Story perspectives

GENIUS Act Regulates Stablecoins Amid $6.6 Trillion Concerns

9/3/2025

Summary

US Regulates Stablecoins

The US enacted the GENIUS Act on July 18, 2025, regulating stablecoins with full backing requirements.
Stablecoins, such as Tether and USD Coin, provide lower-risk options compared to traditional cryptocurrencies.
There are concerns that stablecoins may divert up to $6.6 trillion from bank deposits, potentially raising borrowing costs.

Summary

Asia Advocates Stablecoins

South Korea's FSC Chair nominee Lee Eog-weon advocates for a national blockchain for a won stablecoin, prioritizing bank issuance.
In Hong Kong, firms are applying for stablecoin licenses under strict HKMA regulations, limited to established institutions.
China's central bank governor noted stablecoins' role in cross-border payments, with JD.com and Ant Group promoting offshore yuan-backed options.
Potential issuers in Hong Kong are cautious about compliance costs, delaying license applications.
The Bitcoin Asia summit highlighted China's large crypto user base, signaling increased interest in stablecoins and digital assets.

History

Historical Context

The launch of Tether in 2014 marked a significant development in cryptocurrency, prompting regulatory scrutiny due to its potential to divert $6.6 trillion from traditional banks. This shift has led to legislative responses, such as the US GENIUS Act, as countries like South Korea and China explore stablecoin frameworks to enhance monetary control and facilitate cross-border transactions.

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US Regulates Stablecoins

The US enacted the GENIUS Act on July 18, 2025, regulating stablecoins with full backing requirements.
Stablecoins, such as Tether and USD Coin, provide lower-risk options compared to traditional cryptocurrencies.
There are concerns that stablecoins may divert up to $6.6 trillion from bank deposits, potentially raising borrowing costs.

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