Get 25% OFF with
Code: WELCOME25
on $5K to $100K Challenges
Completing a crypto prop challenge can be your gateway to trading with substantial capital. But it is not as simple as it sounds. These firms will test your discipline, risk management, and strategy execution. So, you will need to be aware of how the challenge is structured and be compliant with the challenge as you trade consistently. The cryptocurrency market is ever-changing and provides rich opportunities while also carrying risk. As a proprietary trader, you are given the prop firm’s account to trade with, and your goal is to achieve sizable returns within defined risk boundaries. To be profitable, you can’t simply rely on gut feeling; you need an understanding of the market.
In this blog, we will cover advanced crypto trading strategies: momentum trading, mean reversion, triangular arbitrage, and diversification tailored specifically for prop traders.
On July 18, 2025, then-President Donald Trump signed the GENIUS Act into law. It was a landmark day. Not just because the U.S. finally got serious about stablecoin oversight, but because it did so with a rare feat, bipartisan support. The Act immediately became law, with full compliance expected by July 2028. And just like that, the U.S. had a roadmap for one of the most influential digital asset classes of our time.
Stablecoins are digital assets designed to maintain a fixed value, typically pegged 1:1 to fiat currencies like the U.S. dollar. Their goal? To offer the speed and borderless nature of crypto while preserving the predictability of traditional money.
Unlike Bitcoin or Ethereum, whose prices can swing wildly in a single day, stablecoins are meant to be stable stores of value. This makes them perfect for:
Stablecoins power the beating heart of decentralized finance (DeFi). Without them, borrowing, lending, staking, and yield farming would lack a reliable medium. On top of that, their role in cross-border transactions is huge. No bank hours. No conversion fees. Just frictionless money movement.
This distinction is crucial. Payment stablecoins, like USDC or PayPal’s PYUSD, are backed by real-world assets like dollars or Treasury bills. In contrast, algorithmic stablecoins, like the failed TerraUSD, rely on economic incentives or smart contract algorithms and that hasn’t always ended well.
The GENIUS Act zeroes in on payment stablecoins, the kind most commonly used in payments and trading.
By May 2025, the global stablecoin market had hit $232 billion in capitalization. That’s bigger than many banks. And yet, the legal status of stablecoins was murky. Were they securities? Commodities? Something new?
Regulators needed a clear answer, especially after:
If you blinked in 2022, you might’ve missed the biggest algorithmic stablecoin meltdown in history: TerraUSD. It lost its peg, collapsed alongside LUNA, and took billions in investor funds with it. It proved that the illusion of “peg stability” can be devastating when not backed by real assets.
Before the GENIUS Act, stablecoin oversight was a jigsaw puzzle:
No unified law meant uncertainty for developers, investors, and consumers.
The GENIUS Act fixes that.
The Creation and Introduction of the GENIUS Act in Congress
The GENIUS Act was introduced February 4, 2025, with significant bipartisan support. Senators Tim Scott (R-SC), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), and Kirsten Gillibrand (D-NY), authored the legislation out of a need to respond to market volatility and pressure for innovation.
Support came from both sides of the aisle/sectors. Wall Street, fintech startups, and even crypto-prop firms showed their support for the legislation – each seeing a future where clear rules or regulations would lead to more adoption.
The Senate Banking Committee approved it on March 13, 2025 with an 18-6 vote. The full Senate passed it on June 17, 2025, after a successful cloture motion on May 20 that broke the filibuster. Final vote tally? 68-30.
The House followed swiftly, passing the bill on July 17, 2025, with a decisive 308-122 vote. President Trump signed it the next day, calling it “a blueprint for American dominance in digital currency.”
The GENIUS Act contains a number of landmark provisions. Together, the provisions establish the framework for a U.S. stablecoin regulatory regime. The provisions are designed to provide transparency, protect consumers, support systemic stability, and promote innovation. This section provides a high-level summary of the Act’s key provisions.
Under the GENIUS Act, a two-tiered regulatory system is provided:
Together, this creates space for innovation and a sufficient bar of protection for institutions that play a systemic role.
The Act limits stablecoin issuance to entities with demonstrated financial strength and compliance capabilities:
This significantly narrows the pool of issuers, raising the bar for participation.
The GENIUS Act mandates full reserve backing:
To align with traditional finance, issuers must:
The Act asserts U.S. jurisdiction over foreign stablecoin issuers operating in American markets:
Algorithmic stablecoins (those backed by endogenous collateral or managed via code-based mechanisms) are treated cautiously:
The GENIUS Act creates a hybrid regulatory framework that clearly separates federal regulation from state regulation, representing a meaningful step away from the current patchwork regulatory environment. While this hybrid regulatory scheme establishes a clear division between federal and state regulation, it provides for an infrastructure to facilitate responsible innovation in a manner that does not jeopardize consumer protection or financial stability.
The law delineates jurisdiction based on the size and systemic impact of the issuer:
This threshold-based approach is designed to focus federal scrutiny where systemic risk is highest, without suffocating innovation at the grassroots level.
To ensure consistent quality across jurisdictions, the Act creates a Stablecoin Certification Review Committee (SCRC). This committee includes officials from:
to determine if the regulatory framework of a state is “substantially similar” to the federal standards established in the GENIUS Act. If a state’s framework is “substantially similar” stablecoin issuers can legally operate in that state without federal licensure (as long as they comply with the $10 billion threshold).
This structure serves as a regulatory sieve: regulating state-level experimentation within national standards.
States retain their ability to charter and supervise stablecoin entities, but now do so within a harmonized national policy architecture. Unlike earlier proposals that would have federally preempted state oversight entirely, the GENIUS Act adopts a more cooperative stance.
This represents a middle path:
Regulatory agencies operating at both federal and state levels should follow collaborative strategies for enforcement actions, especially when multiple jurisdictions are involved with the same issuer. For instance:
By working together, regulators form a more full-scope net of coverage and catch challenges that might have previously fallen through regulatory gaps.
Before the GENIUS Act, the stablecoin industry existed in a regulatory gray zone – some firms were regulated under money transmission laws, others claimed exemptions, and many operated in legal limbo. This created:
The federal-state model provides a clear answer to “Who regulates what?”, enabling both innovation and protection to coexist more effectively.
The big question everyone asks: Are stablecoins really backed 1:1?
GENIUS tackles this head-on by mandating:
This is a direct response to past controversies like TerraUSD and even scrutiny faced by Tether.
If GENIUS passes, it will likely end speculative reserve practices and force all major issuers to maintain true dollar-for-dollar backing. This gives consumers and institutions more confidence and possibly opens doors for more banks and payment processors to integrate stablecoins.
GENIUS doesn’t just focus on the backend reserves; it guarantees the user experience too.
It requires that:
This aims to turn stablecoins into true digital cash, where 1 stablecoin equals 1 dollar, no matter the market conditions.
In a world where some stablecoins have depegged under stress, this provision might be the most consumer-friendly part of the bill.
The GENIUS Act inserts a full chapter on consumer safeguards, ensuring:
This is where GENIUS draws inspiration from the traditional banking world – aiming to protect the “little guy” while building stablecoin infrastructure.
In fact, if executed well, these provisions could finally make stablecoins mainstream enough to be trusted by your mom, your grocery store, or your neighborhood lender.
For prop trading firms and funded traders who use stablecoins to move capital, hedge, or settle trades, GENIUS could reshape backend operations.
Here’s how:
Bottom line? Prop firms may need to re-architect wallets, funding flows, and liquidity strategies around GENIUS-compliant stablecoins.
But there’s a silver lining: greater clarity also means fewer banking lockouts, more mainstream integrations, and lower counterparty risk.
Though the bill is aimed at issuers, its ripple effects will hit DeFi protocols and wallet providers too.
DeFi protocols might:
Wallet providers (like MetaMask, Coinbase Wallet, or Phantom) may:
The result? A “compliance layer” may emerge between stablecoins and the DeFi tools built on top of them.
GENIUS doesn’t stop at U.S. shores.
Any foreign firm issuing or promoting stablecoins to U.S. customers will need to:
This means even offshore exchanges or wallets that integrate stablecoins must take GENIUS seriously – or risk getting blocked, fined, or delisted.
It also means stablecoin markets might bifurcate into:
For firms with global user bases, the smart move is to begin building GENIUS compliance into their product stack now.
GENIUS indirectly pressures centralized exchanges like Coinbase, Kraken, and Binance.US to:
Expect exchanges to launch GENIUS-compliant labels, just like they did for MiCA-compliant tokens in Europe.
For traders, this could reduce fragmentation and make it easier to filter trusted stablecoins from risky ones.
Short answer? Practically, yes.
GENIUS requires:
That bans Terra-like models or entirely crypto-collateralized systems that do not hold reserves in the real economy.
While it does not literally make these models criminal, it makes sure they can never be legal tender in the U.S., can never be listed on a compliant exchange, and cannot be used with regulated firms.
This kills off a lot of the speculative perception, but it may also hinder some innovative alternative finance.
Europe’s MiCA law created rules for “e-money tokens” and “asset-referenced tokens,” demanding:
GENIUS is similar in spirit but narrower:
In a way, MiCA is broader, covering more token types. But GENIUS is more surgical – targeting USD coins with extreme precision.
If both succeed, we may see a duopoly emerge: U.S.-compliant vs. EU-compliant stablecoins, with firms needing to support both models.
One of the most surprising twists of GENIUS is how much power it gives the Fed.
Under the bill:
This positions the Federal Reserve not just as a monetary policy authority, but a de facto digital dollar watchdog.
Some critics argue this blurs the line between central banking and financial regulation. Supporters say it’s necessary to ensure consistency, especially as stablecoins begin to touch payment rails.
GENIUS is seen by some as a precursor or alternative to a U.S. CBDC (Central Bank Digital Currency).
Here’s why:
Rather than launching a CBDC, the U.S. might let regulated stablecoins act as proxies – achieving many of the same policy goals (financial inclusion, cross-border payments, digital finance adoption) without needing a full government-run coin.
That’s the genius of GENIUS.
With tighter rules around issuance, redemption, and exchange use, GENIUS will likely push KYC deeper into wallets.
This creates friction but also builds the bridge to institutional adoption, where verified digital wallets could replace traditional bank accounts.
GENIUS doesn’t send them to crypto jail, but it excludes them from regulated finance:
Over time, these coins may:
This is similar to what happened with non-SEC compliant ICOs – still around, but pushed into the shadows.
GENIUS has teeth.
This isn’t just a set of recommendations – it’s enforceable law. Prop firms, wallet providers, and exchanges would be smart to build legal teams now.
The bill is currently in the 2025 legislative cycle, with bipartisan backing. If passed, GENIUS allows:
This means the earliest full implementation could be late 2027, though parts (like registration or disclosures) may go live sooner.
For now, it’s not law – but it’s one of the most developed stablecoin proposals to date. And if you operate in crypto, you need to be preparing for it.
The GENIUS Act marks a turning point. For the first time, the U.S. isn’t just reacting to stablecoins – it’s shaping their future.
By tightening oversight, guaranteeing redemptions, and building trust, GENIUS opens the door to:
Sure, some parts of the crypto world may feel boxed in. But for those who play by the rules, GENIUS offers legitimacy, access, and long-term survival.
This bill might just be the first real foundation for a digital-dollar economy.
Stay ahead. Stay informed. And if you’re a firm building with stablecoins, now’s the time to get GENIUS-ready.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) is the first federal legislation, passed in July 2025, to regulate payment stablecoins. It came on the heels of significant use of stablecoins and multiple crises, like the TerraUSD collapse, where major deficiencies in reserve transparency, regulatory clarity, and consumer protection were made plainly visible.
The GENIUS Act was signed into law on July 18, 2025. Although federal agencies have up to 180 days (early in 2026) to issue final rules, existing issuers will get a 3-year transition period, spending until July 2028 to become fully compliant.
Only entities that are financially strong and have a compliance infrastructure can issue regulated stablecoins, specifically:
Stablecoins must be backed 1:1 with high-quality liquid assets such as U.S. dollars, Treasury bills, or insured demand deposits. Reserves must be segregated, not leveraged or lent, and disclosed monthly. Issuers above $50 billion in circulation require annual independent audits.
Not directly. But it makes their use in regulated markets extremely difficult by requiring full dollar-backed reserves and banning endogenous collateral. A Treasury-led risk review on algorithmic stablecoins is also mandated within a year.
Disclaimer: All information provided on this site is for educational purposes only, related to trading in financial markets. It is not intended as financial advice, business or investment recommendation, or as an opportunity or recommendation to trade any investment instruments. Hola Prime only provides an educational environment to traders, including tools, materials and simulated trading platforms which have data feed provided by Liquidity Providers. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local laws or regulations.
The only prop firm with
1-HOUR PAYOUT.
Get Started for just
$37
