WASHINGTON, DC (Photo by Stefan Zaklin/Getty Images)
The Senate passed the GENIUS Act on Tuesday, aiming to bring stablecoins under a national regulatory framework. In this historic bill, which now needs to pass the House of Representatives, lawmakers are moving to define what a “digital dollar” really is.
The stablecoin market expanded from $5 billion in 2020 to nearly $261 billion today, with Tether alone holding $155 billion. For context, Tether’s $155 billion market cap rivals the GDP of Hungary, which was about $212 billion in 2023. Last year, the company reported $13 billion in profits from investing its reserves, primarily in the U.S. Treasuries, making it more profitable than BlackRock. In fact, according to a report by the crypto exchange CEX.io, more money moved through stablecoins than Mastercard in 2024. Over $27.6 trillion was settled via tokens most mainstream credit card users still haven’t heard of, or understand, quite yet.
Global Stablecoin Growth Is Hidden In Plain Sight
Until now, the most rapid growth of stablecoin usage has taken place outside of North America, even though most stablecoins are pegged in some way to the dollar. In Latin America, 71% of financial services firms now use stablecoins for cross-border payments. The region processes $94.2 billion in genuine payment settlements, not trading volume. Business-to-business payments alone account for $3 billion per month.
The acceleration gained momentum after the U.S. Securities and Exchange Commission’s April 2025 guidance declared that traditional 1:1 backed stablecoins aren’t securities. Within weeks, Société Générale announced USDCV, backed by Bank of New York Mellon. Standard Chartered partnered with Animoca Brands for Hong Kong’s first licensed stablecoin.
And all in all, one thing is clear: stablecoins have found their product market fit. Fit for emerging economies, where people don’t want to lose ~6.65% to remittances. Fit for better yield than what standard banks are providing. Fit for everyone who doesn’t want to wait for their payments to settle in three days.
By the end of 2025, there will be hundreds, if not thousands, of stablecoins launching. Yet they won’t take on the typical form as we commonly know it — instead, stablecoins will be getting more and more complicated.
This explosion in usage is precisely what the GENIUS Act aims to address: how do you regulate a financial instrument that already moves more money than global card networks?
The Upcoming Crypto Complexity Crisis
Today’s stablecoin landscape ranges from fiat-backed tokens like USD Coin (USDC) and Tether (USDT), to algorithmic models, to complex financial instruments that generate yield or track exotic assets.
In February, Figure Markets launched YLDS, the first SEC-registered yield-bearing stablecoin, offering 3.85% APY tied to Secured Overnight Financing Rate rates. MakerDAO’s new USDS accepts everything from Ethereum to tokenized U.S. Treasury bonds as collateral.
The GENIUS Act assumes stablecoins are simple, static, and centrally issued. But the next thousand stablecoins won’t look like these stablecoins at all. They’ll be yield-generating machines wrapped in “dollar clothing” — commodity plays disguised as cash or real estate exposure that fits inside your digital wallet. We’ll soon be able to use stablecoins that automatically shift between treasury bills and corporate bonds based on market conditions, or tokens that give you exposure to African farmland while maintaining a dollar peg.
We’re already beginning to see certain hints: tokenized gold reserves, carbon credit backing and even stablecoin protocols that track baskets of emerging market currencies. Projects like Virtual Finance, who are building on Scroll — a blockchain that I co-founded, and Synthetix, are experimenting with synthetic dollar models. ViFi’s synthetic dollar model for example is designed to offer local currency stability in high-inflation environments, without centralized reserves.
The winners won’t be the most stable — they’ll be the most useful. Just as you can’t currently distinguish which dollar bill is coming from Chase and which from Bank of America, soon users won’t look at who is issuing the stablecoin. Instead, the yield and what else can be done with it will matter more.
How Stablecoins Reshape Financial Infrastructure At Internet Speed
Regulators are fighting yesterday’s war with tomorrow’s weapons pointed backwards. The GENIUS Act assumes stablecoins are static instruments — issued here and regulated here. But what happens when a stablecoin issued in Singapore, backed by London real estate, traded on a Cayman Islands exchange, and held by someone in Lagos, eventually fails? Whose problem is that?
The answer: everyone’s and no one’s.
Europe tried the heavy-handed approach with the Markets in Crypto-Assets Regulation. And as a result, Europeans now access the same stablecoins through DeFi, just with extra steps and (potentially) higher risk. The U.S. wants domestic oversight while Tether laughs from the British Virgin Islands, holding more treasuries than most countries. Asia is crafting its own rules, creating a patchwork where regulatory arbitrage isn’t a bug — it’s an entire business model.
When thousands of stablecoins exist, each with different mechanisms, backings and jurisdictions, traditional regulation becomes a game of whack-a-mole. Except the moles are armed with smart contracts and the hammer is made of strongly worded letters.
The Chaotic Future Of Crypto Markets
The barbarians aren’t at the gate — they’re already inside, issuing tokens and earning yield. When this unravels, and parts of it will, there’s no Federal Reserve to lower rates, no U.S. Treasury to backstop losses and no coordinated response from people who can’t even agree on what a stablecoin is.
But maybe that’s the point. Maybe the chaos is the feature. In Argentina, chaos means 50% inflation, so a synthetic dollar backed by derivatives feels like stability that not all citizens are used to. In Nigeria, chaos means capital controls, so any dollar access beats none. For millions, these complicated, possibly fragile and definitely risky instruments solve real problems — and they solve them today.
The thousand stablecoins launching this year won’t all survive. Most won’t. But the ones that do will reshape how money works, who controls it and what it can do.
Traditional finance took centuries to build safety nets. We’re speedrunning the same evolution in years, maybe months. Whether that ends in breakthrough or breakdown depends entirely on how thoughtfully we build today.
As the GENIUS Act attempts to define what a regulated stablecoin, and by extension, a “digital dollar,” should look like, it may be racing against a moving target. The market is evolving faster than legislation can draft definitions.
Disclosure: Sandy Peng is the Co-Founder of Scroll, a blockchain that ViFi is building on with regards to a stablecoin project.
