The regulation sets the foundation for broader on-chain finance with stablecoin-driven capital markets now in the spotlight.
The United States has passed the GENIUS Act, establishing a regulatory framework for on-chain stablecoins. The legislation is expected to accelerate the adoption of digital dollars for payments, remittances, and decentralised finance (DeFi) use cases—particularly those involving tokenised real-world assets (RWAs).
As stablecoins become more accessible and regulated, policymakers and industry participants are highlighting the need for capital markets regulation to evolve in parallel.
Stablecoins currently offer annualised yields between 4% and 10.3% in RWA-based DeFi, a significant contrast to the 0.46% average yield offered by traditional savings accounts. This yield gap is prompting capital migration into on-chain environments, particularly among technology-forward users and businesses seeking alternatives to high credit card fees and low-yield savings products.
According to RWA-focused blockchain Plume, the GENIUS Act’s success in bringing stablecoins into the mainstream will require a corresponding regulatory approach to support tokenised capital markets. Without such measures, there are concerns that the growth of on-chain financial services may outpace oversight, creating risks around financial stability and equitable access.
Plume, which launched its mainnet in May 2025, saw rapid growth with over US$150 million in total value locked (TVL) and more wallet addresses holding tokenised RWAs than any other network. The company is focused on enabling small- and medium-sized enterprise (SME) lending via blockchain, using community bank origination, and tokenisation to improve the distribution of capital.
The rise of tokenised private credit markets is also reflected in broader market data. According to RWA.xyz, private credit RWAs, which mostly comprise SME loan portfolios, grew from under $10 billion to over $13 billion during the first half of 2025. This trend is expected to continue as more investors seek exposure to on-chain fixed income products.
Plume has proposed a range of policy recommendations to support the growth of capital markets on public blockchains. These include:
- Regulatory clarity from the Securities and Exchange Commission (SEC) on tokenising off-chain securities
- A sandbox framework to support DeFi projects with a focus on asset-backed securities
- Guidance from banking regulators to facilitate on-chain product issuance
- Consistency across regulators in managing on-chain financial risks
- Tax incentives to encourage tokenisation, particularly for community development and SME finance
The company also notes that blockchain infrastructure can reduce the cost and complexity of securitising loans by automating tasks, enabling real-time data sharing, and enhancing operational efficiency.
Legal certainty around stablecoins is bringing payments on-chain, but will capital markets follow? Salman Banaei, General Counsel of Plume, believes that achieving that shift will require more than just market structure legislation; it will demand clear guidance from securities and banking regulators to address the tokenisation of traditional assets like equities, bonds, and fund shares.
“For legal certainty there, we have to look to the securities and bank regulators. Though market structure legislation would help, it won’t address tokenisation of traditional investment products like public equities, bonds, shares in investment funds, certificates of deposit, etc.,” said Banaei.
The SEC’s innovation exemption proposal suggests a willingness to support on-chain capital markets, but adapting existing securities laws designed for traditional intermediaries remains a major challenge. New approaches must deliver the same or better policy outcomes using blockchain settlement, DeFi trading protocols, and consumer-facing apps.
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