The stablecoin market is thriving, and a global regulatory landscape is beginning to take shape.

The main applications in the current crypto world are not fundamentally different from those 5 or 10 years ago. Although the scale continues to grow and DeFi has become a highlight, the truly standout applications in the crypto market are still currency-related, mainly Bitcoin and stablecoins.

Bitcoin has gained recognition with its astonishing growth curve, becoming a representative of decentralized currency. However, from a practical perspective, stablecoins are the true crypto assets that have achieved global mass adoption. Currently, the total market capitalization of stablecoins has reached 243.8 billion USD, with a trading volume of 33.4 trillion USD over the past 12 months, 5.8 billion transactions, and 250 million active addresses.

Frequent use and large scale indicate that the demand and logic for stablecoin applications have become relatively mature, but regulation is still in the adjustment phase. In recent years, global stablecoin regulations have been continuously improved, and the U.S. Senate has just passed the GENIUS Act, which clears obstacles for global stablecoin regulation once again.

The development of stablecoins is rapid, with prominent network effects.

Stablecoins provide value stability by being pegged to fiat currencies or other underlying assets, aiming to eliminate the volatility of cryptocurrencies and provide users with reliable settlement, store of value, and investment tools. As a measure of value in the crypto market, the expansion of stablecoins reflects the growth of the industry. In 2017, the global circulation of stablecoins was less than $1 billion, and now it is close to $250 billion, while the global crypto market has grown from less than a trillion to a scale of $3 trillion.

This bull market can be seen as a stablecoin bull market. After the FTX incident, the global stablecoin supply fell from 190 billion to 120 billion USD, and has since grown steadily, continuing to rise over the 18 months. Correspondingly, BTC has climbed from the low of 17,500 USD to over 100,000 USD. The liquidity in this bull market mainly comes from external institutions, and when institutions intervene, they often choose stablecoins as the medium, thus presenting characteristics of increased external liquidity and an expanded stablecoin scale.

There are various types of stablecoins, which can be classified by control center, fiat currency type, interest-bearing or not, collateral, etc. Unlike other use cases, stablecoins serve as core pricing tools, are not used for speculation, and are rarely subject to official restrictions, allowing for global adoption and laying the foundation for becoming a global currency.

In terms of coverage, emerging markets such as Brazil, India, Indonesia, Nigeria, and Turkey, particularly those with weak financial infrastructure and severe inflation, have begun to use stablecoins in daily transactions, in addition to mainstream regions like Europe, the United States, Japan, and South Korea. A report from a payment company indicates that the most popular use of stablecoins in non-crypto fields is as a currency substitute (69%), followed by payment for goods and services (39%) and cross-border payments (39%).

Stablecoins are shedding their labels as crypto investments and becoming an important entry point for the integration of the crypto market and the global economy. In terms of market share, USD stablecoins account for 99% of the stablecoin market, and are jokingly referred to as the "Dollar Branch".

Looking in detail, due to the scale effect of currency, the strong become stronger, and the prominence of leading players is a characteristic of the stablecoin field. Centralized stablecoins dominate, with USDT's market share at $152 billion, accounting for 62.29%, and USDC at about $60.3 billion, accounting for 24.71%, together exceeding 80%. The third is the semi-centralized USDe, with a scale of $4.9 billion. Algorithmic stablecoins are declining, with only USDS at about $3.5 billion and DAI at about $4.5 billion. From the perspective of public chains, Ethereum holds a 50% share, followed by Tron ( at 13.36% ), Solana ( at 14.85% ), and BSC ( at 14.15% ).

The issuance of stablecoins is a low-risk, high-return business. Large-scale issuance can bring marginal costs close to zero, and the model of directly exchanging digital currency for cash allows the issuer to gain considerable profits. A certain issuing institution reported a net profit of $13.7 billion and net assets of $20 billion in 2024, with only 165 employees. High returns attract various parties to enter the market, with traditional financial institutions such as a certain payment company and a certain internet payment platform actively positioning themselves, and internet companies are also eager to participate. Recently, a certain political family's project launched the stablecoin USD1, which quickly expanded after its soft launch on April 12, already integrating over 10 protocols or applications.

Regulatory adjustment accelerates, the U.S. Senate passes the GENIUS Act

As institutions rush in, regulation arrives as scheduled. Currently, places like the United States, the European Union, Singapore, Dubai, and Hong Kong have begun or improved their stablecoin legislative frameworks. As a crypto hub, the United States is undoubtedly the focal point of global 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 did not enact specific regulations for stablecoins and cryptocurrencies, and various regulatory agencies defined stablecoins within existing regulations, vying for regulatory dominance. This led to fragmented regulation and even regulatory chaos, bringing high uncertainty and compliance challenges to the industry.

With the new government taking office, the regulation of stablecoins has been accelerated. In February of this year, the House of Representatives and the Senate respectively proposed the STABLE Act and the GENIUS Act. In March, the White House held its first cryptocurrency summit, where the president stated that stablecoins are a "promising" growth model and expressed hope that Congress would submit relevant legislation to the president's office before the August recess.

On March 17, the Senate Banking Committee passed the GENIUS Act. On March 26, a revised version of the STABLE Act was submitted, and on April 3, it was passed by the House Financial Services Committee. The two bills have slightly different focuses; the STABLE Act emphasizes federal unified control, while the GENIUS Act leans towards parallel management at both state and federal levels.

The GENIUS Act is progressing faster. The first Senate vote on May 9 was unsuccessful due to demands from the Democrats to strengthen anti-corruption provisions. The subsequently updated version passed a regulatory mechanism based on scale and increased restrictions on tech company participation. On May 19, the 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 a milestone in the history of cryptocurrency assets in the United States, filling the regulatory gap for stablecoins, promoting the development of the U.S. stablecoin industry, and facilitating the mainstreaming of the cryptocurrency sector. For the United States, this will strengthen the influence of the dollar through stablecoins, potentially making the crypto market an extension of dollar hegemony. It is noteworthy that the bill requires stablecoin holders to hold U.S. Treasury bonds, dollars, etc., creating new demand for U.S. debt.

Outside the United States, global stablecoin regulation has begun to take shape

Long before the United States, the European Union launched the MiCA legislation, providing a comprehensive regulatory framework for crypto assets, including stablecoins. MiCA categorizes stablecoins into asset-referenced tokens and electronic money tokens, prohibits algorithmic stablecoins, and requires issuing entities to maintain a 1:1 capital reserve, adhering to transparency rules. The European Insurance and Occupational Pensions Authority recommends implementing strict capital management for insurance companies holding crypto assets.

Hong Kong is also a leader in stablecoin regulation. In December 2024, the "Stablecoin Regulation Draft" was submitted, with plans to resume the second reading debate on May 21. Hong Kong adopts a prudent and inclusive approach, implementing a licensing system that requires issuers to be established in Hong Kong, have sufficient financial resources, and pay no less than 25 million HKD in capital to ensure a 1:1 reserve. Last July, the list of participants in the stablecoin issuer "sandbox" was announced, including several technology companies and banks.

Singapore and Dubai have also been involved in stablecoin regulation. Singapore released a regulatory framework in 2023, while Dubai included stablecoins in the "Payment Token Services Regulation."

Overall, there are limited differences in global stablecoin regulation, with latecomers often absorbing the experiences of their predecessors. Countries focus on licensing to regulate issuers, stipulating rules regarding reserves, risk isolation, anti-money laundering, and so on. The differences mainly lie in the categories of stablecoins permitted, restrictions on issuers, and localization compliance requirements.

Major regions around the world have successively launched stablecoin regulations, reflecting the evolution of stablecoins from being overlooked to becoming a focal point in global financial markets, thus becoming an important component of the currency market. This not only enhances the voice of the crypto market but also adds significant value to killer applications in the crypto space. On the other hand, third-world countries using stablecoins for global settlements has, to some extent, realized the vision of free circulation of electronic cash.