The crypto industry just got a major wake-up call. In early 2025, the U.S. Senate advanced the GENIUS bill. This is some proposed legislation meant for stablecoins, which are digital assets that are tied to currencies such as the dollar or euro. Even though the bill needs to clear more hurdles, its progress shows that Washington is paying more attention to crypto-based financial products.
So what does this mean for startup investors? Especially those backing early-stage projects in the crypto and fintech space?
To get perspective, we look to Dmitrii Khasanov, founder of the Arrow Stars investment fund and a digital marketing guru with a sharp focus on startup strategy and digital finance trends. According to Khasanov, the GENIUS bill may be one of the most significant developments for Web3 investors in the U.S. this year.
What’s Actually in the GENIUS Bill?
The GENIUS (Government-Enforced National Integrity for Uniform Stablecoins) bill is designed to bring stablecoins under federal oversight. It includes several key points:
- Mandatory registration for all issuers of U.S.-based stablecoins
- Full collateral audits and reserve transparency
- Limits on algorithmic stablecoins unless they meet new risk standards
- Protections for consumers who use stablecoins for payments and remittances
- A licensing regime that gives regulatory responsibility to the Federal Reserve and the Treasury
In short, it turns what was a mostly unregulated corner of the crypto world into something more like a supervised financial service.
Why This Matters for Startups
According to Khasanov, this isn’t just about making rules—it’s about who gets to operate in the space. For crypto startups building products that rely on stablecoin transactions, the GENIUS bill introduces new compliance costs, new technical requirements, and new expectations from investors.
Startups may need to hire legal teams earlier, rethink how they hold customer funds, or switch to working with licensed issuers. That changes the math for early-stage ventures, many of which are used to launching fast and worrying about regulation later.
Khasanov thinks this could lead to a shift in how crypto startups are evaluated. In the past, having a working demo or a strong community was enough to raise capital. Now, investors will look more closely at how teams plan to navigate regulatory hurdles and whether they have partners who are already compliant.
A Risk and an Opportunity
While stricter rules can slow things down, Khasanov believes they could also create a healthier startup environment. With better guardrails in place, consumer trust might rise, making it easier for serious companies to scale.
Startups that already focus on security, transparency, and responsible operations will have an edge. According to Khasanov, regulatory clarity is something serious investors actually want. It reduces legal uncertainty and makes it easier to price risk.
For example, a startup that offers international remittances using stablecoins will now need to show exactly how those coins are backed, what licenses they operate under, and how they protect user funds. That might sound like a burden but it’s also a path to mainstream adoption.
Impact on Investment Strategy
Khasanov believes that investors in 2025 are moving toward startups with stronger operational discipline. The GENIUS bill fits into a broader trend: regulators in multiple countries are beginning to draw firmer lines between compliance-ready fintechs and “move fast and break things” crypto projects.
This means due diligence processes will likely expand. Early-stage investors may ask about legal structure, compliance planning, and reserve custody much earlier than before. Teams that are proactive on these fronts will stand out not just because they check boxes, but because they signal long-term thinking.
Khasanov also points out that regulation often creates new business opportunities. As the GENIUS bill moves forward, he expects to see new types of B2B services: compliance automation platforms, legal-as-a-service for crypto startups, and infrastructure providers that help companies issue stablecoins the “right” way.
In other words, while some startups will struggle with the new rules, others will build tools to help the whole industry adapt. That’s where Khasanov sees a lot of untapped potential.
A Moment to Rethink the Space
If the GENIUS bill becomes law, it won’t just affect companies that issue or use stablecoins. It will reshape how the entire ecosystem builds trust with users, with investors, and with regulators.
Khasanov thinks this is a moment to rethink what makes a crypto startup investable. Hype and vision still matter, but so do legal readiness, governance, and long-term sustainability.
For founders, that means building with regulation in mind not as a blocker, but as a part of strategy. For investors, it’s about adjusting filters, asking smarter questions, and backing teams who are ready for a maturing market.
Crypto is growing up, and startup investors will need to grow with it.
