The stablecoin bill has passed, how does FRAX become the biggest winner?

The founder participated in the formulation of the GENIUS bill, and the price of FXS doubled within the month.

Written by: Alex Liu, Foresight News

Stablecoin Act and FXS

On May 20, the "GENIUS Act" legislation for U.S. stablecoins passed in the Senate vote, with only the House vote and submission for presidential signature remaining before it can be officially enacted. The market previously viewed the Senate vote as the biggest obstacle to the passage of the bill, and barring any surprises, the complete passage of the bill is merely a matter of time.

Which crypto project is the biggest winner of this legislative victory? In terms of token price performance, it might be Frax Finance.

With the passage of the bill in the Senate, the Frax Finance token FXS (now renamed to FRAX, yet to be updated on centralized exchanges) once surged above 4.4 USDT, ranking first on the major exchanges' increase list. Even though the price has slightly corrected at present, looking at the longer time frame, the increase of FXS within the month still exceeds 100%.

Why does this bill favor Frax Finance, and why is Frax regarded by some as the biggest winner of the GENIUS bill?

Frax Finance

Frax Finance's products are not just stablecoins; they also include liquid staking, lending, L2, and so on. However, they have a deep connection with stablecoins. Frax was once the issuer of the hybrid algorithmic stablecoin FRAX, but after the Luna UST collapse, it abandoned the "algorithmic stability" track and transformed into a fully collateralized stablecoin.

Subsequently, FRAX was further updated to frxUSD, using fiat currency as collateral, "the entire roadmap is to become the first licensed fiat currency stablecoin."

Frax founder Sam hinted that Frax stands to benefit the most from this legislation

But how does frxUSD qualify to be the "first" licensed fiat currency stablecoin ahead of products like USDC and USDY? In terms of regulation, it does indeed have the possibility of "getting the advantage of being close to the water tower."

Sam Kazemian, the founder of Frax Finance, has frequently shared photos of himself with cryptocurrency legislative figures in Washington, D.C. since the beginning of this year. It is rumored that he has been deeply involved as an industry insider in the discussion and drafting of the "GENIUS Act." The market seems to be pricing in the regulatory advantages that Frax Finance may gain from this.

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Sam takes a photo with crypto-friendly Senator Lummis

If the speculation is true, as the drafter and participant of the bill, Sam naturally has a deeper understanding of the "GENIUS Act" and finds it easier to align his own project with the requirements. Moreover, it remains to be seen whether friendly relations with legislators will open the regulatory green light for the future of FRAX.

The future roadmap of FRAX

In addition to potential regulatory advantages, FRAX is building a vertically integrated stablecoin ecosystem, including frxUSD (stablecoin), FraxNet (bank interface), and Fraxtal (L2 execution layer), to adapt to the needs of future regulatory environments:

• frxUSD: A stablecoin for FRAX, pegged 1:1 to the US dollar.
• FraxNet: A banking interface designed to connect traditional financial systems with DeFi.
• Fraxtal: An L2 execution layer (or gradually transitioning to L1) that provides efficient transactions and scalability.

Token reorganization is also part of FRAX's future plans. FXS has been renamed to FRAX, and functions such as Gas, governance, burning, and staking have been assigned to it. This adjustment aims to enhance the functionality and market competitiveness of FRAX, making its operations more flexible in a compliant environment.

Staking FRAX for veFRAX can earn potential rewards such as FXTL (Frax's own points), Karak, Ethena, and Symbiotic points.

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The founder actively engages in legislation related to stablecoins and adjusts the product roadmap to serve the narrative. With the further implementation of the "GENIUS Act", the performance of FXS (FRAX) is worth looking forward to.