Stablecoin laws, particularly in the U.S., aim to regulate cryptocurrencies pegged to assets like the U.S. dollar to ensure stability, consumer protection, and financial system integrity. Here's a brief overview based on recent developments:
U.S. Legislation (GENIUS and STABLE Acts):
° The GENIUS Act (passed by the Senate in June 2025, signed into law July 2025) establishes a federal framework for dollar-pegged stablecoins, requiring issuers to be licensed by federal or state regulators, hold 100% reserves in liquid assets (e.g., U.S. dollars, Treasury bills), and comply with anti-money laundering (AML) and consumer protection rules. It clarifies stablecoins are not securities, exempting them from SEC oversight, and allows banks, fintechs, and retailers to issue them. Foreign issuers face strict requirements for U.S. market access.
° The STABLE Act (pending in the House) is similar but includes stronger consumer protections, like privacy under the Gramm-Leach-Bliley Act, and stricter custody rules. It also mandates FinCEN to tailor AML regulations for stablecoin issuers.
° Both bills aim to ensure reserves are fully backed, audited regularly, and transparent, with issuers limited to specific financial activities.
State-Level Regulation: Without comprehensive federal law until recently, states like New York (BitLicense), California (Digital Financial Assets Law), and Texas (money transmission laws) have regulated stablecoin issuance and custody, focusing on licensing, reserves, and AML compliance.
Global Context:
° The EU’s Markets in Crypto-Assets Regulation (MiCA) categorizes stablecoins as electronic money tokens or asset-referenced tokens, requiring licensing and reserves.
° Japan’s 2022 Payment Services Act regulates collateralized stablecoins, restricting issuance to banks and trust companies to prevent money laundering.
° Other regions like Hong Kong and China have stricter or limited stablecoin frameworks.
Key Issues: Critics highlight risks like inadequate consumer protections, potential conflicts of interest (e.g., exemptions for certain officials), and loopholes for foreign issuers in the GENIUS Act. Supporters argue it fosters innovation and mainstream adoption.
This framework balances innovation with oversight but faces ongoing debates over enforcement and ethical concerns.