The total market capitalization of stablecoins reached a new high of $251.7 billion on June 18, 2025, as reported by CoinDesk.

This represents a 22% increase since the beginning of the year.

The rise comes as the US Senate passes a bill to regulate stablecoins, which are digital assets typically pegged to the US dollar.

Traders often use stablecoins to transfer funds between different cryptocurrencies.

If passed, the law would require stablecoins to be backed by liquid assets and disclose their reserves monthly.

Stablecoin usage has grown sharply in recent years, with analysts expecting more growth if the bill becomes law.

Supporters say stablecoins can enable instant payments, while critics warn of risks to traditional finance.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Stablecoins have evolved from niche trading tools to mainstream financial instruments

Stablecoins have grown dramatically from a market capitalization of approximately $152 billion in September 2022 to the current record of $251.7 billion, representing a 65% increase in less than two years 1.

This rapid growth reflects their expanding utility beyond cryptocurrency trading, with stablecoins now representing over two-thirds of all cryptocurrency transactions globally 2.

Their adoption has been particularly strong in regions experiencing monetary instability, such as Latin America and Sub-Saharan Africa, where they serve as hedges against local currency devaluation 2.

Major financial institutions have recognized this potential, with 87% of global banks exploring their own stablecoin versions, and companies like JP Morgan developing proprietary stablecoin solutions 3.

The new U.S. regulatory framework addresses this mainstreaming by requiring reserve transparency and asset backing, essential features for their integration into traditional financial systems.

2️⃣ Different stablecoin types carry varying risk profiles affecting regulation

The U.S. Senate bill specifically focuses on fiat-backed stablecoins, which maintain reserves of dollars or treasuries at a 1:1 ratio, making them the most straightforward to regulate 3.

Other varieties like crypto-collateralized stablecoins (requiring over-collateralization with cryptocurrencies) and algorithmic stablecoins (using smart contracts without traditional backing) present more complex regulatory challenges 3.

Regulatory frameworks globally are increasingly distinguishing between these types, with algorithmic stablecoins facing stricter scrutiny after high-profile failures, while fiat-backed tokens must maintain liquid reserves 4.

This distinction is crucial for understanding the Senate bill’s requirements for “liquid assets such as U.S. dollars and short-term Treasury bills,” which specifically addresses the fiat-backed model rather than all stablecoin types.

3️⃣ Regulatory divergence across regions shapes global stablecoin adoption

The U.S. approach to stablecoin regulation through the GENIUS Act aims to balance innovation with consumer protection, potentially positioning America as a leader in this financial technology 5.

This contrasts with the European Union’s Markets in Crypto-Assets (MiCA) regulation, which implements more uniform and potentially restrictive rules focusing primarily on consumer protection and financial stability 4.

Meanwhile, countries experiencing currency instability like El Salvador and Argentina are seeing accelerated stablecoin adoption despite less developed regulatory frameworks, demonstrating how local economic conditions influence usage patterns 4.

Singapore and Japan have established their own frameworks for stablecoin issuance, creating a fragmented global regulatory landscape that companies must navigate 4.

This regulatory divergence creates both challenges and opportunities for stablecoin issuers, with the potential for regulatory arbitrage but also increased complexity for global operations.

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