Will the GENUIS act (US Congress stable coin legislation) motivate Dfinity to invest in native USDC integration? My company would like to build payment solutions on ICP but we fear that ckUSDC won’t be viewed as a true stable coin under legislation.
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Can you be more specific as to why it would not qualify(and what non-qualification means)?
Hi, @BradleyLeapfrog @skilesare
Great to see this discussion on the GENIUS Act! Our team at CLPFinance has just published an in-depth analysis of the proposal and its potential impact on stablecoin regulation. We strongly believe that regulation is inevitable, and Crypto-Collateralized stablecoins like CLP’s CDP model will play a key role in this evolving landscape.
We don’t oppose cross-chain stablecoins, but regulatory transparency is a critical factor that must be considered. That’s why CLP is focused on building a native stablecoin for the ICP ecosystem—ensuring compliance while maintaining decentralization.
We’d love to discuss this further and explore potential synergies. Given your interest in building payment solutions on ICP, CLP could be a strong complement to your plans. Let’s connect!
Here’s our article for reference:
The GENIUS Act Proposal: CLP’s Strategic Alignment and the Future of Stablecoin Regulation
The GENIUS Act Proposal: CLP’s Strategic Alignment and the Future of Stablecoin Regulation | by CLP Finance | Feb, 2025 | Medium
Looking forward to your thoughts!
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Very interesting. Thanks for sharing. I actually already had my eye on CLP. So CUSD would be collateralized by ckBTC and ckETH? Even at 110% how could that ensure a peg to USD considering market volatility? Also, do you have plans for on and off-ramping which is dominated by Circle at the moment?
I fear there could be a provision in the Act that only native stable coins would be eligible, for example, for any consumer protection. Or the lack of clarity of what ckUSDC really represents would make getting insurance for payment platforms more difficult. There are example on other chains (e.g. Moonbeam/Moonriver on Dot) where a USDC ‘mirror’ was hacked and it was a disaster. I know ckUSDC is not the same but its about perception. ICP just needs to invest in native established stable coin to enable the payments use case.
Stupid question maybe(and I haven’t rested the paper yet, so if you answer there just tell me to rtfm), but why would backing with ckUSDC or ckUSDT not qualify?(probably separate answers given past teather shadiness, but at least disc seem pretty 1:1 backed Ithink.
Glad to hear you’re keeping an eye on CLP!
To clarify CLP’s position: We believe every blockchain ecosystem should have at least one native stablecoin. This has less to do with the market share of that stablecoin or its ability to be cross-chain, but more about ensuring a clear risk management framework through native issuance. While I agree that native stablecoins are not the only option to meet regulatory requirements, we must recognize that as cross-chain technology matures, cross-chain assets will become more common, and we’re already seeing a rise in multi-chain DApps that support all kinds of tokens.
Initially, CLP will focus on ckBTC, and we’ll also support ckETH and ICP. As we continue to expand, more assets from other major blockchains will be incorporated as they bridge to ICP. The 110% collateralization ratio isn’t fixed—it will be adjusted via DAO governance, based on market dynamics. The collateralization ratio essentially reflects market volatility over a defined period, and as we evolve within the ICP ecosystem, we’ll follow the DAO governance framework laid out for ICP’s development.
In terms of the market landscape, it’s dynamic and constantly evolving. I frequently monitor platforms like DeFiLlama (https://defillama.com/stablecoins) and TheBlock (https://www.theblock.co/data/stablecoins/usd-pegged) to track stablecoin rankings. We’ve seen the emergence of new stablecoins and shifts in the rankings. With the introduction of the U.S. GENIUS Act, USDT’s market share is likely to change as well. CLP’s approach is to take a measured, steady approach, growing alongside the ICP ecosystem and gradually expanding our reach to other blockchain ecosystems when the time is right.
Regarding on and off-ramping, while Circle currently plays a significant role, I believe in the crypto world, there’s no absolute “dominance.” We’re all contributing to the industry’s growth, each with different starting points and paths. The concentration effect in crypto is weaker compared to traditional industries, so there will always be opportunities for new solutions and players to emerge.
I understand your concern about the USDC ‘mirror’ hack on other chains. However, the key issue wasn’t about being native versus mirror, but rather the specific security vulnerabilities tied to that particular implementation. While it’s true that perception matters, the real risk comes from how well the token is designed and secured, regardless of whether it’s native or mirrored.
That said, from a security and risk isolation standpoint, I do agree with you that ICP should prioritize native stablecoins. Even if cross-chain stablecoins may have larger market shares, native stablecoins provide a clearer and more secure path for the ecosystem, ensuring better risk management and control over the assets.
ICP’s Chain Fusion mechanism is the most advanced cross-chain technology available. It’s highly decentralized, and you can even consider the ck series as native to ICP. I remember Dom mentioning on Twitter that “ckBTC is essentially BTC.” By that logic, ckUSDC and ckUSDT are the representations of USDC and USDT on the ICP chain. So, using ckUSDT and ckUSDC within the ICP ecosystem is absolutely fine.
However, the topic we’re discussing here revolves around the GENIUS ACT, which addresses changes in the regulatory landscape for the stablecoin market and our development opportunities. For the ICP ecosystem, having at least one native stablecoin makes sense, while cross-chain tokens like USDT and USDC could see dynamic changes in market share due to factors such as the specific blockchain they’re on, differing regulations, and adjustments in cross-chain mechanisms. As mentioned earlier, USDT’s market share is expected to fluctuate significantly with the introduction of the GENIUS ACT.