Globalization of Stablecoin Regulation: U.S. GENIUS Act Passed by the Senate

From an application perspective, the current crypto world is fundamentally no different from 5-10 years ago. Although the scale continues to grow and DeFi has become a major highlight, the products that are truly widely used in the crypto market are still mainly currency-related products, namely Bitcoin and stablecoins.

Although these two cryptocurrencies are both mainstream, their development paths are completely different. Bitcoin has become the representative of decentralized currency due to its astonishing price increase, while from a practical perspective, stablecoins are the real crypto assets that have achieved global mass adoption.

The global stablecoin market capitalization has reached 243.8 billion USD. According to payment data, the total transaction volume of stablecoins in the past year has reached 33.4 trillion USD, with 5.8 billion transactions and 250 million active addresses. These data indicate that the application demand and logic of stablecoins have become quite mature.

However, the regulation of stablecoins is still in the adjustment phase. In recent years, countries around the world have been continuously improving their stablecoin regulatory frameworks. The U.S. Senate recently passed the "Guiding and Advancing American Stablecoin Innovation Act" (GENIUS Act ), clearing obstacles for stablecoin regulation once again.

Rapid Development of Stablecoins, Significant Head Effect

Stablecoins maintain price stability by being pegged to assets such as fiat currencies and precious metals, providing users with reliable settlement, storage, and investment tools. As a measure of value in the crypto market, the expansion of stablecoin supply reflects the growth of the industry. From less than $1 billion in 2017, the total amount of stablecoins has approached $250 billion, while the crypto market has grown from less than $1 trillion to a scale of $3 trillion.

This round of the bull market can be seen as a bull market for stablecoins. After the FTX incident, the supply of stablecoins temporarily fell to 120 billion USD, but has since continued to grow for 18 months, corresponding with Bitcoin's rise from 17,500 USD to over 100,000 USD. This is mainly due to the inflow of external institutional funds, which typically choose stablecoins as a medium.

There are various types of stablecoins, which can be divided into centralized and decentralized, USD and non-USD, interest-bearing and non-interest-bearing, among other categories. Unlike other crypto assets, stablecoins serve as a core pricing tool, are not used for speculation, and have no official restrictions, making them globally available and laying the foundation for becoming a global currency.

In terms of coverage, emerging markets such as Brazil, India, Indonesia, Nigeria, and Turkey have also started using stablecoins in daily transactions, in addition to mainstream regions like Europe, America, and Japan. According to a report by a payment company, the most popular use of stablecoins in non-crypto areas is as a currency substitute (69%), for payment of goods and services (39%), and for cross-border payments (39%).

Stablecoins are gradually shedding the label of being purely cryptocurrency investment tools, becoming an important link between the crypto market and the global economy. In terms of market share, USD stablecoins account for 99% of the scale. Due to scale effects, the stablecoin market exhibits characteristics of the strong getting stronger and concentration at the top. Currently, USDT has a market value of $152 billion, accounting for 62.29%; USDC has a market value of $60.3 billion, accounting for 24.71%. These two centralized stablecoins together hold over 80% of the market share.

From the perspective of public chains, Ethereum occupies 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 model of directly exchanging digital currency for cash allows issuers to gain enormous risk-free returns. A leading stablecoin issuer achieved a net profit of as much as $13.7 billion in 2024, with net assets reaching $20 billion, while the team consists of only 165 people. Such high returns have attracted numerous institutions to enter the market, including traditional financial institutions, payment giants, and internet companies.

Regulatory Acceleration and Adaptation, U.S. Senate Passes the GENIUS Act

As institutions compete to establish themselves, regulation follows suit. Currently, the United States, European Union, Singapore, Dubai, Hong Kong, and other regions have begun or are improving legislation related to stablecoins. As a crypto hub, the regulatory trends in the United States are the most noteworthy.

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 establish specific regulations for stablecoins, and agencies such as the SEC, CFTC, and OCC each defined and regulated stablecoins independently. This fragmented regulation has led to high uncertainty and compliance challenges.

With the new government taking office, the regulation of stablecoins has been accelerated. In February, the U.S. House of Representatives and Senate respectively proposed the STABLE Act and the GENIUS Act. In March, a certain political figure stated at the White House Crypto Summit that they hope to submit the relevant legislation to the President's office before August.

The STABLE Act and the GENIUS Act are both legislation for stablecoins, but they have slightly different focuses. The STABLE Act emphasizes federal unified control, while the GENIUS Act advocates for a dual-track system with both state and federal oversight. Both require a 1:1 reserve and monthly disclosures, but there are differences in issuance qualifications, algorithmic stablecoins, interest payments, and other aspects.

The GENIUS bill is currently progressing faster. On May 9, the bill failed to pass its first Senate vote. The amended version includes provisions such as scaled regulatory measures, and it ultimately passed the Senate procedural motion on May 19 with a vote of 66 in favor and 32 against. The next step will be the full Senate debate and amendments, followed by consideration in the House of Representatives. Given the lower threshold in the House, the likelihood of this bill becoming formal law is very high.

The passage of the GENIUS Act is an important milestone in the regulation of crypto assets in the United States, which will clarify the regulatory subjects and rules for stablecoins, promote the development of the U.S. stablecoin industry, and facilitate the mainstreaming of the crypto industry. At the same time, this will also strengthen the influence of the U.S. dollar through stablecoins, consolidating the dollar's dominant position in both centralized and decentralized financial systems.

The Global Stablecoin Regulatory Landscape is Taking Shape

Compared to the United States, stablecoin regulation in regions like the European Union started earlier. The EU introduced the MiCA legislation as early as before 2025, providing a comprehensive regulatory framework for crypto assets, including stablecoins. MiCA categorizes stablecoins into asset-referenced tokens and electronic money tokens, similarly prohibiting algorithmic stablecoins, and requires issuing institutions to maintain a 1:1 reserve and comply with transparency rules.

Hong Kong is also at the forefront of stablecoin regulation. The "Stablecoin Regulation Draft" submitted in December 2024 adopts a licensing system, requiring issuers to establish themselves in Hong Kong, have sufficient financial strength, and maintain a 1:1 reserve. Singapore and Dubai have also introduced relevant regulatory provisions.

Overall, there are limited differences in global stablecoin regulation, and latecomers often show signs of learning from the experiences of earlier ones. Countries generally adopt a licensing system and make regulations regarding issuance reserves, risk isolation, anti-money laundering, and so on. The differences mainly lie in the categories of stablecoins allowed, restrictions on issuers, and localization compliance requirements.

Major regions around the world have successively launched stablecoin regulations, reflecting that stablecoins are becoming an important component of the global currency market, enhancing the voice of the cryptocurrency market. At the same time, this also provides developing countries with a tool for 24-hour global settlement, to some extent realizing the initial vision of Bitcoin as free electronic cash.