Galaxy Digital Model Shows $GENIUS Act Could Spur $1.2 Trillion U.S. Credit Expansion, Mostly From Offshore

Context The $GENIUS Act requires stablecoin issuers to hold reserves in high‑quality, short‑duration assets, primarily U.S. Treasury bills. Galaxy Digital (ticker: GLXY) shares rose 3.2% today to $22.40, giving the firm a market cap of roughly $1.8 billion. Meanwhile, the two largest stablecoins—Tether (USDT) and USD Coin (USDC)—hold combined reserves of over $110 billion in T‑bills, making them major holders of front‑end government debt.

Key Facts - Galaxy estimates 60‑70% of future stablecoin growth will originate outside the U.S. banking system. - Each newly minted $GENIUS‑compliant stablecoin is projected to generate $0.32 of net U.S. credit expansion. - Under a base case, stablecoin‑related credit reaches $400 billion by 2030; a bull case pushes that to $1.2 trillion. - The resulting Treasury demand could compress short‑term yields by 3‑5 basis points, saving the government up to $3 billion annually in borrowing costs.

What It Means If the $GENIUS Act passes, offshore capital would fund a significant portion of dollar‑denominated credit, challenging the banking industry’s claim that stablecoins drain domestic deposits. The legislation would turn stablecoins into regulated, programmable dollar infrastructure, potentially expanding access to under‑served markets while lowering Treasury financing costs. For investors, the model suggests a structural bid for short‑term Treasuries and a new avenue for credit growth tied to digital dollar adoption.

Watch for congressional votes on the $GENIUS Act and any shifts in stablecoin reserve reporting that could affect Treasury yields and bank deposit flows.