Davis Polk partner David Portilla was featured on Bloomberg TV’s “The Close” to discuss the GENIUS Act, the stablecoin bill that recently passed through the Senate.

Discussing the net effect that stablecoin legislation would have on the industry, David said, “I think it is positive. I think the biggest takeaway of this bill becoming law is that you’ll see greater institutional adoption of the stablecoin product because it will be federally regulated. And greater institutional adoption means that there is more market demand and that means there’s more room for innovation. So, I think it is a net-net positive.”

David noted, “The real promise of this bill is to unlock innovation. Because once you have a product that is federally regulated, all types of innovators can think of how they can layer onto that product to allow consumers to access money more quickly, to make payments more quickly, to send money around the world more quickly.”

Asked about where this bill would put the U.S. compared to other countries in terms of crypto regulation, he said, “We’ll be catching up to some and leading others. During the Biden administration we really had a flashing red light to not do much and that will change. We’ll now have a green light to innovate and develop products.”

Explaining how this bill will ensure that consumers are protected, David said, “There are provisions in the bill to protect [consumers]. One, in terms of making the reserves backing the stablecoins safe and limited to a small band of assets like Treasury securities and deposits at banks. And two, there are provisions of what we call ‘preference’ for stablecoin holders, so if a stablecoin issuer were to go into insolvency, the holders of the stablecoin have priority in recovering before other creditors. And these were some of the provisions that were being negotiated down to the wire to make sure there is the right balance between unlocking innovation and protecting consumers.”

“Stocks Lose Steam in Final Minutes of US Trading,” Bloomberg’s “The Close” (starting at the 1:19:20 mark) (May 22, 2025)

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