Globalization of Stablecoin Regulation: The Passage of the U.S. GENIUS Act Brings New Opportunities

Although the scale of the crypto world continues to grow, core applications are still concentrated in the currency field. Bitcoin, with its astonishing appreciation, has become the representative of decentralized currency, while stablecoins have achieved true large-scale application.

The current global market value of stablecoins has reached $243.8 billion, with a trading volume of $33.4 trillion over the past year, 5.8 billion transactions, and 250 million active addresses. These figures reflect that the demand and logic for the application of stablecoins have matured, but regulatory aspects are still in the adjustment phase. Recently, the U.S. Senate passed the GENIUS Act, clearing obstacles for global stablecoin regulation again.

The stablecoin market is developing rapidly, with a clear head effect.

Stablecoins provide value stability by being pegged to fiat currencies and other underlying assets, offering users a reliable settlement and value storage tool. As a measure of value in the crypto market, the expansion of stablecoins reflects the growth of the industry scale. From less than $1 billion in 2017 to nearly $250 billion today, the global crypto market has also grown from under $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 decreased, but then steadily increased in line with the rise in BTC prices. This is related to the increased liquidity from external institutions, where institutions often prefer stablecoins as a medium when entering.

Currently, there are various types of stablecoins, including centralized/decentralized, USD/non-USD, interest-bearing/non-interest-bearing, and more. Stablecoins have begun to shed the label of purely investment tools and have become an important entry point for the integration of the crypto market and the global economy. In addition to mainstream regions such as Europe, America, and Japan, emerging markets are also widely adopting stablecoins.

In terms of market share, US dollar stablecoins account for 99%. USDT and USDC together hold over 80% market share, indicating a high concentration. In the public chain aspect, Ethereum accounts for 50%, followed by Tron, Solana, and BSC.

The issuance of stablecoins is a highly profitable business, attracting traditional financial institutions such as Visa and Paypal, as well as internet companies. Recently, a certain family project also launched a stablecoin product and expanded rapidly.

US stablecoin regulation accelerates, the "GENIUS Act" passed by the Senate

As a crypto hub, the regulation of stablecoins in the United States has attracted significant attention. Previously, regulation in the U.S. was relatively fragmented, with multiple agencies such as the SEC, CFTC, and OCC involved. In February of this year, the House of Representatives and the Senate respectively introduced the STABLE Act and the GENIUS Act, aimed at improving the regulatory framework for stablecoins.

The two bills focus on slightly different aspects: STABLE emphasizes federal unified control, while GENIUS tends to favor parallel management at the state and federal levels. STABLE imposes stricter restrictions on issuing entities, requiring FDIC insurance and prohibiting algorithmic stablecoins. GENIUS, on the other hand, is relatively lenient, allowing more types of entities to issue and explore algorithmic mechanisms.

The GENIUS bill is currently progressing faster. Although the first vote on May 9 failed, the modified version was subsequently approved. The new version divides regulation based on scale and increases restrictions on technology companies. The passage of this bill clears the obstacles for stablecoin regulation in the United States, which is expected to promote industry development while also strengthening the influence of the dollar in the cryptocurrency market.

The global stablecoin regulatory framework is taking shape.

The EU earlier introduced the MiCA legislation, providing comprehensive regulation for crypto assets including stablecoins. Hong Kong also submitted the "Stablecoin Regulation Draft" last year, adopting a prudent and inclusive approach. Singapore and Dubai have also involved themselves in stablecoin regulation.

Overall, the differences in global stablecoin regulation are limited, with a generally adopted licensing system, and provisions regarding issuance reserves, risk isolation, and so on. The differences mainly lie in the categories of stablecoins allowed and the localization compliance requirements.

The advancement of stablecoin regulation reflects its increasingly prominent importance in the global financial market. This not only elevates the status of the crypto market but also provides a new option for global settlement in third-world countries, achieving the vision of decentralized electronic cash to some extent.

The future evolution of the cryptocurrency industry is still difficult to predict, but from the current perspective, stablecoins and Bitcoin still hold significant meaning and value.