The US GENIUS Act has been passed, and the global stablecoin regulatory framework is gradually taking shape.

Globalization of Stablecoin Regulation: The US "GENIUS Act" Passed by the Senate

Although the application scenarios in the crypto world have not undergone a qualitative leap in the past 5-10 years, the scale continues to expand. Among them, DeFi is one of the biggest highlights. However, the cryptocurrency applications that have truly achieved large-scale adoption are still concentrated in Bitcoin and stablecoin applications.

Bitcoin has gained global recognition with its astonishing price increase, becoming a representative of decentralized currency. However, from a practicality perspective, stablecoins are the cryptocurrencies that are truly widely used globally. Currently, the global market capitalization of stablecoins has reached $243.8 billion, with a trading volume of up to $33.4 trillion in the past 12 months, totaling 5.8 billion transactions, and the total number of active unique addresses has also reached 250 million.

Although the application demand and logic of stablecoins have become quite mature, their regulatory framework is still in the adjustment stage. In recent years, regulations regarding stablecoins have been continuously improved around the world. Just recently, the U.S. Senate voted to pass the "Guiding and Promoting American Stablecoin Innovation Act" (GENIUS Act ), clearing another important obstacle for global stablecoin regulation.

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

Stablecoins maintain value stability by being pegged to underlying assets such as fiat currencies and precious metals, aiming to eliminate the high volatility of cryptocurrencies and providing users with reliable settlement, storage, and investment tools. As a measure of value in the crypto market, the expansion of stablecoins reflects the growth of the entire industry. From a scale of less than $1 billion in 2017 to nearly $250 billion today, the global crypto market has also grown from less than $1 trillion to $3 trillion, gradually entering the mainstream.

This bull market can be seen as a bull market for stablecoins. After the FTX incident, the global supply of stablecoins temporarily fell from $190 billion to $120 billion, but then steadily increased, rising continuously over 18 months. This corresponds with Bitcoin's rise from a low of $17,500 to over $100,000. The main reason is that the liquidity in this bull market comes from external institutions, which typically prefer to use stablecoins as a medium when entering the market.

Currently, there are a variety of stablecoins, which can be categorized from multiple dimensions. From the control center, they can be divided into centralized and decentralized stablecoins; from fiat currency types, they can be divided into USD stablecoins and non-USD stablecoins; and they can also be further classified based on interest accrual and types of collateral. Unlike other crypto assets, stablecoins serve as a core pricing tool, with stable value, no official restrictions, and global availability, laying the foundation for their establishment as a global currency.

The application of stablecoins has spread to mainstream regions such as Europe, America, and Japan, as well as emerging markets like Brazil, India, Indonesia, Nigeria, and Turkey, especially in areas with weak financial infrastructure and severe inflation. According to a report from a payment company, the most popular use of stablecoins in the non-crypto field is as a currency alternative (69%), followed by payment for goods and services (39%) and cross-border payments (39%).

This indicates that stablecoins are shedding the label of merely being a crypto investment and are becoming an important link between the crypto market and the global economy. In the global stablecoin landscape, USD stablecoins account for 99% of the market share and are humorously referred to as the "Dollar branch".

Due to the inherent scale effect of currencies, the stablecoin market shows a significant trend of centralization. Centralized stablecoins dominate, with USDT being the absolute leader, having a market capitalization of 152 billion dollars, accounting for 62.29%. Following closely is USDC, with a market capitalization of about 60.3 billion dollars, accounting for 24.71%. Together, these two stablecoins occupy over 80% of the market share. The third place is held by the semi-centralized stablecoin USDe, which has a market capitalization of 4.9 billion dollars. Algorithmic stablecoins have declined following the Terra incident, with only the decentralized stablecoin USDS from the Sky ecosystem still ranking high, with a scale of about 3.5 billion dollars. In terms of public chain distribution, 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 "GENIUS Act" has been passed by the US Senate, a look at the global stablecoin regulatory landscape

The stablecoin issuance business is highly profitable with extremely low marginal costs, attracting numerous institutions to compete for layout. In addition to traditional financial institutions, internet giants have also entered the market. Currently, a political family project WLFI has also launched the stablecoin USD1 and has quickly integrated multiple protocols and applications.

US stablecoin regulation accelerates, the "GENIUS Act" has been passed by the Senate

As institutions rush in, regulation follows. Currently, major global regions such as the United States, the European Union, Singapore, Dubai, and Hong Kong have begun or completed the legislation of stablecoin regulatory frameworks. As a global crypto hub, the regulatory trends in the United States are receiving significant attention.

The regulation of stablecoins in the United States has undergone a process from high uncertainty to gradual clarity. Before 2025, the U.S. Congress has not enacted specific regulations for stablecoins and cryptocurrencies. Under the existing regulatory framework, the SEC, CFTC, and OCC have all defined stablecoins to vie for dominance in this emerging field. The Financial Crimes Enforcement Network regulates cryptocurrency issuers and trading entities through a licensing system, the SEC views some stablecoins as securities under the Securities Exchange Act, and the CFTC focuses on anti-fraud and anti-market manipulation aspects of stablecoins from a commodity perspective. This complex regulatory structure makes it difficult to define entities, and the diverse regulatory environment across states under the U.S. administrative system further increases compliance challenges.

Before 2025, the regulation of stablecoins was fragmented, even leading to chaos caused by the tug-of-war between regulatory agencies, bringing high uncertainty to the industry. However, with the new government taking office, the regulation of stablecoins has been accelerated.

In February of 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 "Guidance and Establishment of the U.S. National Stablecoin Innovation Act" (GENIUS Act ). The introduction of these two bills has received high-level support. At the first cryptocurrency summit held in March, the President expressed interest in stablecoins, calling them a "promising" growth model, and hopes that Congress can submit the relevant legislation to the President's office before the August recess.

On March 17, the Senate Banking Committee passed the GENIUS Act with a bipartisan support of 18 votes in favor and 6 against. On March 26, the STABLE Act was submitted in revised form and was approved by the House Financial Services Committee on April 3, to be submitted to the full House for a vote.

Although both bills target stablecoins, they focus on different aspects. The STABLE Act prioritizes federal uniform regulation, while the GENIUS Act emphasizes a dual-track system with both state and federal oversight. There are also differences between the two in terms of issuance qualifications, reserve requirements, and restrictions on algorithmic stablecoins.

During the practical process, both bills faced multiple challenges. The state government opposes the federal regulatory priority in the STABLE bill, while some industry professionals express dissatisfaction with the stringent provisions. The GENIUS bill primarily sparked discussions about compliance costs, with some arguing that the dual-track system would increase costs and overly focus on the domestic U.S. market, neglecting the needs of third-world countries.

Currently, the progress of the GENIUS bill is relatively fast. On May 9, the bill failed to pass in the Senate vote with 48 votes in favor and 49 votes against, due to some members demanding stronger anti-corruption provisions. Subsequently, the bill was revised to establish a regulatory mechanism based on scale, clarify the separation from U.S. insurance credit and government credit, and add restrictions on the participation of technology companies in stablecoins. The revised bill passed the Senate's procedural motion on the evening of May 19 with a vote result of 66 in favor and 32 against, clearing the way for final legislation.

The "GENIUS Act" was passed by the U.S. Senate, a view of the global stablecoin regulatory landscape

The passage of this bill is an important milestone in the history of cryptocurrency regulation in the United States, filling the regulatory gap for stablecoin in the U.S., clarifying regulatory entities and rules, further promoting the development of the U.S. stablecoin industry, and facilitating the mainstreaming of the cryptocurrency sector. From the perspective of U.S. national interests, this will strengthen the influence of the dollar through the deep penetration of stablecoins, enhance the crypto market's dependence on the dollar, and create new sustained demand for U.S. Treasury bonds.

Preliminary Framework for Global Stablecoin Regulation

Compared to the United States, the regulation of stablecoins in other regions started earlier. The European Union introduced the cryptocurrency market (MiCA) bill 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, prohibits algorithmic stablecoins, requires issuing institutions to maintain a 1:1 capital reserve, comply with transparency rules, and register with EU regulatory authorities.

Hong Kong is also a pioneer in the regulation of stablecoins. In December 2024, the Hong Kong government submitted the "Stablecoin Regulatory Proposal," which is expected to resume the second reading debate on May 21. Hong Kong adopts a prudent and inclusive approach, managing stablecoins through a licensing system, requiring issuers to establish in Hong Kong with sufficient financial resources and liquid assets, pay a minimum capital of no less than 25 million HKD, ensure that reserve assets are separated from other assets, and guarantee that the market value of reserve assets is not less than the face value of circulating stablecoins.

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

The "GENIUS Act" has been voted through by the US Senate, a look at the global stablecoin regulatory landscape

Overall, there are limited differences in global stablecoin regulation, with latecomers often absorbing the experiences of pioneers. Regulatory agencies in various countries generally focus on licensing to supervise issuers and have clear regulations on issuance reserves, risk isolation, anti-money laundering, and anti-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 stablecoin regulations, reflecting the increasingly important role of stablecoins in the global financial market. It not only enhances the voice of the crypto market but also lays the foundation for key applications in the crypto field. At the same time, it provides tools for 24-hour global settlement for third world countries, somewhat achieving the original intention of decentralized electronic cash.

In the development of the cryptocurrency industry, many claimed value applications may be eliminated. However, at present, at least stablecoins and Bitcoin still have meaning and value in existence.

The "GENIUS Act" was passed by the U.S. Senate, a view of the global stablecoin regulatory landscape

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SnapshotDayLaborervip
· 18h ago
Regulation should have come earlier, right?
View OriginalReply0
MEVSandwichvip
· 18h ago
Regulation should have come earlier.
View OriginalReply0
GasSavingMastervip
· 18h ago
Favourable Information for the market
View OriginalReply0
ColdWalletGuardianvip
· 18h ago
Regulation will eventually arrive.
View OriginalReply0
MentalWealthHarvestervip
· 18h ago
Regulation is the right path.
View OriginalReply0
MetaverseVagabondvip
· 18h ago
Regulation has arrived very steadily.
View OriginalReply0
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