The stablecoin market is developing rapidly, and the global regulatory landscape is taking shape.

In recent years, the cryptocurrency market has developed rapidly, but from an application perspective, the current crypto world is not fundamentally different from that of 5-10 years ago. Although the market size continues to expand and DeFi has become a major highlight, the products that have truly achieved widespread application are still currency-type products, namely Bitcoin and stablecoin.

Although both types of crypto assets have received widespread attention, their development paths are very different. Bitcoin has attracted global attention with its astonishing price increase, becoming the representative of decentralized currency. From a practicality perspective, stablecoins are the crypto assets that have truly achieved large-scale applications globally.

Currently, the global market value of stablecoins has reached $243.8 billion. According to data platforms, the total trading volume of stablecoins in the past 12 months has reached $33.4 trillion, with transaction counts as high as 5.8 billion and the number of active unique addresses reaching 250 million. These data fully demonstrate that the application demand and application logic of stablecoins have become quite mature.

However, in terms of regulation, stablecoins are still in an adjustment phase. Recently, countries around the world have been continuously improving their regulatory frameworks for stablecoins. The U.S. Senate has just passed the "Guiding and Promoting American Stablecoin Innovation Act" (GENIUS Act ), clearing obstacles for global stablecoin regulation once again.

The stablecoin market is developing rapidly, with a significant head effect.

A stablecoin is a type of cryptocurrency that maintains a stable value by being pegged to fiat currencies, precious metals, or other underlying assets. Its main purpose is to eliminate the high volatility of cryptocurrencies and provide users with reliable settlement, storage, and investment tools. As a measure of value in the crypto market, each expansion of stablecoins reflects the growth of the industry. In 2017, the global circulation of stablecoins was less than $1 billion, and today it has approached $250 billion. During the same period, the global cryptocurrency market size has also grown from less than $1 trillion to $3 trillion, gradually entering mainstream visibility.

This round of bull market can be regarded as a bull market for stablecoins. After the FTX incident, the global supply of stablecoins dropped from $190 billion to $120 billion, but then steadily increased. Within 18 months, the supply of stablecoins continued to rise, while the price of Bitcoin climbed from a low of $17,500 to over $100,000. This is mainly because the liquidity in this round of bull market comes from external institutions, and institutions usually choose stablecoins as a medium when entering the market.

Currently, there are a variety of stablecoins that can be classified according to multiple dimensions such as control center, fiat currency type, interest-bearing or not, collateral, etc. Unlike other crypto assets, stablecoins serve as a core pricing tool, with stable value and no official restrictions, allowing for usage on a global scale, which lays the foundation for them to become a global currency.

In terms of coverage, emerging markets such as Brazil, India, Indonesia, Nigeria, and Turkey have also begun to use stablecoins in daily transactions, especially in areas with weak financial infrastructure and severe inflation, apart from developed regions like Europe, America, and Japan. According to a report from a payment platform, the most popular use of stablecoins in the non-crypto sector is as a currency substitute (69%), followed by the payment for goods and services (39%) and cross-border payments (39%).

This indicates that stablecoins are gradually shedding the label of crypto investment and becoming an important entry point for the integration of the crypto market and the global economy. In terms of market share, US dollar stablecoins account for 99% of the stablecoin market, humorously referred to as the "dollar branch."

Specifically, due to the scale effect of the currency itself, the stablecoin sector shows a clear trend of the strong getting stronger, with a notable concentration of market share. Centralized stablecoins dominate, with USDT having a market capitalization of $152 billion, accounting for 62.29%; USDC has a market capitalization of about $60.3 billion, accounting for 24.71%. These two stablecoins together account for over 80% of the total market. The third is USDe, which is a semi-centralized stablecoin with a market capitalization of $4.9 billion. Algorithmic stablecoins have declined after the Terra incident, with only a few, such as USDS and DAI, still maintaining a high ranking. From the perspective of public chains, Ethereum holds an absolute dominant position, with a market share of 50%, followed by Tron(31.36%), Solana(4.85%), and BSC(4.15%).

The issuance of stablecoins is a highly profitable business. Large-scale issuance can bring marginal costs close to zero, and the direct conversion of digital currencies into cash allows issuers to obtain risk-free returns. Taking the USDT issuer as an example, its net profit in 2024 reached 13.7 billion USD, and the group's net assets soared to 20 billion USD, while the company has only 165 employees, resulting in astonishing per capita efficiency. Such high returns have attracted numerous institutions to enter the market, and in recent years, traditional financial and internet companies, such as certain payment giants and e-commerce platforms, have also actively laid out in this field. Recently, the Trump family project also launched the stablecoin USD1, which has quickly integrated over 10 protocols or applications.

Regulatory Adjustment Accelerates, U.S. Senate Passes the GENIUS Act

As institutions flock to the stablecoin market, regulation has also followed. Currently, the United States, European Union, Singapore, Dubai, and Hong Kong have all begun or have improved their legislative frameworks for stablecoins. As a global crypto hub, the regulatory trends in the United States are of great concern.

The regulation of stablecoins in the United States has gone through a process of shifting from high uncertainty to gradual clarity. Before 2025, the U.S. Congress had not enacted specific regulations for stablecoins and cryptocurrencies. Regulatory agencies such as the SEC, CFTC, and OCC have defined stablecoins, attempting to gain regulatory dominance in this emerging field. Additionally, the state-level regulatory environment has shown a trend of diversification, with New York State having an independent cryptocurrency license. This fragmented regulatory landscape has brought high uncertainty and compliance challenges to the stablecoin industry.

With the new government taking office, the regulation of stablecoins has been accelerated. In February this year, the U.S. House of Representatives and Senate respectively proposed the "2025 Stablecoin Transparency and Accountability Promotion Ledger Economy Act" (STABLE Act ) and the "Guiding and Establishing the American Stablecoin National Innovation Act" (GENIUS Act ). The concentrated introduction of these two bills reflects support from the top. At the first White House Crypto Summit in March this year, the President expressed strong interest in stablecoins, calling them a "promising" growth model, and hopes that Congress can submit relevant legislation to the President's office before the August recess.

The STABLE Act and the GENIUS Act both target stablecoin regulation, but they have slightly different focuses. The STABLE Act emphasizes federal uniform control, while the GENIUS Act leans towards building a dual-track management system that operates in parallel at the state and federal levels. Both acts require 1:1 reserve backing and monthly disclosures, but the requirements of the STABLE Act are stricter, also imposing a two-year ban on algorithmic stablecoins. The GENIUS Act, on the other hand, allows for the exploration of algorithmic stablecoin mechanisms under specific conditions and supports stablecoins providing interest or returns to holders.

During the legislative process, both bills faced challenges from multiple parties. The state government opposed the federal regulatory priority in the STABLE bill, while some industry professionals expressed dissatisfaction with the stringent provisions. The GENIUS bill was mainly questioned regarding compliance costs, with concerns that a dual-track system would increase the compliance burden and overly focus on the domestic U.S. market, neglecting the usage needs of third-world countries.

Currently, the progress of the GENIUS Act is more rapid. On May 9, the bill narrowly failed to pass in the Senate's first vote. Subsequently, the bill was revised to establish a regulatory mechanism based on size, where stablecoins with assets exceeding 10 billion are federally regulated, while those with a market value below 10 billion are regulated by individual states. The revised version also clearly separates from U.S. insurance credits and government credits, reducing systemic risks and adding restrictions on the participation of technology companies in stablecoins. On May 19, the U.S. Senate passed the procedural motion for the GENIUS Act with 66 votes in favor and 32 against, clearing the way for final legislation.

The passage of this bill is undoubtedly an important milestone in the history of cryptocurrency assets in the United States, filling the regulatory gap for stablecoins in the U.S. and clarifying the regulatory authorities and rules, further promoting the development of the U.S. stablecoin industry and adding momentum to the mainstreaming of the cryptocurrency sector. From the perspective of the United States, after the enactment of the regulation, the influence of the dollar penetrating deeply through stablecoins will become more prominent, and the trend of the cryptocurrency market becoming an appendage of the dollar will continue to strengthen, providing a core driver for building centralized and decentralized hegemony for the dollar. It is worth noting that regardless of the type of bill, stablecoin holders are required to hold U.S. Treasury bonds, dollars, etc., which also creates a new sustained purchasing demand for U.S. Treasury bonds.

Outside the United States, the global stablecoin regulatory framework is taking shape.

Compared to the United States, other regions have made earlier progress in stablecoin regulation. The European Union introduced the cryptocurrency market ( MiCA ) bill even before the United States, providing a comprehensive regulatory framework for all crypto assets, including stablecoins. MiCA categorizes stablecoins into asset-referenced tokens and electronic money tokens, likewise prohibiting algorithmic stablecoins, requiring stablecoin issuers to maintain a 1:1 capital reserve, comply with transparency rules, and register with EU regulatory authorities. At the same time, the European Insurance and Occupational Pensions Authority recommends implementing strict capital management systems for insurance companies holding crypto assets (, including stablecoins ).

Hong Kong is also a pioneer in stablecoin regulation. In December 2024, the Hong Kong government released the "Stablecoin Regulation Draft" and resumed the second reading debate in the Legislative Council on May 21 this year. Hong Kong adopts a prudent and inclusive approach to stablecoin legislation, implementing a licensing system that requires issuers to be established in Hong Kong, possess sufficient financial resources and liquid assets, and pay a minimum capital of HKD 25 million, ensuring that reserve assets are separated from other assets, and guaranteeing that the market value of reserve assets is not less than the face value of the stablecoins in circulation.

In addition, Singapore and Dubai have also ventured into stablecoin regulation. Singapore released a stablecoin regulatory framework in 2023, while Dubai incorporated stablecoins into the "Payment Token Services Regulation."

Overall, there is not much difference in global stablecoin regulation, and latecomers have clearly absorbed the experiences of pioneers. Regulatory agencies in various countries generally focus on licensing to supervise issuers and have clear regulations regarding issuance reserves, risk separation, anti-money laundering, and counter-terrorism. The differences mainly lie in the categories of stablecoins allowed, restrictions on issuers, and localized anti-money laundering compliance requirements.

Major regions around the world have successively launched regulations on stablecoins, reflecting that the role of stablecoins in the global financial market is transitioning from being overlooked to a stage of fierce competition. Stablecoins are gradually becoming an important component of the global currency market, enhancing the voice of the crypto market while also adding significant value to killer applications in the crypto field. On the other hand, third world countries are achieving 24-hour global settlements through the adoption of stablecoins, which, to some extent, realizes Satoshi Nakamoto's original vision of free electronic cash.

Looking back at the development of the cryptocurrency industry, one can't help but wonder: how many claimed value applications will survive after the sands of time have settled a century from now? As it stands, at least stablecoins and Bitcoin still hold their significance and value.