving the UAE’s dominance unchallenged.
At the heart of the Genius Act is the regulation of stablecoins, ensuring they are backed by their respective assets and comply with anti-money laundering (AML) standards. However, this legislation only deals with stablecoins and does not address the wider digital assets market. Moreover, its implementation is slated for mid-2026, giving regulatory authorities time to create the necessary rules. This delay and limited scope mean the US will likely remain behind the UAE in the crypto race.
UAE’s Head Start in Crypto Regulation
The UAE began refining its crypto regulation in 2018 with the establishment of the Financial Services Regulatory Authority (FSRA) in Abu Dhabi, followed by the creation of the Virtual Assets Regulatory Authority (VARA) in Dubai in 2022. This early mover advantage has allowed the UAE to develop a sophisticated regulatory infrastructure, offering tailored licensing, trading, custody supervision, and fraud prevention for crypto companies. In contrast, the US is playing catch-up, with the Genius Act being its first major foray into crypto regulation, albeit seven years after the UAE’s initial efforts.
The UAE’s regulatory environment, combined with its tax-friendly regime, has made it an attractive destination for crypto investors and companies. The absence of income and capital gains tax on crypto transactions is a significant draw, especially when compared to high-tax jurisdictions like the EU and US. This has led to the UAE becoming a hub for Defi innovation, with over 516 crypto startups and more than 1,000 blockchain-tech startups calling the country home.
A Magnet for Investment and Innovation
The UAE’s crypto-friendly ecosystem has also attracted major players like OKX, the second-largest cryptocurrency exchange in the world, which is introducing regulated crypto derivatives for retail investors in the region. This move reinforces the UAE’s position as a superior crypto market, with its mature infrastructure, clear regulatory environment, and consistent innovation making it an ideal launchpad for crypto companies. The country’s record foreign direct investment (FDI) of $167.6 billion in 2024 further solidifies its status as a global crypto hub.
Given the significant gap between the US and UAE in terms of crypto regulation, infrastructure, and investment, it is unlikely that the Genius Act will be enough to propel the US to the top of the crypto leaderboard. While the legislation is a step in the right direction, it is too little, too late, and the US will need to do more to challenge the UAE’s dominance in the crypto space.
For more information on the Genius Act and its implications for the US crypto market, visit https://crypto.news/the-genius-act-is-too-little-too-late-for-us-crypto/.
Fiorenzo Manganiello is a co-founder and managing partner of the investment company Lian Group. At the Lian Group, he has built and financed many successful technology companies in cryptocurrency, blockchain, digital infrastructure, and healthcare. Outside of his work at the Lian Group, Manganiello is an art collector and professor of blockchain technologies at the Geneva Business School.
