The U.S. Securities and Exchange Commission (SEC) has reportedly introduced updated staff guidance aimed at providing accounting clarity for stablecoins. It is expanding its initial crypto accounting rules, allowing certain U.S. dollar-pegged stablecoins to be treated as cash equivalents if they come with a guaranteed redemption right. This move is part of the SEC’s broader efforts, under Chair Paul Atkins, to relax previous restrictive policies and encourage traditional lenders to enter the crypto market, while the commission develops more comprehensive regulations for crypto securities.
[April 18, 2025] The Atlantic Council published a critique by Timothy Assad and others of the GENIUS Act's foreign issuer loophole , as it fails to adequately regulate offshore stablecoin issuers like Tether, the largest issuer of dollar-pegged stablecoins. While both bills require domestic stablecoin issuers to obtain licenses and comply with strict prudential requirements including full reserve backing and capital requirements, the GENIUS Act imposes virtually no restrictions on offshore-issued stablecoins that flow back into the US market, requiring only that issuers maintain basic law enforcement cooperation powers that most already possess. This creates a regulatory arbitrage that disadvantages US issuers, incentivizes companies to incorporate offshore to avoid stricter US regulations, and undermines the administration's stated goals of promoting US financial technology leadership and protecting dollar dominance. The STABLE Act attempts to address this through an eighteen-month grace period requiring offshore issuers to be subject to comparable foreign supervision, but this approach lacks clear enforcement mechanisms and still permits stablecoin use without custodial intermediary involvement, making it inadequate to close the regulatory gap.
Stablecoins thrive on regulation but is that enough?
OMFIF published a critique of current stablecoin regulation by Ousmène Mandeng, focusing particularly on the U.S. Genius Act and Europe’s MiCA regime. The article argues that while these frameworks grant stablecoins legitimacy and encourage innovation, they risk undermining regulatory consistency by allowing fragmentation and regulatory arbitrage—particularly where ease of transfer mimics bearer instruments, potentially weakening compliance safeguards and bypassing traditional oversight regimes. Mandeng stresses that the true innovation of stablecoins lies in blockchain programmability and composability, rather than speed per se, since traditional banks already process payments rapidly. Yet new regulatory approaches may distort competition if stablecoins aren’t mapped into existing regulated categories like banks or e‑money institutions, thereby violating the principle of “same risk, same activity, same regulation”. The article concludes that regulation is necessary and foundational—but unless it adheres to established regulatory logic and is harmonized across jurisdictions, it may create new systemic risks, erode compliance frameworks, and breed unintended consequences.
Project Syndicate published an article by Hélène Rey that argues that the traditional foundations of monetary power are undergoing fundamental transformation as digital technologies become the primary infrastructure for money movement. While the US dollar has maintained global supremacy for over 80 years through America's economic scale, institutional credibility, liquid financial markets, geopolitical influence, and network effects, Rey contends that data integrity is emerging as a new critical variable that will reshape the global monetary order. The article suggests that as digital assets and technologies increasingly determine how currencies function and compete, the resilience and credibility of monetary systems will depend less on traditional economic factors and more on the integrity and security of underlying technological infrastructure, with significant implications for both financial stability and geopolitical power dynamics.
President’s Working Group on Digital Asset Markets Recommendations to Strengthen American Leadership in Digital Financial Technology
U.S. President Trump's Working Group on Digital Asset Markets published its regulatory and legislative proposals aimed at strengthening America's leadership in digital financial technology. The recommendations span six key areas: creating a fit-for-purpose regulatory framework through Congressional action including Commodity Futures Trading Commission (CFTC) oversight spot markets for non-security digital assets and embracing decentralized finance (DeFi) technology; modernizing banking regulations by ending "Operation Choke Point 2.0" and clarifying permissible bank activities in custody and stablecoin issuance; strengthening the dollar's role through implementation of the GENIUS Act creating federal stablecoin regulations and banning central bank digital currencies (CBDCs); combating illicit finance by modernizing anti-money laundering rules while protecting self-custody rights; ensuring fair taxation by reducing compliance burdens and treating digital assets as a distinct asset class; and enabling immediate trading at the federal level through regulatory clarity on registration, custody, and trading requirements. https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf
Implementation of the Hong Kong stablecoin issuer regulatory regime
The Hong Kong Monetary Authority (HKMA) published various documents for the implementation of the regulatory regime for stablecoin issuers, which comes into effect on August 1, 2025. These include the finalized guidelines on supervision of licensed stablecoin issuers and on anti-money laundering and counter-financing of terrorism (AML/CFT) for licensed stablecoin issuers) plus explanatory notes on various aspects of the stablecoin issuer licensing regime and application process, and on transitional provisions for pre-existing stablecoin issuers. As of July 29, 2025, no license has been issued by the HKMA.
Digital Economy, Stablecoins, and the Global Financial System
The U.S. NBER published a paper that examines the macro-financial implications of a growing digital economy, focusing on stablecoins. The authors develop a three-region model—comprising the U.S., the rest of the world (RoW), and a decentralized “digital economy"—to study how stablecoins affect global financial markets. While stablecoins may increase the demand for safe dollar-denominated reserves, they may also serve as substitutes, reducing the global demand for traditional reserve assets. The paper finds that in the long run, the reserve demand effect dominates: the proliferation of stablecoins leads to lower US interest rates and increased US foreign borrowing and reinforcement of the U.S.'s "exorbitant privilege." . The model also shows that this expansion raises idiosyncratic consumption volatility in the US while reducing it in the RoW. Key channels of influence include both increased financial demand for digital assets and substitution of traditional services with digital alternatives.
U.S. President Donald Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act to establish a regulatory framework for “payment” stablecoin issuers. (A payment stablecoin is a non-interest-paying digital asset that is or is designed to be used as a means of payment or settlement; and the issuer of which is obligated to convert, redeem, or repurchase for a fixed amount of monetary value.) The Act will restrict issuers to subsidiaries of insured depository institutions, federal-qualified nonbank issuers, or state-qualified issuers with stablecoin issuance of $10 billion or less. Issuers must maintain reserves backing the stablecoins on an at least a one-to-one basis. Permitted reserve assets include demand deposits at insured depository institutions, short-term U.S. Treasury securities, money received under Treasury bill-backed repurchase agreements with a maturity of seven days or less, and reverse repurchase agreements with a maturity of seven days or less that are collateralized Treasury securities on an overnight basis. Issuers must also comply with all anti-money laundering regulations. The Act also prioritizes stablecoin holders’ claims in bankruptcy proceedings, and exempts payment stablecoins from securities laws.
Western Union joins stablecoin race, eyes crypto partnerships: CEO
Western Union’s CEO, Devin McGranahan, announced that the company sees stablecoins as an innovation opportunity and is considering partnerships with major crypto firms to offer stablecoin-based transfers, conversions, and digital wallet services. The company is already testing stablecoin settlements in Africa and South America and has a history of crypto-related initiatives, including past partnerships with Ripple. This renewed interest comes as the U.S. passes the GENIUS Act, which establishes clear regulations for stablecoin issuers, requiring one-to-one reserves and stricter oversight, aiming to foster competition and prevent dominance by large tech or financial firms.
Tether will register USDT in the U.S. under the GENIUS Act’s foreign issuer rules
Tether will soon offer USDT legally in the U.S. under the newly signed GENIUS Act, allowing the El Salvador-issued stablecoin to circulate domestically. CEO Paolo Ardoino confirmed Tether will comply with the foreign issuer pathway, including anti-money laundering laws and audited reserves—a first for the company—within the three-year deadline. Despite this, Tether also plans to launch a separate U.S.-specific stablecoin to meet local compliance standards, alongside USDT. The two coins will serve different audiences: USDT will primarily support immigrants sending remittances abroad, while the new U.S. stablecoin will cater to businesses and institutions requiring full regulatory alignment.
US banking associations urge OCC to postpone crypto firm applications for bank charters
Five major U.S. banking associations, including the American Bankers Association (ABA), have submitted a formal letter to the Office of the Comptroller of the Currency (OCC) expressing strong opposition to recent national trust charter applications filed by digital asset companies including National Digital TR CO (Protego Trust), Fidelity Digital Assets, First National Digital Currency Bank (Circle), and Ripple National TR Bank. The associations argue that these applications present significant policy and legal concerns because the proposed business models—primarily involving digital asset custody services for cryptocurrencies, stablecoins, and other digital assets—do not constitute the traditional fiduciary activities historically required for national trust banks under federal law (12 U.S.C. § 92a). They contend that the public portions of these applications contain insufficient detail to enable meaningful public scrutiny, with comment periods closing despite inadequate transparency, and that approving such charters would represent a fundamental departure from established OCC precedent that should require extensive public notice and comment procedures. The associations urge the OCC to postpone consideration of all applications until more complete business plan information is made publicly available, warning that approval could establish a problematic precedent allowing companies to obtain national bank charter benefits without corresponding regulatory oversight, potentially creating systemic risks to the banking system.
The MIT Digital Currency Initiative (DCI) published a blog that discusses the complexities of stablecoin redemptions and the importance of understanding the relationship between issuers, institutional clients, and retail users. It highlights that while issuers promise a 1:1 redemption, this promise is not always guaranteed due to factors such as access, solvency, and liquidity. The article explains that institutional clients have direct access to redeem tokens at face value, whereas retail users rely on intermediaries, leading to a two-tiered system. This system can be particularly punishing during times of market stress, as seen during the USDC-SVB crisis in 2023. See also: https://www.linkedin.com/posts/co-pierre-georg-841074325_11-redemptions-for-some-not-all-mit-digital-activity-7353023948927746048-b3mi/
JD.com, Ant Group push yuan stablecoins to challenge US dollar dominance
JD.com and Ant Group are reportedly pushing Chinese regulators to launch yuan-based stablecoins to boost the currency's global role and counter the US dollar's dominance. The move aims to strengthen the yuan's presence in global trade and limit the dollar's influence. The two companies are preparing to apply for stablecoin licenses in Hong Kong and Singapore, with early feedback from regulators described as positive. JD.com also plans to apply for stablecoin licenses in major countries to reduce cross-border payment costs, initially targeting business-to-business transactions but eventually perhaps extending to consumer payments. https://cointelegraph.com/news/jdcom-stablecoin-global-licensing-genius-act
Citigroup Looks to Issue Its Own Stablecoin to Smooth Payments
According to CEO Jane Fraser during a post-earnings call, Citigroup is considering issuing its own stablecoin, as part of the bank’s broader digital assets strategy, which includes reserve management and crypto custody services, aiming to strengthen its position in the digital payments space. Fraser pointed to the supportive regulatory framework under the Genius Act, which enables banks to participate more fully in digital assets.
Stablecoins Have Long Road to Mainstream Payments, Mastercard Says
According to Mastercard's chief product officer, Jorn Lambert, stablecoins have a long way to go before becoming a mainstream payment tool. While stablecoins offer promising attributes like high speed and low costs, they lack essential attributes like a seamless user experience and wide distribution to consumers. Mastercard is positioning itself as a bridge between digital assets and traditional finance, providing infrastructure to make stablecoins usable at scale by leveraging its global network and security safeguards. However, Lambert notes that stablecoin adoption faces significant hurdles, including consumer adoption and friction in online checkout experiences, making it difficult to clear in the near-term.
Stablecoin Growth - Policy Challenges and Approaches
The BIS published a paper that examines the rapid growth of stablecoins and the resulting policy challenges for financial regulators. Despite promising stability, stablecoins exhibit significant price volatility and rarely trade at exact parity, raising questions about their reliability as payment instruments. The authors identify several critical policy concerns: stablecoins' use in illicit activities due to their pseudonymous nature and cross-border mobility; potential threats to monetary sovereignty as foreign currency-denominated stablecoins could undermine domestic monetary policy effectiveness; and systemic risks arising from stablecoin issuers' substantial investments in Treasury securities, which could impact monetary policy transmission and create fire sale risks during market stress. The bulletin concludes that the traditional regulatory principle of "same risks, same regulation" has limited applicability to stablecoins, necessitating bespoke regulatory frameworks that address their unique characteristics while leveraging blockchain traceability for enhanced oversight, particularly at interfaces with the regulated financial system.
Decrypting Crypto: How to Estimate International Stablecoin Flows
The IMF published the results of a study that leveraged a combination of AI and machine learning to estimate the geographic distribution of international stablecoin flows. Analyzing $2 trillion in stablecoin transactions during 2024, it finds that stablecoin flows are highest in absolute terms in North America ($633 billion) and Asia-Pacific ($519 billion). However, the most significant flows relative to GDP were in Latin America/Caribbean (7.7%) and Africa/Middle East (6.7%). Additionally, intraregional flows in these two regions are notably lower, accounting for 14% and 12% of total flows originating from the region, compared to, for example, 34% in North America. This suggests that stablecoin use in Africa and Latin America is predominantly international, possibly driven by use cases such as remittances. The study also establishes a correlation between net stablecoin inflows into regions and the relative weakness of domestic currencies against the U.S. dollar, either suggesting that stablecoins serve as a mechanism to fulfill global demand for dollar-based assets for people that seek a hedge against currency depreciation, or that stablecoin flows could possibly be sizable enough to drive exchange rate
dynamics.
Galaxy Digital published an examination of how stablecoins and decentralized finance (DeFi) are fundamentally restructuring global credit intermediation, driven by three key trends: adoption as savings instruments in emerging markets with weak currencies, use as efficient cross-border payment rails competing with traditional systems like SWIFT, and access to above-market yields through DeFi protocols. The analysis argues that this growth will systematically drain deposits from traditional banks—particularly regional and emerging market institutions—while concentrating assets in US Treasury securities and major US financial institutions, effectively creating enforced credit contraction in certain regions while over-allocating credit to the US government. Galaxy Digital contends this represents a paradigm shift with stablecoin issuers emerging as significant players in government debt markets and potentially new credit intermediaries, ultimately creating an "efficient frontier of digital dollar investments" that could reshape monetary policy, financial stability, and the architecture of global finance.
Stablecoins are trending, but what frictions and risks are getting overlooked?
The Atlantic Council published an article by Ashley Lannquist that discusses the growing popularity of stablecoins, while highlighting the risks and frictions. The article points out regulatory gaps, potential financial instability, and the lack of transparency in reserve backing, which could lead to liquidity crises if many users redeem stablecoins simultaneously. It also examines geopolitical concerns, such as the use of stablecoins to evade sanctions, and operational risks like cybersecurity threats. Also, despite their utility in cross-border payments and decentralized finance (DeFi), stablecoins' value for everyday payments remains to be seen.
Latest stablecoin depeg spotlights need for better attestation
Falcon USD (USDf), a crypto-backed, overcollateralized stablecoin issued by Falcon Finance, a subsidiary of DWF Labs experienced a depegging event, with its price dropping as low as $0.98 and briefly to $0.9432 before recovering to around $0.995. This incident has raised concerns about the transparency and quality of the collateral backing USDf, as well as the potential risk of a broader stablecoin crisis reminiscent of the Terra (LUNA) collapse. Critics and risk consultants have pointed to a lack of clarity regarding the composition and liquidity of USDf’s reserves, and have questioned its inclusion as collateral on DeFi lending platforms. In response to the depegging and growing scrutiny, DWF Labs’ CEO has pledged to provide a more detailed breakdown of the assets backing USDf.
Deutsche Bank and DWS secure license for euro-denominated stablecoin
The joint venture AllUnity, formed by banking giant Deutsche Bank and asset management firm DWS, obtained authorization from Germany’s Federal Financial Supervisory Authority (BaFin) to launch a euro-denominated stablecoin. AllUnity was granted an Electronic Money Institution (EMI) license, paving the way for the debut of EURAU, a euro-backed stablecoin fully compliant with the Markets in Crypto-Assets Regulation (MiCA) framework. EURAU will feature a transparent proof-of-reserve system and regular financial reporting. The stablecoin is specifically designed to integrate into the operational flows of regulated institutions, fintech platforms, and corporate treasuries.
[March 2025] Ubyx published a whitepaper on its proposed clearing system designed to enable universal redemption of stablecoins at par value through traditional financial institutions, thereby solving the "many-to-many" network problem that currently limits stablecoin adoption. The system would allow users to deposit any participating stablecoin into their existing bank or fintech accounts at full value, transforming stablecoins from specialized crypto assets into cash equivalents under accounting standards (IAS7) and enabling their use as general-purpose digital money. Ubyx proposes to create a mutualized acceptance network connecting stablecoin issuers, receiving institutions, settlement banks, and scaling partners through standardized APIs and a comprehensive rulebook, while maintaining peer-to-peer transaction capabilities and regulatory compliance through multiple layers of KYC, AML, and fraud prevention checks. The system would begin as a centralized platform but transition toward progressive decentralization through a DAO governance structure, with economic incentives aligned across all participants through transaction fees, redemption revenues, and the Ubyx token ecosystem, ultimately aiming to usher in a "stablecoin epoch" where digital currencies achieve ubiquity as mainstream payment methods. https://github.com/UbyxRules/Ubyx-Rulebook
Building tomorrow’s markets: the digitalisation of finance
The Bank of England's (BoE's) Financial Market Infrastructure Executive Director, Sasha Mills, outlined the central bank's vision for digitalizing wholesale financial markets through tokenization of assets and smart contracts on distributed ledger technology (DLT). She pointed to the Bank's updated thinking on settlement assets, particularly allowing systemic stablecoins to be backed by remunerated high quality liquid assets (HQLAs) rather than solely unremunerated central bank deposits. Ms. Mills highlighted progress through the Digital Securities Sandbox and the UK Government's Digital Gilt pilot (DIGIT), while outlining plans for enhanced access to the upgraded real time gross settlement (RTGS) service and exploring synchronization interfaces to enable conditional settlement across different ledger systems. She emphasized that the future financial system will likely be a "mixed ecosystem" where new and old structures coexist, requiring interoperability between different systems, and called for moving beyond theoretical discussions to practical implementation of these digital foundations.Ms. Mills also floated potential holding limits for systemic stablecoins, likely be in the region of £10,000 to £20,000 for individuals and £10 million for businesses.
Central Bank of Bahrain Issues Framework for Regulating Stablecoins
The Central Bank of Bahrain (CBB) introduced a framework for licensing and regulating stablecoin issuers. It mandates that any entity seeking to issue, mint, burn, custody, or offer stablecoins from within Bahrain must be licensed and obtain CBB approval—unregulated activity is prohibited. Licensed stablecoin issuers will be permitted to issue single currency stablecoins backed by Bahraini Dinar (BHD), United States Dollar (USD), or any other fiat currency acceptable by the CBB, with a strict 1:1 high-quality liquid reserve requirement (cash and demand deposits held at banks with at least an AA‑ credit rating or its equivalent, debt securities issued by the CBB, or repurchase agreements (repos) backed by short‑term government money‑market instruments). The module also allows yield-bearing variants—returns generated solely from interest or Sharia-compliant rewards on reserve assets—but caps issuers from offering interest tied to user balances. https://www.cbb.gov.bh/wp-content/uploads/2024/10/Stablecoin-Issuance-and-Offering-Module.pdf
How XRP could undermine Ripple's move for national trust bank charter
Ripple Labs has applied for a national trust bank charter from the Office of the Comptroller of the Currency (OCC) to potentially bring its RLUSD stablecoin under federal regulation as part of a dual-track strategy alongside its existing state-regulated path through Standard Custody & Trust. The application represents a hedging strategy, as federal oversight would provide institutional credibility and improve chances of obtaining a Federal Reserve master account, which would enable direct payments and potentially allow stablecoin reserves to be held at the central bank. However, Ripple faces a significant regulatory challenge: under Basel III banking rules, its substantial XRP cryptocurrency holdings would require dollar-for-dollar capital reserves, while those same XRP holdings cannot be counted as qualifying capital because they are classified as intangible assets—creating a potentially prohibitive capital adequacy problem that could undermine the charter application unless addressed through restructuring, such as routing the charter through a subsidiary like Standard Custody rather than directly through Ripple Labs.
Stripe will help Shopify merchants to accept stablecoin payments
[June 12, 2025] Stripe will form a deeper partnership with Shopify that will enable millions of Shopify merchants across 34 countries to accept stablecoin payments in USDC (USD Coin). Customers will be able to pay with USDC on the Base blockchain using their preferred crypto wallet, while merchants can choose to receive payments in their local currency deposited to their bank account or transfer funds directly as USDC to an external wallet. Stripe Connect platforms in the U.S. will also be able to enable stablecoin payments for their users.
Fiserv Launches New FIUSD Stablecoin for Financial Institutions
[June 23, 2025] Fiserv plans to launch a new digital asset platform featuring the FIUSD stablecoin, that will leverage infrastructure from Paxos and Circle, operate on the Solana blockchain, and be available at no additional cost to Fiserv's approximately 10,000 financial institution clients and six million merchant locations that process 90 billion transactions annually. FIUSD is designed to provide banks with 24/7 settlement capabilities and streamlined processes while maintaining full control over customer experience through easy integration with existing Fiserv platforms like Experience Digital and Commercial Center, with built-in compliance features including fraud monitoring and risk management.
Societe Generale-FORGE to Launch a USD Denominated Stablecoin
(June 10, 2025] Societe Generale-FORGE announced the launch of USD CoinVertible (USDCV), a USD-denominated stablecoin that will be deployed on both Ethereum and Solana public blockchains, with The Bank of New York Mellon Corporation (BNY) serving as reserve custodian. This marks SG-FORGE's second stablecoin after the EUR CoinVertible launched in April 2023, offering institutional, corporate, and retail investors 24/7 instant conversion between fiat currencies and stablecoins for activities like crypto trading, cross-border payments, and cash management. Both stablecoins are fully compliant with European MiCA regulation as Electronic-Money Tokens, with SG-FORGE licensed as an Electronic Money Institution by French regulators, and trading of USDCV is expected to begin in early July 2025, though neither stablecoin is available to US persons.
Ripple Follows Circle in Bid for US Banking License
Ripple has filed an application with the Office of the Comptroller of the Currency (OCC) to obtain a national bank charter, following in the footsteps of Circle's similar application just two days earlier. The application comes as stablecoin issuers prepare for expected regulatory requirements under the GENIUS Act legislation, which recently passed the Senate. Ripple has also filed for a Federal Reserve master account through its Standard Custody subsidiary, which would allow it to hold RLUSD stablecoin reserves directly with the Fed and provide more flexibility for processing digital assets. See also: https://x.com/bgarlinghouse/status/1940454339207667941.
