The GENIUS Act is too little, too late for US crypto

Trump’s GENIUS Act is in the hot seat of global crypto news, and everyone’s got an opinion on what it might mean for U.S. DeFi. For me, at least, while it’s certainly a good step forward, Trump’s move will simply not be enough to topple the UAE from the crypto throne. Regardless of this new legislation, the UAE will forever be the industry’s heavyweight champion.

Now, don’t get me wrong, the GENIUS Act is certainly a positive, proactive piece of crypto policymaking from the U.S. government. It will ensure that stablecoins are pegged one-for-one by their respective assets, treat issuers — like Tether (USDT) — as financial institutions under the Bank Secrecy Act, and provide stronger consumer protection by holding issuers to a higher standard of anti-money laundering compliance.

It’s just not enough 

The legislation, signed last month, only addresses stablecoins — not digital assets as a whole. Plus, it won’t take effect until at least mid-2026, as regulators still need time to craft the necessary rules for implementation. Even with it, the fact is that the country will still be a far cry away from the “crypto capital of the world” that President Trump promised.

Realistically, if the U.S. ever had any hope of taking the UAE’s crown, it needed to be quicker out of the blocks. GENIUS is too little, too late, and there are a few reasons why. 

For a start, the UAE began refining its crypto regulation as early as 2018, with the establishment of Abu Dhabi’s Financial Services Regulatory Authority (FSRA). Dubai then established the Virtual Assets Regulatory Authority (VARA) in 2022. All in all, the region offers a mature regulatory infrastructure that provides bespoke licensing, trading, custody oversight, and fraud prevention for crypto. The GENIUS Act may be the United States’ first landmark crypto regulation, but, frankly, it’s seven years too late to compete.

Then there’s the fact that the Central Bank is launching its own CBDC — the Digital Dirham — which will be supported by all financial institutions registered in the UAE as soon as 2026. For me, the jury is out on the efficacy of CBDCs, but nonetheless, the UAE is going beyond simply accepting digital currency to making it a pillar of its economy. 

The U.S., on the other hand, has gone in the complete opposite direction — Trump has signed an executive order preventing federal agencies from issuing or endorsing central bank digital currencies. So, it’s not just a feeling that the U.S. is light-years behind — the fact is that the U.S. has actively positioned itself against some developments in the decentralized finance space.

Of course, there is also another — and perhaps more obvious — nail in the coffin for the U.S.’s crypto ambitions. Tax. 

The UAE imposes zero tax on income and capital gains made from crypto, which is, by all means, an attractive incentive. Compared to high-tax jurisdictions like the EU and the U.S., it’s an obvious top choice for investment activity. Put simply, instead of turning away from crypto activity and investment, the country is actively encouraging it.

In light of the above, it’s clear why the UAE has become the perfect incubator for DeFi innovation. And where investment goes, innovation follows.

OKX, the world’s second-largest cryptocurrency exchange, is underway with launching regulated crypto derivatives for retail investors in the region, where access was previously gatekept for professionals. OKX’s choice of the UAE as its launchpad only reinforces the country’s position as a superior crypto market. OKX and its people have been drawn to the UAE by its mature infrastructure, clear regulatory environment, and consistent innovation.

Of course, the UAE is well incentivized to keep a tight hold on its title as crypto’s first-choice market. The country is home to an astronomical 516 crypto startups and over 1,000 blockchain tech startups. Plus, the country’s foreign direct investment is at an all-time high after bringing in a record-breaking AED 167.6 billion in capital inflows in 2024 — making it the world’s 10^th largest recipient of FDI. Considering everything, I can’t imagine the UAE’s conveyor belt of crypto-positive regulations will slow down anytime soon.

If the U.S. is still aspiring to become the world’s pre-eminent crypto superpower, it’ll need to fight tooth and nail. But as things stand, their latest legislation isn’t timely or mighty enough to get them over the line.

Perhaps FDI is why the UAE’s government has thrown its full support behind DeFi advancements, or maybe it’s that the UAE already has the highest Bitcoin (BTC) ownership rate worldwide. Either way, with its regulatory, innovation, and tax benefits, the country has pulled far ahead — and I don’t see any other international market bridging the gap any time soon.