Source: \u00a9 2025 Digital & Analogue\u00a0Partners<\/p>\n
As stablecoins gain prominence worldwide, two foundational questions emerge:<\/em><\/p>\n Will stablecoins evolve into self-contained monetary systems operated by Big Tech\u200a\u2014\u200aor remain tightly regulated extensions of sovereign currencies, with issuers functioning as licensed franchisees of central\u00a0banks?<\/em>Should stablecoins be seen merely as private payments innovation, or as emerging challenges to monetary sovereignty?<\/em><\/p>\n In this article, we attempt to answer these questions by comparing two recent regulatory frameworks\u200a\u2014\u200athe Guiding and Establishing National Innovation in US Stablecoins (GENIUS) Act in the United States and the Markets in Crypto-Assets (MiCA) Regulation in the European Union\u200a\u2014\u200aand by contrasting them with China\u2019s central bank digital currency (CBDC) initiatives. For a comprehensive overview of global crypto regulations, readers can refer to<\/em> cryptomap.io<\/em><\/a>, which provides an interactive map detailing the regulatory landscape across various jurisdictions. By examining these frameworks, we aim to understand not only how stablecoins will be regulated, but also who will control\u00a0them.<\/em><\/p>\n To understand the stakes, we must first clarify what is at\u00a0issue.<\/p>\n Money, in its traditional form, is a state-supported instrument.<\/strong> It fulfils three main functions: a medium of exchange, a store of value, and a unit of account. Importantly, sovereign money is issued and guaranteed by a central authority\u200a\u2014\u200atypically a central bank\u200a\u2014\u200aand holds legal tender status within a specified jurisdiction.<\/p>\n Stablecoins<\/strong>, by contrast, are digitally issued tokens that aim to replicate the price stability of fiat currencies, usually through reserve backing. Issued by private entities and used on blockchain networks, they are designed to function like money\u200a\u2014\u200aas a medium of exchange, store of value, and unit of account\u200a\u2014\u200abut they lack legal tender status and are not issued by central banks. Their monetary role is built on market trust, not official legal decree. They operate under the promise\u200a\u2014\u200anot the guarantee\u200a\u2014\u200aof value parity with sovereign currency.<\/p>\n This functional similarity to money, without the institutional safeguards of central banking, lies at the heart of the current debate on regulation.<\/p>\n The United States\u2019 legislative trajectory reflects a multi-year negotiation over how to regulate stablecoins without stifling innovation. It begins with the STABLE Act<\/a> (2020) and culminates in the GENIUS Act\u00a0(2025).<\/p>\n The legislative debate over stablecoins began in earnest in December 2020 with the introduction of the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act<\/a> by Representatives Rashida Tlaib, Stephen Lynch, and Jes\u00fas \u201cChuy\u201d Garc\u00eda. The bill was a direct response to the launch of Facebook\u2019s Libra project and a surge in unregulated stablecoins.<\/p>\n The STABLE Act sought to plug stablecoins into the banking framework by:<\/p>\n Requiring stablecoin issuers to obtain a full banking charter, i.e., a legal document that authorises a financial institution to operate as a bank, and receive regulatory approval six months before\u00a0launch.Mandating that issuers hold either Federal Deposit Insurance Corporation (FDIC) insurance or maintain equivalent reserves at the Federal Reserve to back the\u00a0tokens.Treating stablecoin issuance as functionally equivalent to deposit creation, thereby invoking traditional bank-like regulation.<\/p>\n Although this bill never advanced, it set the tone for the coming debates: stablecoins must not become \u201cshadow money\u201d operating outside the banking system. Representative Stephen Lynch at the time stated<\/a>: \u201cStablecoins present a new and innovative way for consumers to use their money, and I believe this technology can be used to make financial transactions more efficient while potentially increasing financial inclusion. We cannot outsource the issuance of American currency to private entities, and the STABLE Act guarantees that our regulators will be able to effectively oversee the application of this new technology.\u201d<\/p>\n In the following years, stablecoin legislation became a bipartisan (if occasionally contentious) endeavour. During 2021\u20132022, Senator Pat Toomey introduced the Stablecoin Transparency of Reserves and Uniform Safe Transactions Act<\/a> (Stablecoin TRUST Act), which proposed allowing stablecoin issuers to operate under a national charter\u200a\u2014\u200athat is, a federal banking licence issued by the Office of the Comptroller of the Currency (OCC). Meanwhile, the President\u2019s Working Group on Financial Markets, in a 2021 report<\/a>, recommended that Congress go further by requiring all stablecoin issuers to be insured depository institutions, effectively integrating them into the traditional banking\u00a0system.<\/p>\n Despite these proposals, Congress did not pass any stablecoin-specific legislation. The collapse<\/a> of TerraUSD in 2022, an algorithmic stablecoin that lost its peg, served as a wake-up call about design risks and regulatory gaps.<\/p>\n By 2023, the House Financial Services Committee, chaired by Republican Patrick McHenry and Democrat Ranking Member Maxine Waters, resumed bipartisan negotiations. Their effort culminated in the Clarity for Payment Stablecoins Act of 2023<\/a>, which passed the House in\u00a02024.<\/p>\n This bill retained core STABLE Act principles but introduced flexibility:<\/p>\n Allowed both bank and nonbank issuers\u200a\u2014\u200aprovided nonbanks were federally approved and under Federal Reserve oversight.Mandated 1:1 reserve backing and redemption at\u00a0par.Explicitly banned Big Tech firms from owning or controlling stablecoin issuers to preserve the separation of banking and commerce.<\/p>\n Moreover, the Clarity Act proposed a temporary moratorium or regulatory study of algorithmic models rather than an immediate ban. US lawmakers opted for a more cautious route, while the UAE responded to the TerraUSD collapse by banning algorithmic stablecoins outright.<\/p>\n Despite House passage, the Senate\u200a\u2014\u200athen controlled by Democrats\u200a\u2014\u200adid not act on the bill, delaying comprehensive legislation once\u00a0again.<\/p>\n Throughout 2023\u20132025, external regulatory voices continued to influence the\u00a0debate.<\/p>\n In June 2023, Powell warned<\/a> that the absence of a framework posed systemic risks and later supported Congressional efforts to legislate stablecoin regulation.<\/p>\n The Financial Stability Oversight Council (FSOC) in its 2024 Annual Report<\/a> stated that \u201cstablecoins continue to represent a potential risk to financial stability because they are acutely vulnerable to runs absent appropriate risk management standards\u201d. It emphasised the need for comprehensive federal oversight The FSOC also highlighted that the stablecoin market is heavily concentrated, with a single issuer\u200a\u2014\u200aTether\u200a\u2014\u200acontrolling a large share (about 70%) of the market, and warned that the failure of such a dominant offshore issuer could disrupt both the crypto-asset market and the broader financial system.<\/p>\n The Trump administration (2025) embraced<\/a> stablecoin regulation as a pillar of its \u201ccrypto-positive\u201d agenda, establishing a Working Group on Digital Asset Markets and pushing for swift passage of a stablecoin law.<\/p>\n The culmination of years of legislative effort came in April 2025, when Senator Bill Hagerty introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act<\/a>. The bill passed the Senate on 17 June 2025 by a bipartisan vote of 68\u201330, marking the first time a comprehensive crypto asset bill had cleared a chamber of Congress. The GENIUS Act reflects a carefully negotiated middle ground between the strict banking-only model of the STABLE Act and the more flexible, industry-friendly proposals that had circulated in preceding years.<\/p>\n The GENIUS Act introduces a new regulatory category: \u201cfederal qualified issuers\u201d, which allows nonbank entities to issue stablecoins under direct Federal Reserve supervision. It also formally recognises \u201cstate-qualified issuers\u201d, enabling firms operating under state-level regimes to issue stablecoins, provided their outstanding circulation remains below $10 billion. All issuers are required to maintain one-to-one reserve backing, provide monthly attestations of reserves, and ensure clear redemption rights for token holders. In line with broader efforts to integrate stablecoins into the financial system, issuers are brought under Bank Secrecy Act (BSA)<\/a> compliance, which subjects them to anti-money laundering (AML) and know-your-customer (KYC) obligations.<\/p>\n Crucially, the Act provides long-awaited legal clarity by explicitly stating that permitted stablecoins are not to be treated as \u201csecurities.\u201d This exemption places such instruments outside the regulatory scope of the Securities and Exchange Commission (SEC), reinforcing the view that these tokens function as payment tools or stores of value rather than investment products. Primary federal oversight, therefore, falls to prudential regulators and the US Treasury, further underscoring the treatment of stablecoins as analogous to traditional currency or e-money, rather than speculative assets.<\/p>\n This interpretation aligns with a recent SEC statement<\/a> suggesting that certain fiat-referenced stablecoins may fall outside the securities framework if they meet specific criteria. To qualify, a stablecoin must:<\/p>\n Be pegged 1:1 to the US\u00a0dollar;Be redeemable at par for USD at any\u00a0time;Be fully backed by low-risk, highly liquid reserves; andBe marketed solely as a means of payment, not as an investment.<\/p>\n In such cases, the token would not meet the Howey test for an \u201cinvestment contract.\u201d The GENIUS Act formalises this approach, providing greater legal certainty for issuers and market participants.<\/p>\n A key and potentially far-reaching aspect of the GENIUS Act is its stance on foreign issuers. It essentially gives the US Treasury a gatekeeping role: overseas stablecoin issuers can only offer their tokens to US users if the Treasury confirms that the foreign regulatory system is sufficiently comparable to US standards. This provision is widely viewed as an effort to close regulatory loopholes and could directly affect market giants like Tether. Legally registered in the British Virgin Islands under Tether Limited, the issuer of USDT has already been delisted<\/a> from EU exchanges after failing to obtain authorisation under MiCA. Now, with the GENIUS Act on the horizon, a question looms over whether Tether will be allowed to continue offering USDT in the US market, or whether it stands to lose access to yet another major jurisdiction.<\/p>\n The GENIUS Act, however, has not escaped political backlash. Notably, it does not include an explicit prohibition on stablecoin issuance by Big Tech firms\u200a\u2014\u200aa key feature of its predecessor (STABLE Act). This omission prompted fierce criticism from House Democrats, who accused the bill of creating a permissive pathway for corporate giants to exert influence over monetary instruments. Representative Maxine Waters led the opposition, describing<\/a> the legislation as \u201criddled with loopholes\u201d and warning that it would enable Big Tech and other commercial powerhouses to issue their stablecoins with insufficient oversight. In protest, Democrats introduced<\/a> a self-explanatory countermeasure\u200a\u2014\u200athe \u201cStop TRUMP in Crypto Act\u201d\u200a\u2014\u200aaimed at prohibiting government officials from personally profiting from crypto-related ventures while in office, an unmistakable jab at President Donald Trump\u2019s reported<\/a> ties to the \u201cUSD1\u201d stablecoin project.<\/p>\n As of mid-2025, the GENIUS Act awaits final passage in the House and the President\u2019s signature. If enacted, it will represent not only the first federal law in the United States specifically addressing crypto assets, but also a milestone in legislative evolution\u200a\u2014\u200aone that reflects a deliberate attempt to balance financial innovation with regulatory safeguards. The journey from the STABLE Act\u2019s rigid, bank-only model to the GENIUS Act\u2019s more flexible framework illustrates a shift towards pragmatism: stablecoins are still firmly anchored within regulatory perimeters, yet issuers are now offered multiple, carefully supervised pathways to operate under state or federal oversight.<\/p>\n Source: \u00a9 2023 Digital & Analogue\u00a0Partners<\/p>\n The GENIUS Act establishes a dual-licensing framework rooted in US federalism, providing stablecoin issuers with a choice between federal or state supervision depending on their issuance scale. Entities such as subsidiaries of insured depository institutions, newly established nonbank firms, and other regulated financial bodies may issue \u201cpayment stablecoins\u201d\u200a\u2014\u200adefined as digital tokens redeemable at a fixed value, usually pegged 1:1 to the US dollar. Issuers with circulation below $10 billion can operate under state oversight, while those exceeding this threshold come under federal supervision. This adaptable structure supports innovation while ensuring fiat-referenced stablecoins are regulated proportionately to their systemic\u00a0risk.<\/p>\n In contrast, the MiCA introduces a harmonised EU-wide licensing system designed to ensure uniformity across all member states. It covers both E-Money Tokens (EMTs)\u200a\u2014\u200astablecoins referencing a single fiat currency\u200a\u2014\u200aand Asset-Referenced Tokens (ARTs)\u200a\u2014\u200astablecoins backed by baskets of assets such as multiple currencies or commodities. Regardless of their type, all issuers must be authorised by a national competent authority (e.g., BaFin in Germany, AMF in France). For stablecoins considered \u201csignificant\u201d in terms of scale or cross-border relevance, supervision shifts to pan-EU bodies such as the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), with monetary oversight by the European Central Bank\u00a0(ECB).<\/p>\n Despite their structural differences, both frameworks employ a tiered enforcement model: as systemic importance increases, so does the level of regulatory scrutiny. In the US, oversight transitions from the state to the federal level; in the EU, from national to Union-level supervision. This reflects a shared regulatory judgement that scale heightens risk and warrants enhanced governance.<\/p>\n Crucially, both the GENIUS Act and MiCA impose strict prudential safeguards. Under MiCA, EMTs and ARTs must be fully backed by reserves held in low-risk, high-liquidity instruments, with legally enforceable redemption rights. Similarly, the GENIUS Act requires 1:1 backing by US dollars or equivalent safe assets (e.g., Treasury bills), along with monthly reserve attestations and par-value redemption guarantees. Both frameworks treat stablecoins as money-like instruments and mandate operational standards comparable to those of banks or e-money institutions.<\/p>\n MiCA was the first legislative initiative globally to establish a comprehensive framework for stablecoins\u200a\u2014\u200aproposed in 2020, adopted in 2023, with stablecoin-specific provisions coming into force in June 2024, ahead of its broader crypto-asset rules (which came into effect in December 2024), underscoring the EU\u2019s prioritisation of monetary stability.<\/p>\n Although the US and the EU have taken different legislative routes, both the GENIUS Act and MiCA reflect a shared regulatory philosophy: stablecoins are \u201cmoney-like\u201d instruments that must be subject to robust oversight, prudential safeguards, and consumer protection. In the United States, this principle is embodied in the GENIUS Act, which deliberately excludes compliant stablecoins from classification as securities or commodities. Instead, they are regarded as monetary instruments subject to banking-style regulation. The rationale is clear: a widely used stablecoin could impact monetary stability and must therefore meet standards of safety, soundness, and parity with fiat currency.<\/p>\n As outlined in Recital 18 of the MiCA regulation, EMTs (crypto-assets referencing a single official currency) function similarly to electronic money under Directive 2009\/110\/EC<\/a>. \u201cLike electronic money, such crypto-assets are electronic surrogates for coins and banknotes and are likely to be used for making payments\u201d. Thus, MiCA explicitly treats these tokens as digital surrogates for sovereign currency.<\/p>\n Both frameworks agree on a fundamental principle: stablecoins must operate within the regulated perimeter. Issuers need to be transparent, well-capitalised, and under constant supervision. Although each regime reflects the legal and institutional context of its jurisdiction, both aim to integrate stablecoins into the formal financial system as trustworthy, fully backed digital representations of fiat currency.<\/p>\n In summary, the GENIUS Act and MiCA share a transatlantic consensus: stablecoins must maintain their \u201cmoney-ness\u201d\u200a\u2014\u200aone-to-one redeemability, transparency, and resilience\u200a\u2014\u200aor risk damaging financial stability and user trust. GENIUS aims to do this by channelling issuance through banks and designated licensees with deposit-like obligations; MiCA adopts a similar approach by treating issuers as regulated e-money institutions. The overall message is clear: private digital money must adhere to public standards.<\/p>\n Source: \u00a9 2025 Digital & Analogue\u00a0Partners<\/p>\n A central policy question in the stablecoin debate is whether large technology companies, such as Meta, Amazon, Walmart, or Google, should be permitted to issue their own digital currencies.<\/p>\n The regulatory responses in the United States and the European Union reveal differing approaches to managing the risks posed by private monetary ecosystems controlled by corporate giants.<\/p>\n In the United States, the GENIUS Act does not explicitly prohibit Big Tech from issuing stablecoins (version passed by the US Senate in 2025). The Act permits any \u201cqualified issuer\u201d\u200a\u2014\u200aincluding a subsidiary of a commercial entity\u200a\u2014\u200ato obtain a federal or state licence, provided it complies with prudential requirements. In theory, a technology or retail giant could establish a regulated affiliate or partner with a depository institution to issue a fiat-referenced stablecoin.<\/p>\n This permissiveness has drawn criticism from lawmakers who argue that such an arrangement blurs the traditional separation between banking and commerce. Senator Elizabeth Warren notably warned<\/a> that the GENIUS Act \u201cundermines the separation of banking and commerce\u201d by giving Big Tech a pathway to expand its financial footprint. In response, House Democrats proposed a stricter alternative aligned with the earlier STABLE Act, which would explicitly ban non-financial commercial companies from owning or controlling stablecoin issuers\u200a\u2014\u200aan attempt to maintain the historical firewall between corporate conglomerates and monetary functions. Whether such a restriction will appear in the final text of the GENIUS Act remains uncertain for\u00a0now.<\/p>\n The EU, while avoiding direct references to Big Tech, has implemented de facto restrictions through MiCA\u2019s design. MiCA sets strict quantitative limits on stablecoins used for payments. Article 23 caps the daily transaction volume of a non-euro stablecoin within the EU at 1 million transactions or \u20ac200 million per day. Once these limits are exceeded, the issuer must reduce usage or face restrictions from regulators. These caps apply only to non-euro-denominated tokens, targeting foreign ARTs issuers\u200a\u2014\u200aprecisely the structures proposed for global stablecoins by Big Tech. Furthermore, the ECB retains the authority to evaluate the monetary impact and, together with the EBA, can designate a stablecoin as \u201csignificant,\u201d which can trigger enhanced supervision or even issuance restrictions. Thus, while MiCA does not explicitly prevent Big Tech from becoming stablecoin issuers, it establishes structural disincentives that effectively limit the scale and adoption of any privately issued, non-euro stablecoin within the\u00a0bloc.<\/p>\n \u200b\u200bThe normative question\u200a\u2014\u200awhether Big Tech should be allowed to issue stablecoins\u200a\u2014\u200aextends beyond regulatory architecture into broader concerns about economic concentration, platform dominance, and the future of monetary sovereignty.<\/p>\n If appropriately regulated, Big Tech firms could bring much-needed efficiency, scale, and user adoption to digital finance. As we previously reported<\/a>, Walmart and Amazon are already exploring<\/a> the issuance of their own stablecoins. With billions of users and a highly developed payment infrastructure, they are well-positioned to offer seamless integration of stablecoins into everyday commerce. From a financial inclusion perspective, their reach could onboard underbanked populations and accelerate the transition to digital payments. Provided these firms are subject to the same prudential, AML\/KYC, and governance requirements as any other issuer, there is little reason to prohibit them outright.<\/p>\n However, permitting Big Tech to issue money-like instruments fundamentally alters the balance of power between states and corporations. Stablecoins are not merely payment tools\u200a\u2014\u200athey are a monetary layer. If permitted to scale without limits, stablecoins issued by private tech firms could form self-contained financial ecosystems that bypass traditional banking, reduce the effectiveness of monetary policy, and fragment payment rails along corporate lines. A firm that controls both the user interface (e.g., smartphone platforms) and the monetary instrument (e.g., a proprietary stablecoin) could acquire outsized influence over economic behaviour, pricing, and even surveillance.<\/p>\n Moreover, Big Tech\u2019s business model\u200a\u2014\u200areliant on data monetisation, network effects, and winner-takes-most dynamics\u200a\u2014\u200araises unique risks when applied to financial infrastructure. Unlike traditional financial institutions, these firms may not be subject to the same fiduciary obligations or regulatory cultures. A stablecoin issued by a tech company could be algorithmically tied to commercial behaviour: for instance, discounts for spending within an ecosystem, or preferential treatment based on data profiles. Such \u201cprogrammable finance\u201d risks deepening digital discrimination and undermining user autonomy.<\/p>\n Finally, there is the question of systemic importance. A stablecoin used by hundreds of millions of users across jurisdictions could become \u201ctoo big to fail.\u201d If such an instrument were to encounter a technical failure, reserve deficiency, or legal challenge, the effects could ripple across not just financial markets, but also e-commerce, remittances, and public services. Regulators would be forced to intervene, raising moral hazard concerns and potentially subordinating public interest to corporate continuity.<\/p>\n In light of these considerations, stablecoin issuance should be insulated from commercial conflicts of interest. The aim is to prevent any one firm from controlling both the rails and the currency. This is not a rejection of innovation, but a structural safeguard: ensuring that digital money serves public ends, not just private\u00a0margins.<\/p>\n Source: \u00a9 2025 Digital & Analogue\u00a0Partners<\/p>\n The global evolution of digital currency is increasingly shaped by two diverging models: the West\u2019s decentralised stablecoin frameworks and China\u2019s state-led central bank digital currency (CBDC). These approaches represent more than regulatory preferences\u200a\u2014\u200athey reflect competing political philosophies about control, innovation, and monetary sovereignty.<\/p>\n Both the GENIUS Act in the United States and the MiCA regulation in the European Union envisage a regulated coexistence of public oversight and private issuance. Under these regimes, stablecoins are framed as digital proxies for fiat currency\u200a\u2014\u200aissued by licensed entities, backed 1:1 by reserves, and monitored by financial regulators. This architecture reflects a compromise: rather than prohibit private issuance of money-like instruments, the West channels it through strict prudential and compliance frameworks.<\/p>\n In this model, stablecoin issuers effectively become agents of the state\u2019s monetary framework, akin to franchisees of central banks. Redemption guarantees, reserve standards, and transparency rules ensure that the digital assets they issue do not compromise systemic stability. While the US has backed away from developing a retail CBDC, particularly following the 2025 presidential executive order<\/a> freezing all federal CBDC efforts, it continues to pursue financial innovation via the private sector. Stablecoins issued in compliance with the GENIUS framework may become the country\u2019s de facto digital dollar\u200a\u2014\u200arepresenting privately issued, publicly regulated digital\u00a0money.<\/p>\n China\u2019s approach<\/a> could not be more different. With the e-CNY, Beijing has opted for a fully centralised architecture, with the central bank not only issuing but also directly managing the digital currency. The People\u2019s Bank of China acts as the sole issuer, embedding programmability, traceability, and monetary policy tools directly into the digital currency infrastructure.<\/p>\n In doing so, China rejects the foundational premise of the Western model\u200a\u2014\u200athat private institutions can be trusted to manage public monetary instruments. Instead, the e-CNY is positioned as a sovereign alternative to both decentralised cryptocurrencies and Western-dominated payment networks. It serves multiple policy objectives simultaneously: strengthening domestic monetary control, expanding surveillance capabilities, and laying the groundwork for international settlement alternatives through cross-border projects, such as mBridge. The rapid expansion of the e-CNY pilot, now encompassing over a dozen provinces and hundreds of millions of wallets, demonstrates China\u2019s commitment to establishing state-issued digital money as the global standard. Its export ambitions\u200a\u2014\u200aparticularly among BRICS nations\u200a\u2014\u200aposition it as a potential challenger to the dollar-centric system.<\/p>\n While the United States has effectively halted CBDC development, Europe continues to pursue a dual-track strategy: regulating privately issued stablecoins under MiCA, while steadily advancing the digital euro project led by the\u00a0ECB.<\/p>\n In October 2021, the ECB launched<\/a> the investigation phase for a retail CBDC, aiming to create a digital euro that would coexist with\u200a\u2014\u200anot replace\u200a\u2014\u200aphysical cash. By December 2024, the ECB had released<\/a> its second progress report, including a draft rulebook outlining the project\u2019s technical and regulatory dimensions. The next major milestone is expected in autumn 2025, when the ECB plans to finalise its outreach strategy, procurement procedures, and the selection of technology providers.<\/p>\n Importantly, the EU\u2019s commitment to the digital euro does not conflict with MiCA\u2019s stablecoin framework. Instead, the two measures are designed to complement each other. MiCA creates a regulatory boundary for private stablecoins, ensuring that private entities can issue fiat-backed digital assets under stringent prudential, governance, and disclosure requirements. These assets may be used for payments but are not considered legal tender and are subject to usage limits. Conversely, the digital euro would serve as a form of public money: issued and backed by the ECB, granted legal tender status, and aimed at preserving monetary sovereignty in the digital age. It is envisioned as a universal, privacy-focused, and cost-free means of payment, accessible throughout the EU. By maintaining both regulatory paths\u200a\u2014\u200aMiCA for private stablecoins and a digital euro as public infrastructure\u200a\u2014\u200athe EU seeks to strike a balance between market innovation and public oversight and monetary sovereignty.<\/p>\n As global regulatory frameworks solidify, one thing is clear: stablecoins are no longer a peripheral innovation\u200a\u2014\u200athey are becoming central to the future of money. Yet how they will be governed, and by whom, remains subject to competing visions.<\/p>\n The GENIUS Act in the United States and the MiCA regulation in the European Union share a foundational premise: stablecoins are money-like instruments that require oversight akin to that applied to traditional financial institutions. Both frameworks aim to preserve monetary stability, protect consumers, and ensure that stablecoins remain redeemable, transparent, and prudently managed. Meanwhile, China\u2019s e-CNY model embodies a starkly different approach, rejecting private issuance altogether in favour of state monopolisation of digital currency.<\/p>\n Will stablecoins evolve into self-contained monetary systems operated by Big Tech, or will they remain tightly regulated extensions of sovereign currencies?<\/p>\n The regulatory trend leans towards containment rather than autonomy. Although the GENIUS Act keeps the door open for Big Tech participation, political opposition and structural limitations suggest that such a role will be tightly restricted. MiCA goes further by setting strict limits on stablecoin use, effectively preventing any private token\u200a\u2014\u200aespecially foreign or corporate-issued\u200a\u2014\u200afrom becoming a de facto substitute for the euro. The overall direction is clear: stablecoin issuers may operate at scale, but only as licensed entities, not as independent monetary\u00a0players.<\/p>\n Should stablecoins be seen as simple payment innovations or as rising challenges to monetary sovereignty?<\/p>\n They are both. Stablecoins offer efficiencies and financial access that traditional systems have failed to provide. However, their capacity to scale, especially when connected to dominant digital platforms, creates systemic risks that surpass those of conventional fintech products. They are not merely payment tools\u200a\u2014\u200athey are programmable money with the potential to transform credit, commerce, and control. Therefore, the regulatory response is not just about compliance; it is about reaffirming the limits of monetary sovereignty in the digital\u00a0era.<\/p>\n Ultimately, the debate over stablecoins is not about technology\u200a\u2014\u200ait is about power. The question is not only whether private actors can issue digital money but also whether they should\u200a\u2014\u200aand under what conditions. Stablecoins are unlikely to replace sovereign currencies entirely, but they are transforming the infrastructure of money. Whether issued by fintechs, banks, or tech giants, these instruments are being reshaped\u200a\u2014\u200anot as rivals to central banks, but as regulated representatives of state-backed value in the digital age. The next decade will determine how effectively this balance is achieved\u200a\u2014\u200aand whether it can be maintained amid mass adoption, geopolitical rivalry, and the ongoing merging of finance and technology.<\/p>\n In 2025, the global consensus is forming: stablecoins may be private in origin, but their destiny is\u00a0public.<\/p>\n Yuriy BrisovLiza LobutevaThis article was written by Yuriy Brisov<\/strong> & Liza Lobuteva <\/strong>of Digital & Analogue Partners. Visit dna.partners<\/a> to learn more about our team and the services.Be digital, be analogue, be with\u00a0us!<\/p>\n Stablecoin Regulation in 2025: State Power, Private Money, and the New Monetary Architecture<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Source: \u00a9 2025 Digital & Analogue\u00a0Partners 1. Introduction: A Global Race to Regulate Private Digital\u00a0Money As stablecoins gain prominence worldwide, two foundational questions emerge: Will stablecoins evolve into self-contained monetary systems operated by Big Tech\u200a\u2014\u200aor remain tightly regulated extensions of sovereign currencies, with issuers functioning as licensed franchisees of central\u00a0banks?Should stablecoins be seen merely as […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-76321","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/76321"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=76321"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/76321\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=76321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=76321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=76321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}2. Legislative Evolution in the US: From the STABLE Act to the GENIUS\u00a0Act<\/h3>\n
2.1 The STABLE Act (2020): A Defensive First\u00a0Draft<\/h3>\n
2.2 Stablecoins in Limbo: Debate Without Delivery (2021\u20132025)<\/h3>\n
2.3 The GENIUS Act (2025): A Pragmatic Compromise<\/h3>\n
3. GENIUS Act vs. MiCA: Converging Philosophies, Diverging Instruments<\/h3>\n
3.1 GENIUS Act vs. MiCA: Supervision, Scope, and Prudential Safeguards<\/h3>\n
3.2 Similar View: Stablecoins as Money-Like Instruments<\/h3>\n
4. Should Big Tech Issue Stablecoins: The Question of Private Monetary\u00a0Power<\/h3>\n
4.1 Regulatory Posture: Containing Corporate Monetary Ambitions<\/h3>\n
4.2 Policy Dilemma: Should Big Tech Control Digital\u00a0Money?<\/h3>\n
5. West\u2019s decentralised stablecoins vs. China\u2019s CBDC: Competing Visions for the\u00a0Future<\/h3>\n
5.1 The West\u2019s Hybrid Model: Public Infrastructure, Private\u00a0Issuers<\/h3>\n
5.2 China\u2019s CBDC Model: Centralisation by\u00a0Design<\/h3>\n
5.3 Europe\u2019s Middle Path: A Cautious Public Alternative<\/h3>\n
Conclusion: Stablecoins at the Crossroads of Innovation and Sovereignty<\/h3>\n