DFC

OMFIF published an article that argues that much of the ongoing criticism of stablecoins is based on persistent misconceptions rather than evidence, especially in light of the recent GENIUS Act in the US, which provides a clear legal framework for stablecoins. It rebuts the conflation of stablecoins with unstable financial products by pointing out that, like government money market funds during crises, regulated stablecoins are fully backed and resilient. The critique that stablecoins undermine the “singleness of money” is challenged by noting that even bank deposits only maintain their supposed uniformity through government intervention, whereas regulated stablecoins rely on strict reserve and insolvency protections. Finally, claims of stablecoins being primarily used for illicit activity are debunked with data showing crime-related crypto use is a tiny fraction of total transactions, especially compared to traditional finance. The article concludes that unlocking stablecoins’ potential requires clear-headed analysis and learning the right lessons from history, not ideological resistance or outdated fears. [Source: OMFIF]

A speech by Ron Morrow, Bank of Canada Executive Director of Payments, Supervision and Oversight, highlights Canada’s need to accelerate payments innovation, noting the country lags behind peers in adopting new technologies, supporting new entrants, and providing faster, cheaper payment options. While cryptocurrency use for payments remains limited due to volatility, stablecoins are gaining traction, especially for cross-border transfers, but require robust regulation to ensure safety. The Bank of Canada emphasizes the importance of balancing speed with security, referencing recent regulatory steps like the Retail Payment Activities Act, which gives the Bank new oversight of payment service providers (PSPs). The speech calls for federal-provincial cooperation, faster rollout of real-time payments (RTR), advancement in open banking, and maintaining consumer trust, positioning the Bank as both a regulator and facilitator for future innovation in payments. [Source: Bank of Canada]

The MIT Digital Currency Initiative (DCI) published a critique of the recently passed GENIUS Act, the first U.S. federal law regulating payment stablecoins. While the Act establishes redemption requirements and sets a framework for compliance, it leaves unresolved issues around maintaining stablecoin value in secondary markets, technical interoperability, and regulatory standards for security and smart contracts. The law prohibits issuers from paying interest and introduces ambiguities in its scope—especially regarding new stablecoin models and decentralized systems. Ultimately, although the GENIUS Act represents a major policy advance, unresolved policy, technical, and regulatory questions may impact both users and the future growth of stablecoins in the U.S. [Source: MIT DCI]