LINK, the native token of Chainlink, has surged vibrantly over the last 24 hours, rallying by over 8% due to a record legislation breakthrough in the United States. The recently passed GENIUS Act gives legal certainty to the use of stablecoins and digital assets, allowing U.S. banks to offer crypto and stablecoin custody services. This regulatory development will serve as one of the key drivers of an institutional shift towards increased blockchain-based solution adoption. 

With the passing of the GENIUS Act, Chainlink could become an essential infrastructure provider as banks move towards the incorporation of digital assets into their services. Its decentralized oracle network alongside its compliance-oriented innovations makes LINK a key piece in bridging traditional finance (TradFi) with the blockchain. 

Chainlink’s Pumps Over 8% as GENIUS Act Opens the Door for Compliance

The last 24 hours have been monumental for the United States as the House passed the GENIUS Act, legislation that aims to regulate stablecoins issuance. Following the passing of this legislation, the price of LINK pumped to $19.09, as per data by Coingecko. However, the price has dropped slightly to $18.53 recording a modest 8% surge on the day, as of this writing. 

LINK’s price rally has been majorly fueled by the passing of the GENIUS Act in the Crypto Week. The GENIUS Act is not just a symbolic victory of the crypto sector. It provides a straightforward framework to U.S financial institutions, giving them the right to hold and issue stablecoins. However, this progress spawns the need for regulatory-compliant structures to support the interaction between TradFi systems and decentralized networks.

Chainlink provides this solution with its Automated Compliance Engine (ACE). The ACE makes sure that cross-chain transactions and digital asset custody are in full compliance with the legal frameworks. With banks experimenting with stablecoin issuance and custody, ACE is an off-the-shelf compliant solution. It requires less work around research and development of compliant solutions.

“Chainlink is the only financial infrastructure platform that uniquely provides proof of reserves, cross-chain connectivity, and onchain identity & compliance in a single system – all critical to securely scaling the stablecoin ecosystem for global adoption,” Chainlink wrote after the passing of the GENIUS Act. 

LINK’s Exchange Supply Drops to a Record Low

Chainlink’s bullish momentum is also backed by low supply on exchanges. The exchange reserves of LINK have dropped sharply to a record low of 150.1 million tokens, per CryptoQuant data. 

Normally, the exchange reserve metric shows the number of tokens in exchanges. A drop in this metric to a record low signifies a reduction in selling pressure. It also suggest that investors are shifting to long-term holding. The crypto community usually interprets this to mean high optimism and conviction amongst investors. 

Chainlink has the potential to grow as regulatory clarity, state-of-the-art compliance tools, and institutional integration continue to rise. Its recent rally could be the start of a broader bullish cycle as it establishes its presence in the emerging digital economy.