Stablecoins have quickly become a popular way to transfer money in the digital world. In the second quarter of 2024, a16z report says, stablecoins were used for $8.5 trillion in transactions across 1.1 billion transfers. It is more than double the amount processed by Visa during the same period.
As of February 2025, the stablecoins market cap stands at $223 billion, with USDT ranking third at $139.5 billion, following Bitcoin ($1.92 trillion) and Ethereum ($316.2 billion).
Of course, this growth has also caught the attention of bad actors. According to UNODC, stablecoins like USDT are often the preferred crypto for organized crime in East and Southeast Asia, making them a common tool for illicit activities in the region. Europol investigators have found that in investment fraud cases, Bitcoin is often converted to stablecoins, especially USDT.
Compared to other cryptocurrencies, stablecoins promise stability, but without proper regulation, that promise can quickly break down. The infamous Terra/LUNA $40 billion crash highlighted how vulnerable these assets can be when things go wrong. The collapse triggered a chain reaction in the crypto market, causing Bitcoin’s price to drop and speeding up the loss of $300 billion in value from the entire crypto economy.
It is hard to say if regulation could have stopped the collapse, but clear, consistent regulations could ensure these assets are properly backed and less likely to crash.
Countries worldwide are grappling with how to regulate stablecoins, as they don’t neatly fit into traditional categories like securities or commodities. Some are developing new, specific regulations, while others seek to apply existing financial laws to stablecoins. This results in a patchwork of approaches.
The European Securities and Markets Authority (ESMA) reinforced that stablecoins—classified as Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs)—must follow the MiCA regulation. Crypto-asset service providers (CASPs) running trading platforms must have already delisted non-compliant stablecoins by the end of January 2025, with full enforcement by national regulators by the end of Q1 2025.
What this means for CASPs, investors, and national regulators
The Financial Conduct Authority (FCA) began shaping the rules in February 2024, consulting on stablecoin issuance and custody. More discussions are expected in early 2025, focusing on how stablecoins should be backed and redeemed.
A 2024 FCA discussion paper lays the groundwork for a legal framework for fiat-backed stablecoins, particularly for payments. The UK Treasury plans to define these stablecoins in law, requiring them to be fully backed by fiat currency. Amendments in payments legislation are possible to enable retail stablecoin payments. Additionally, the paper explores the possibility of allowing some overseas stablecoins for UK-based payments.
Regulators collaborate to ensure consistency in legislation and prevent regulatory gaps. The FCA and Bank of England are exploring how stablecoins fit into systemic payment systems, while the Prudential Regulation Authority (PRA) is assessing risks related to new financial products in its ‘Dear CEO’ letter.
Stablecoins are getting serious attention from US policymakers in 2025. President Trump’s recent Executive Order on Digital Financial Technology (January 23, 2025) highlights their role in strengthening the US dollar and supports the development of legally backed dollar stablecoins. No later than July 22, 2025, the working group must submit a report to the President with recommendations for new laws and regulations.
Industry experts expect major regulatory moves this year, especially since the stablecoin bill nearly passed in the last Congressional session. With their growing use in the US, new rules seem more likely than ever.
The US approach to crypto regulation has become a recurring theme in discussions about institutional adoption on the Digital Asset Forum (DAF). This approach is influencing global market sentiment and institutional confidence.
“The future of digital assets is a mix of optimism and uncertainty. While institutional adoption is growing, the US policy remains unclear. A key concern is the potential for a Bitcoin reserve. If a major country goes ‘all in,’ it could trigger a supply shock and spark global competition for crypto reserves,” Lex Fisun, CEO and co-founder of Global Ledger commented.
He became a featured speaker for the panel “Stablecoins in the Spotlight: Balancing Scalability, Regulation, and Adoption.” At the forum, the GL team discussed the future of blockchain and digital assets.
Here are key takeaways from discussions during the forum:
Recognizing all the challenges the industry faces, Global Ledger steps in with its AML and compliance solutions: