New Regulatory Landscape for Stablecoins: The "GENIUS Act" Passed by the U.S. Senate

Recently, global stablecoin regulation has progressed rapidly, with the U.S. Senate passing the "Guiding and Promoting American Stablecoin Innovation Act" (GENIUS Act ), removing obstacles for global stablecoin regulation once again.

The development of stablecoins is rapid, with a prominent head effect.

Stablecoins, as value-stable crypto assets, primarily aim to eliminate the volatility of cryptocurrencies, providing users with reliable settlement, value storage, and investment tools. As a measure of value in the crypto market, each expansion of stablecoins reflects the growth of the industry scale. In 2017, the total circulation of stablecoins worldwide was less than $1 billion; today, it has approached $250 billion, while the global crypto market size has grown from less than $1 trillion to $3 trillion.

This round of the bull market can be seen as a bull market for stablecoins. After the FTX incident, the global supply of stablecoins fell from $190 billion to $120 billion, but has since steadily increased, continuing to rise over the 18 months. Meanwhile, the price of Bitcoin climbed from a low of $17,500 to over $100,000. This is mainly because the liquidity in this round of the bull market comes from external institutions, and institutions typically prefer to use stablecoins as a medium for their involvement.

There are many types of stablecoins, which can be categorized by control center, fiat currency type, whether or not they earn interest, collateral, and other dimensions. Unlike other use cases, stablecoins are essentially core pricing tools, not used for speculation, mostly without official restrictions, and can be adopted globally, laying the foundation for them to become a global currency.

Stablecoins have a wide coverage, and have begun to be used in daily transactions in emerging markets such as Brazil, India, Indonesia, Nigeria, and Turkey, especially in areas with weak financial infrastructure and serious inflation, in addition to mainstream regions like Europe, the United States, Japan, and South Korea. Data shows that the most popular use of stablecoins in non-crypto fields is as a currency alternative (69%), followed by payment for goods and services (39%) and cross-border payments (39%).

Stablecoins have begun to shed their label as crypto investments, 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. Due to the scale effect inherent in the currency itself, the strong continue to get stronger, and the concentration of leading players is a key feature in the stablecoin field. Centralized stablecoins dominate the market, with USDT emerging as the absolute leader, holding a market share of $152 billion, accounting for 62.29%. USDC ranks second, with a size of approximately $60.3 billion, accounting for 24.71%. Together, these two make up over 80% of the total market, indicating a very high concentration.

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 high-profit business, and large-scale issuance can bring marginal costs close to zero. Taking Tether, the issuer of USDT, as an example, the net profit for the entire year of 2024 reached 13.7 billion USD, with the group's net assets soaring to 20 billion USD, while the company has only 165 employees. Such high returns attract major institutions to enter the market, with traditional financial institutions like Visa and Paypal actively making arrangements, and internet companies also eager to get involved.

Regulatory Adjustment Accelerates, US Senate Passes the GENIUS Act

Institutions are rushing in, and regulation follows. Currently, places including the United States, the European Union, Singapore, Dubai, and Hong Kong have begun or improved their legislative frameworks for stablecoin regulation.

As a global cryptocurrency hub, the regulatory trends in the United States are highly scrutinized. Before 2025, the U.S. Congress has not enacted specific regulations for stablecoins and cryptocurrencies, while the SEC, CFTC, and OCC have all defined stablecoins to gain regulatory dominance. This has led to fragmented regulations and even chaos caused by the struggle among regulatory agencies, bringing high uncertainty to the industry.

In February this year, the U.S. House of Representatives and Senate respectively proposed the STABLE Act and the GENIUS Act. At the White House's first cryptocurrency summit in March, senior officials expressed hope that Congress would submit relevant legislation to the President's office before the August recess, sending a clear signal.

The STABLE and GENIUS bills have slightly different focuses, but both require a 1:1 reserve backing and monthly disclosures. STABLE emphasizes federal unified control, while GENIUS tends to build a dual-track system that runs parallel at the state and federal levels.

On the evening of May 19, the U.S. Senate passed the procedural motion for the "GENIUS Act" with a vote of 66 in favor and 32 against, clearing the way for final legislation. The passage of this bill is a significant milestone in the history of U.S. crypto assets, filling the regulatory gap for stablecoins, clarifying regulatory entities and rules, promoting the development of the U.S. stablecoin industry, and providing further support for the mainstreaming of the crypto industry.

Preliminary Formation of Global Stablecoin Regulation

Long before the United States, the European Union introduced the MiCA legislation, 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, and requires issuing institutions to maintain a 1:1 capital reserve and adhere to transparency rules.

Hong Kong is also at the forefront of stablecoin regulation. In December 2024, the Hong Kong government submitted the "Stablecoin Regulation Draft", implementing a licensing system that requires issuers to be established in Hong Kong, have sufficient financial resources and liquid assets, and ensure a 1:1 reserve.

Singapore released a stablecoin regulatory framework in 2023, while Dubai included stablecoins in the "Payment Token Service Regulations." Overall, there are limited differences in global stablecoin regulation, which focuses on licensing to regulate issuers and includes clear provisions on issuance reserves, risk isolation, anti-money laundering, and counter-terrorism. The differences mainly lie in the categories of allowed stablecoins, restrictions on issuers, and localized anti-money laundering compliance.

Major regions around the world have successively launched stablecoin regulations, reflecting that the role of stablecoins in the global financial market is transitioning from obscurity to a vibrant competition. Stablecoins are gradually becoming an important part of the global currency market, enhancing the voice of the crypto market while also adding significant value to killer applications in the crypto space. On the other hand, third world countries using stablecoins for 24/7 global settlement also partially realize the vision of decentralized electronic cash.