In recent weeks, the United States has taken significant steps towards stablecoin legislation. It issued a series of related policies at an accelerating pace, which signals an impending storm. Among these, the most symbolic is the freshly unveiled draft of the STABLE Act (Stablecoin Transparency and Accountability to Foster Better Ledger Economy Act). The draft, introduced in December 2020 by three Democratic members of the House Financial Services Committee — Tlaib, García, and Lynch — was initially shelved by the Democratic administration until it was fully disclosed on March 26, 2025. It is anticipated that this bill, along with the Stable Genius Act, will play a crucial role in shaping the future regulatory framework for stablecoins in the United States. Thus, this bill is especially worthy of interpretation.

Given the pivotal role stablecoins play in the digital finance ecosystem, any movement by the US government on this issue is closely watched. What are the real motivations behind the US’s push for stablecoin legislation at this time? Is it to curb the lawlessness of stablecoins or to “weaponize” the US dollar stablecoin? What does the legalization of stablecoins mean for the digital asset industry, and what opportunities will it open? The STABLE Act draft offers us an excellent opportunity to gain insight into the US’s regulatory thinking on stablecoins. This article will provide a detailed analysis of the core elements of the draft, the underlying reasons, and its far-reaching implications for the US and global digital asset industries, while also giving Web3 practitioners confidence and direction in navigating this transformative shift.

What does the Bill say?

The bill is 72 pages long, with thousands of words written in the official legislative style of the United States, including long-winded and somewhat irrelevant sections. To spare you from reading the entire document, I have thoroughly reviewed the text and summarized the most important points.

Firstly, the bill defines what constitutes a stablecoin. Stablecoins are linked to national fiat currencies and are considered a means of payment and settlement, rather than securities or deposits. Furthermore, the bill stipulates that the issuer must be able to redeem the stablecoin for fiat currency, essentially giving stablecoins legal status as a payment tool.

Secondly, the bill specifies who can issue stablecoins. As we know, anyone can issue a stablecoin in the crypto space today, but that freedom may soon be a thing of the past. The bill suggests that only compliant stablecoin issuers, such as subsidiaries of insured deposit institutions, federally qualified non-bank issuers, or state-qualified issuers, will be allowed to issue stablecoins in the US.

The bill also outlines the specific requirements for issuance. Issuers must hold at least 1:1 reserve assets, including US dollars, demand deposits, short-term government bonds, repurchase agreements, and money market fund securities. Additionally, issuers are required to disclose reserve and redemption information regularly.

Lastly, the bill addresses what is not permitted. Firstly, the bill prohibits the issuance of algorithmic stablecoins for two years following the bill’s enactment, and long-term approval prospects are unlikely. Furthermore, unlicensed entities are prohibited from issuing stablecoins within the US. Issuers are also forbidden from paying interest or returns to stablecoin holders.

In summary, the core objective of the bill is to clarify the legal status of stablecoins, enhance consumer protection, and increase market transparency. The aim is to ensure that stablecoins continue to preserve the US dollar’s influence and dominance in the global financial system.

Why introduce stablecoin legislation now?

The core content of the bill does not deviate much from industry expectations; in fact, it simply formalizes the rules that the market had already anticipated. So the question arises: If there was already broad consensus, why does the US need to enact this legislation? The timing of this move is particularly intriguing. Why is the US choosing to push for this legislation now? Is it merely a response to financial regulatory needs, or is it a way to pave the path for the Web3 industry’s compliance? Is it part of a global struggle over the digital dollar, or is a deeper global currency war about to unfold? Let’s delve into this together.

Clarifying the Legal Status of the US Dollar Stablecoin, Accelerating the Digital Asset Industry

For a long time, the legal status of stablecoins has been uncertain, which has deterred traditional financial institutions and large institutional investors from entering the space. However, with recent legislation clarifying the legality of stablecoins, this uncertainty has been effectively eliminated, which reassures financial institutions and paves the way for their involvement.

In this context, many banks, payment institutions, and large investment funds will become more proactive in issuing and using compliant stablecoins, bringing new momentum to the Web3 industry. This not only promotes the integration of traditional finance with Web3, but also accelerates the progress and innovation of the digital finance ecosystem.

As a result, the Web3 industry will likely see a surge in capital inflows, with compliant stablecoins becoming a central infrastructure of the digital economy. This will gradually establish payment, settlement, and cross-border transactions based on compliant stablecoins as the mainstream method of payment in the digital economy, while also fostering the rapid development of DeFi and RWA, possibly even pushing these areas into the mainstream financial market.

Therefore, the goal of the US in pushing for the compliance of stablecoins is to facilitate the smoother inflow of global capital into the Web3 world, thus promoting the rapid development of digital assets and propelling the entire industry towards a more mature future.

Hedging Against the Decline of the Dollar’s Global Status, Offering a New Investment Channel to the Global Public

In recent years, the trend of de-dollarization has gradually emerged in some countries, with many economies attempting to reduce their reliance on the US dollar in international trade. In stark contrast, US dollar stablecoins have quietly risen to become a new tool for cross-border payments and international settlements and create an intriguing situation. If the US can seize this trend and actively promote the development of the US dollar stablecoin, it could serve as a crucial means of hedging against the decline of the dollar’s international status. Conversely, if regulatory delays and a lack of support allow other countries’ currencies to dominate the digital stablecoin market, global funds could further move away from the US dollar system, weakening the dollar’s international influence.

To respond to this challenge, the US has legalized the US dollar stablecoin through legislation. A legal US dollar stablecoin will continue to serve as a key tool in global payments, trade, and investment, and since it is incorporated into the regulatory system, the US can control the flow of global digital funds. When necessary, it could even use it as a weapon in financial warfare.

At the same time, compliant US dollar stablecoins offer a legitimate channel for other assets to flow into the US. This means that individuals worldwide can use dollar stablecoins to hedge against their local currency’s depreciation risks and more easily invest in US dollar assets. Since funds can bypass domestic currency controls and flow directly into US dollar assets, global capital will, in effect, become further “dollarized.” Looking ahead, compliant US dollar stablecoins are bound to evolve into the “global digital dollar.”

In summary, US dollar stablecoins are not only an important part of Web3 but also a strategic asset for the US in the global currency competition. Through strengthened regulation and the utilization of global digital asset flows, the US further consolidates the dollar’s dominant position in payments, trade, and investment. As a financial tool to maintain the dollar’s hegemony, the US dollar stablecoin plays a pivotal role globally. It enhances the US’s control over financial markets and serves as a weapon to suppress competitors and stabilize the dollar’s dominance.

Activating Innovation in DeFi and RWA Sectors

As the legitimate representation of fiat currency in the Web3 world, stablecoins are not only payment tools but also the core circulating asset in the RWA (Real-World Asset) space. The introduction of this draft indicates that stablecoins will circulate more widely, driving the deeper integration of digital assets and real-world assets. The application of stablecoins will cover DeFi, payments, cross-border settlements, and RWA, helping businesses and individuals conduct global transactions more conveniently, thereby disrupting traditional fiat payment methods.

With the implementation of stablecoin regulatory policies, institutional capital will gain more confidence in entering the digital asset space, especially in the on-chain representation and circulation of physical assets. Global asset tokenization will become simpler, and businesses will be able to directly issue on-chain bonds, real estate tokens, etc., thus enabling global investors to participate in high-quality asset investments in regions like the U.S.

More importantly, through compliant stablecoins, the U.S. is attracting global investors into its digital asset ecosystem, forming a capital siphoning effect. By leveraging the compliance of stablecoins, the U.S. has created a safer and more transparent investment channel for global investors. It attracts substantial capital inflows. This not only injects new vitality into the U.S. digital asset market but also accelerates the globalization and digitization of the U.S. economy. Ultimately, global investors, through trading, investing, and asset allocation with stablecoins, indirectly support the stability and development of the U.S. economy, thus reinforcing the U.S.’s role as the center of global capital flows.

Strengthening Control: The Compliance of Dollar Stablecoins Aligns with U.S. Interests

A core goal of the bill is to ensure that the development of stablecoins does not pose a threat to U.S. financial security. It emphasizes preventing unauthorized stablecoins from disrupting the financial markets and ensuring that the stablecoin system is firmly controlled by compliant institutions and the government. Unauthorized stablecoins could bring liquidity risks; thus, the draft sets strict issuance requirements to ensure stablecoins do not threaten the banking system.

According to the draft, stablecoin issuers must obtain licenses and comply with stringent capital reserve requirements. This approach draws from the traditional banking model and continues the core principles of historic regulations such as the 1933 Glass-Steagall Act. It aims to ensure the safety of user funds, asset segregation, and transparency, thus enhancing consumer protection.

Through this bill, the U.S. can not only effectively regulate its domestic stablecoin market but also indirectly control the global circulation of dollar-pegged stablecoins. This move helps ensure that global capital continues to operate within the U.S. dollar system, thus strengthening control over global dollar liquidity.

This bill signifies the beginning of a new era in monetary warfare, not just a simple financial regulation. The goal for the U.S. in the digital age is not only to maintain dollar hegemony but also to attract global capital to the U.S. through stablecoins, ultimately leading the next generation of the global financial system.

Impact on the Digital Asset Industry

Stablecoin payments are not only foundational infrastructure for the digital asset industry but also serve as a central element of policy. It influences the entire industry’s development. From capital inflows and industry compliance to RWA tokenization and innovation, the compliance of stablecoins has far-reaching effects. It drives the continuous maturation of the digital asset industry.

First, the compliance of stablecoin payments has attracted a significant number of institutional investors into the digital asset industry. As relevant regulations become clearer, the entry of traditional financial institutions and large capital has become more seamless. Compliant stablecoins enable more fiat currencies to be smoothly converted into digital assets, which further enhances market liquidity and lays the foundation for the widespread development of emerging fields like Web3 and DeFi. Therefore, stablecoins have become a critical component of Web3 infrastructure. It injects new vitality into the industry.

Second, the compliance of stablecoins has accelerated the maturation and regulation of the digital asset industry. As regulatory frameworks are gradually established, market transparency has significantly improved, and disordered competition and potential market risks have been effectively curbed. Clear compliance requirements not only reduce the risk of illegal activities such as money laundering but also ensure the regularity of capital flow, providing a solid foundation for the long-term healthy development of the industry.

Moreover, stablecoin compliance provides a trusted payment tool and circulating medium for the on-chain tokenization of RWAs. According to BCG, the RWA market is expected to reach $16 trillion. As compliant stablecoins become more widespread, this market will see innovative opportunities and drive the digital tokenization and global investment flows of assets, thus further propelling the globalization and cross-industry integration of the digital asset industry.

However, the compliance of stablecoins also brings some challenges. Higher compliance requirements may increase operational costs for smaller stablecoin issuers and limit entry for some emerging businesses. Additionally, strict compliance thresholds may lead to market centralization, thus inhibiting competition and possibly slowing innovation. Therefore, finding the balance between compliance and market vitality will be an important issue for the industry’s development.

Overall, stablecoin compliance provides a clear regulatory framework for the digital asset industry and drives market maturity and innovation. As compliant stablecoins become more widespread, capital liquidity and market participation will significantly increase, and emerging fields like DeFi and RWA will experience more vigorous development. In the future digital asset industry, the balance between compliance and innovation will be key to continuously driving the industry’s progress.

How Other Global Markets Are Responding

The compliance of stablecoins is not just a U.S. market demand; it is also driving a profound restructuring of the global financial system. With different policy directions across countries, the development of global digital assets will be significantly impacted. Countries have varying attitudes toward stablecoin legalization based on their financial environments, policy needs, and market challenges. Below are the trends of major markets in responding to stablecoin legalization:

European Market: The EU’s actions on stablecoin regulation are reflected in the introduction of the MiCA (Markets in Crypto-Assets) Act. This legislation is expected to align with U.S. policies on stablecoin regulation and contribute to the formation of a global regulatory framework for stablecoin payments. The implementation of the MiCA Act will not only regulate the stablecoin market but also provide stable policy support for the development of Web3. The EU’s regulatory framework will echo the U.S. policy, offering higher interoperability for cross-border payments and paving the way for the legal circulation of digital assets.

Asian Market: The Asian market has shown a proactive attitude toward the compliance of stablecoins. Regulatory authorities in regions such as Singapore, Hong Kong, and Japan have begun to gradually advance the legalization of stablecoins. The Monetary Authority of Singapore (MAS) has established a comprehensive policy framework in this field, while Hong Kong and Japan are also undergoing relevant legislation and policy trials. As U.S. policies progress, Asian countries may refer to the U.S. stablecoin regulatory framework to enhance market stability and address cross-border risks. In particular, in the competition of financial technology and digital assets, Asian regions must align with international standards to avoid falling behind in the global financial transformation.

Other Developing Countries: Some developing countries take a conservative stance on the legalization of dollar-pegged stablecoins, concerned about its impact on monetary sovereignty and the independence of their domestic monetary policies. These countries worry that the widespread use of dollar-pegged stablecoins could reduce the circulation of their national currencies and even affect central bank monetary policy formulation. However, with the U.S. taking the lead in promoting stablecoin compliance, more developing countries may gradually adopt the U.S. model. Especially in the wave of global digital currencies, these countries may find that issuing their own stablecoins or developing stablecoins following the U.S. model will help modernize their domestic digital currency systems and attract more international investment. At the same time, these countries will face the challenge of balancing monetary sovereignty with global financial integration.

Globalization Trend and Future Outlook: With the U.S. taking a leading role in the stablecoin compliance process, policies across countries will gradually align, thus promoting a unified global stablecoin payment system. Stablecoin compliance will not only provide stable payment infrastructure for the development of Web3 and DeFi but also have a profound impact on the global financial system. Cross-border payments will become more convenient, and the efficiency of global capital flow will significantly increase, which will provide more innovative financing channels and payment solutions for the global economy.

However, the legalization of stablecoins and the restructuring of the global financial system will also bring a series of challenges. Differences in regulatory standards and compliance requirements among countries will create complexities in policy coordination and mutual recognition. The economic structures, financial needs, and policy positions of different countries may lead to different implementation effects and speeds for stablecoin compliance in various regions.

Future Prospects

As the stablecoin compliance process progresses and the Web3 ecosystem rapidly develops, the digital asset industry is entering a new phase. In the future, with the influx of large institutional capital, the industry will not only face unprecedented opportunities but also profound transformations. We will witness a new landscape of capital explosion and market restructuring. Here are key trends for the future:

Big Players Entering the Market, RWA Experiences a Capital Explosion: Once the stablecoin regulatory framework is in place, traditional financial institutions will flood into the stablecoin and RWA markets. This marks the shift from the digital asset industry’s wild growth to a compliant development phase. Web3 will enter its mass adoption phase, and a new development cycle will begin.

Stablecoin Payments Set to Replace Inefficient, High-Cost Traditional Payment Methods: With the further development of stablecoins and DeFi technology, cross-border payments will experience a revolutionary breakthrough. The cost of stablecoin cross-border payments, clearing, and settlement will be significantly reduced, and efficiency will improve dramatically. Cross-border payments will become more convenient, presenting a disruptive challenge to traditional payment networks such as SWIFT and VISA.

RWA Triggers Asset Migration: Trillions of dollars worth of real-world assets will be tokenized and brought onto blockchain, and the speed of capital flow will reach unprecedented levels. This marks a global financial reconstruction driven by digital assets, a Normandy landings-style upheaval of the traditional financial system. We must prepare for this tidal wave of wealth.

Digital Dollar Hegemony Emerges, the Digital Currency War May End Before It Starts: While the world continues to debate the potential of digital currencies, the U.S. has quietly completed financial colonization through stablecoins. By legislating the digital hegemony of the U.S. dollar into the blockchain, the U.S. has provided its financial system with a digital weapon, with every blockchain transaction adding strength to the dollar empire. This is not a prediction but an ongoing reality—the digital hegemony of the U.S. dollar is rapidly consuming the global financial ecosystem, and the outcome of the new currency war has already been determined.

Unnoticed, the future has already arrived. As professionals in the Web3 space, we must maintain clarity of thought and a comprehensive knowledge base to effectively navigate and embrace this transformative shift.

Conclusion

The advancement of U.S. stablecoin legislation is set to become the primary catalyst for the digital asset industry’s growth. The legalization of stablecoins will attract significant inflows of capital and institutional participation, provide critical support to the Web3 ecosystem, and spur expansion across payments, DeFi, and RWA sectors.

As the official digital proxy for fiat currencies within the Web3 realm, the U.S. dollar-backed stablecoin will maintain its dominance in the market. Legalization will facilitate cross-border payments and accelerate global capital flows, thus disrupting traditional fiat-based payment systems and reshaping the global financial landscape. This will further cement the U.S. dollar’s hegemonic position within the global financial system.

This stablecoin revolution represents not only a financial innovation but also a fundamental restructuring of the global monetary and economic order. Under U.S. leadership, the proliferation of compliant stablecoins will drive the overhaul of conventional fiat payment systems, thus sparking a new era of currency warfare while solidifying the U.S. dollar’s dominance in the global financial ecosystem.

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