Key Takeaways
- The GENIUS Act marks a major milestone in US digital asset regulation, particularly for stablecoins.
- Jurisdictions like Bermuda, the British Virgin Islands (BVI) and the Cayman Islands are well-placed to meet increasing demand for regulated digital products.
US introduces landmark digital assets legislation
In July 2025, the United States took a major step toward regulating digital assets with the passing of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, better known as the GENIUS Act. Part of a broader policy push dubbed ‘crypto week’ by commentators, the GENIUS Act aims to bring stability and structure to the growing stablecoin market.
This legislation marks a new development for the industry, creating a clearer path forward for regulated digital assets in the US and sparking renewed interest among global market participants.
Investment hubs will remain key to global growth
You would be forgiven for speculating that a positive shift in the US approach to digital assets regulation could reduce the relevance of international investment hubs to the digital asset industry. However, we believe the picture to be more nuanced and optimistic. Jurisdictions such as the BVI, Bermuda and Cayman Islands, which have spent years developing their own specialist digital assets ecosystems, are on-track to play an even greater role as global demand for regulated digital products accelerates.
Institutional players are entering the market with increasing sophistication. Their priorities include those common to all new markets and consist of legal and regulatory stability, clarity and credibility. The GENIUS Act should help provide a new level regulatory foundation in the US, unlocking new levels of market participation and driving demand for innovative products.
In turn, this could lead to greater need for efficient cross-border structuring and administration, particularly for firms looking to scale beyond the US.
Structuring for scale and regulatory clarity
As US legislation around digital assets becomes more defined, many firms will still look beyond the US when structuring for global growth. In our experience, clients frequently set up entities in international investment hubs for several reasons, including to serve their ‘rest of world’ customer base, maintaining a clear separation between US and non-US operations and to allow for corporate structuring in a stable, neutral, regulatory environment.
This approach reflects growing caution around the potential extraterritorial reach of US and other global regulators and supports international scalability while allowing firms to tailor compliance to each jurisdiction.
While greater clarity in the US will hopefully increase stablecoin marketability and investor confidence, it’s important to note that, particularly in relation to stablecoins, each jurisdiction has the potential to maintain its own marketing rules. Understanding and traversing these differences will remain essential for digital asset businesses looking to market stablecoins internationally.
Regulatory maturity in international investment hubs
Part of the competitive advantage for international investment hubs lies in their established ecosystems and legal frameworks, which continue to offer legal and regulatory certainty and stability not yet fully replicated elsewhere. These jurisdictions have, for the better part of the past decade, supported digital asset businesses, attracted expert service providers, adopted principle-based legislation and built industry and regulatory know-how over time.
In terms of timing, Bermuda’s Digital Asset Business Act 2018 came into force then in May 2020, the Cayman Islands' Virtual Asset (Service Providers) Act similarly came into force in October 2020 and BVI’s Virtual Assets Service Providers Act, 2022 came into force in February 2023. Each of these legislative developments followed on from industry consultation and the growth of industry demand for stability, clarity and jurisdictional credibility.
This kind of principle-based regulation is often better suited to innovative and fast-developing business models. For example, Bermuda’s legislative framework permits the issuance of yield-bearing stablecoins, in a regulated environment, whereas the GENIUS Act in the US expressly prohibits yield payments, potentially limiting certain types of product innovation. For many firms, this will continue to make international investment hubs flexible and commercially viable jurisdictions, often working in tandem with US operations.
A stable foundation amid uncertainty
Although the GENIUS Act signals welcome progress in the US, there will continue to be uncertainty around its implementation over time, particularly considering potential shifts in administrative priorities.
International investment hubs have already proven themselves in this industry, offering a strong foundation for firms looking to build, launch and manage complex cross-border digital asset products.
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