In the bustling world of cryptocurrency, Ethena’s USDe stablecoin is catching eyes and raising eyebrows. Since the passage of the GENIUS Act in early June 2025, which aimed to bolster digital currency innovation in the United States, USDe has seen significant growth. However, as the digital currency landscape evolves, some analysts are whispering comparisons to the ill-fated UST, sparking both excitement and concern.
The USDe Surge: A Post-GENIUS Act Phenomenon
The GENIUS Act, designed to support the burgeoning digital economy, has been a boon for cryptocurrencies, with Ethena’s USDe leading the charge. The act, which provides tax incentives and regulatory clarity for digital assets, has catalyzed a wave of investment and innovation. As a result, Ethena’s stablecoin has surged in popularity, positioning itself as a major player in the stablecoin market. This surge is part of a broader trend, as highlighted in our recent analysis of Top 8 USD Stablecoins By Market Cap Top $245 Billion in July.
According to crypto market analyst Sarah Kim, “The GENIUS Act has created an environment where digital currencies can thrive, and USDe is seizing the opportunity. Its rapid growth is a testament to the demand for stablecoins in today’s volatile market.” Indeed, the numbers speak for themselves—USDe’s market capitalization has doubled since June, and transactional volumes are climbing.
But it’s not all rosy. Some experts are drawing parallels between USDe and the notorious UST, whose collapse in May 2022 sent shockwaves through the crypto community. “We must tread carefully,” cautions John Weaver, a financial analyst specializing in cryptocurrencies. “The similarities in rapid growth and market conditions are there, and while USDe is on the rise, it’s crucial to ensure it doesn’t follow UST’s path.”
Echoes of UST: A Cautionary Tale?
The specter of UST looms large. For those who remember, UST’s unraveling was swift and catastrophic, leaving investors reeling. The collapse served as a stark reminder of the risks inherent in the stablecoin sector. So, what makes USDe different—or does it?
Critics argue that USDe’s growth is based on similar premises that led to UST’s downfall: aggressive expansion and reliance on favorable market conditions. “It’s a house of cards,” said crypto skeptic Mark Lewis. “When the winds change, it could topple.”
However, supporters point out that Ethena has learned from past mistakes. The company has implemented robust risk management strategies and transparency measures that they claim differentiate USDe from its predecessors. Additionally, Ethena’s partnerships with established financial institutions lend an air of credibility and stability. This approach is reminiscent of recent developments in the stablecoin sector, as noted in Cardano’s Hoskinson Lauds New Stablecoin, Touted as “More Advanced” Than USDC.
Here’s the catch: while USDe seems to have a safety net, the volatile nature of cryptocurrency markets means nothing is ever certain. Investors are hopeful but wary, keeping a close watch on market trends.
Looking Ahead: Opportunities and Challenges
So, what does the future hold for USDe? The stablecoin’s growth trajectory appears promising, buoyed by regulatory support and investor interest. Yet, as with any burgeoning asset, challenges loom.
One potential hurdle is the evolving regulatory landscape. While the GENIUS Act has provided a much-needed framework, the global regulatory environment remains fragmented. Any shifts in policy could impact USDe’s growth.
Moreover, competition is fierce. Stablecoins like Tether and USD Coin are well-entrenched, and newcomers like USDe must innovate continuously to capture market share. The pressure to maintain transparency and security is relentless.
Despite these challenges, the crypto community remains cautiously optimistic. “USDe has the potential to redefine the stablecoin market,” observes blockchain expert Rachel Lin. “But it must navigate the complexities with care and foresight.”
As Ethena’s USDe continues its ascent, the crypto world watches with bated breath. Will it become a mainstay in the digital currency realm, or will it falter like its infamous predecessor? Only time will tell. Meanwhile, investors and analysts alike remain vigilant, mindful of both the potential rewards and the risks that lie ahead.
Source
This article is based on: USDe Booms Post-GENIUS Act, But Is Ethena’s Stablecoin the UST of This Cycle?
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
