Author: Aaron Basi, Head of Product at IoTeX
With the recent passage of the GENIUS Act, the United States has taken its first step toward regulating cryptocurrency on a national level. The act focuses on stablecoins, establishing reserve rules, audits, and authorized issuers. This is a milestone for the industry. If lawmakers want to support the next wave of innovation, they cannot stop here.
One of the fastest-growing areas—Decentralized Physical Infrastructure Networks (DePIN)—still lacks a legal framework.
DePIN is not about speculation or NFTs. It involves building real-world infrastructure through community-owned hardware. People contribute antennas, sensors, or hard drives and receive token rewards. These systems support services like wireless connectivity, mapping, and decentralized storage.
Unlike many blockchain use cases, DePIN is already operational and growing rapidly.
Projects like Glow have generated over $15 million in revenue, while Geodnet reports annual recurring revenue exceeding $1 million. The DePIN protocols across the ecosystem have collectively generated over $250 million in revenue. These are not pilot projects; they are functional networks providing value to users and contributors.
They still lack regulatory clarity. Unlike stablecoins, which are now governed by clear federal rules, DePIN projects operate in a gray area. This uncertainty puts users, developers, and investors at risk.
DePIN systems rely on real-world data and infrastructure. They cannot be fully classified under telecommunications, cloud computing, or cryptocurrency categories. This makes existing laws difficult to apply.
Many DePIN protocols depend on devices that collect and share environmental or specific location data. There are no clear standards regarding what data can be collected, how it is stored, or who owns that data. Without this, users may lose trust and choose to opt out.
Compensation is another unresolved issue. People deploy hardware out of their own pockets, but there are no benchmark rules for how to earn rewards. If incentives dry up or token economics change, contributors will bear the risk without protection.
Governance brings its own challenges. Many DePIN projects claim to be decentralized, but key decisions remain in the hands of core teams. If these systems are to serve the public good, they must be transparent and accountable.
The GENIUS Act demonstrates that cryptocurrency regulation does not have to be destructive. It provides a foundation for stablecoins without stifling innovation. DePIN deserves a similarly detailed approach.
DePIN is different from financial tokens. It exists at the intersection of hardware, software, and services. This hybrid nature means it requires a tailored framework. It should not be treated like decentralized finance (DeFi) or stablecoins.
What is needed is a definition of what qualifies under DePIN protocols. There should be standards for data ownership, privacy, contribution tracking, and reward mechanisms. Transparent governance rules are also crucial for building trust and accountability.
DePIN has the potential to expand infrastructure in underserved areas, create smarter cities, and return ownership of essential systems to communities. To achieve this scale, the industry needs legal clarity.
Without regulatory certainty, investors will hesitate. In systems lacking user protection, communities will resist joining. Builders may pause progress out of fear of future penalties. Momentum depends on clear guidance.
Now that stablecoins have a legal framework, DePIN should be next.
Congress and regulators have the opportunity to shape the future of decentralized infrastructure. DePIN builders are ready to collaborate. What is needed now is a policy framework that supports transparency, innovation, and user protection.
The GENIUS Act is a strong first step. It should not be the last step. It is time to recognize the potential of physical infrastructure built and operated by users.
DePIN has arrived. It is growing. It belongs in the regulatory dialogue.
Author: Aaron Basi, Head of Product at IoTeX
Related: Hong Kong to launch a six-month transition period to implement new stablecoin regulations
This article is for general informational purposes only and is not intended to be, nor should it be construed as, legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: Opinion: With the passage of the GENIUS Stablecoin Act, DePIN may be the next frontier
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