As stablecoins gain popularity, what measures are governments around the globe taking in response?

The Rise of Stablecoins in Mainstream Finance

Stablecoins have long been promoted as the key to integrating cryptocurrencies into everyday transactions. By 2025, these digital assets have evolved from a theoretical solution to a widely adopted tool among financial institutions, banks, and even those previously skeptical of crypto.

According to Artemis Analytics, stablecoin transaction volumes soared by 72% last year, reaching an impressive $33 trillion (€28 trillion).

Stablecoins are digital tokens engineered to keep their value steady by linking them to tangible assets, most commonly the US dollar. In essence, they function as digital stand-ins for traditional currencies.

Because cryptocurrencies typically operate outside the control of conventional banks and are not subject to government monetary policies, financial institutions were initially hesitant to use them for transactions.

Unlike other digital assets, stablecoins are designed to mirror the value of government-issued currencies and are supported by reserves such as cash and treasury bills, ensuring holders can redeem them at a 1:1 ratio.

Currently, over 90% of stablecoins are tied to the US dollar. The two largest players are Tether’s USDT, with a market capitalization of $186 billion (€160 billion), and Circle’s USDC, valued at $75 billion (€65 billion). In 2025, Circle processed $18.3 trillion (€15.7 trillion) in transactions, while USDT accounted for $13.3 trillion (€11.4 trillion).

A report from California-based venture capital firm a16z in October also analyzed genuine stablecoin payments in 2025. Their findings showed that, after adjustments, stablecoins facilitated at least $9 trillion (€7.7 trillion) in real user payments—an 87% jump from 2024. The report noted this figure is over five times PayPal’s volume and more than half of Visa’s.

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As stablecoins attract more attention from the financial sector, organizations like the International Monetary Fund are urging global cooperation to establish a unified regulatory approach.

However, the way stablecoins are issued and regulated varies greatly between regions such as the EU, US, China, and elsewhere.

Understanding Central Bank Digital Currencies (CBDCs)

In addition to privately issued stablecoins, central banks have begun developing their own digital currencies, known as CBDCs.

These government-backed digital currencies are supported by central banks but do not rely on decentralized blockchain technology for their core operations.

McKinsey reports that, as of 2025, cash still makes up 46% of global payments. However, non-digital transactions are declining, especially in developed nations with advanced digital infrastructure and financial access.

Recognizing these shifts, many governments and central banks see CBDCs as a practical response to changing payment habits.

China began piloting its digital yuan (e-CNY) in 2019, and the program has since expanded.

Meanwhile, the European Central Bank (ECB) is developing a digital euro. In October 2025, the ECB announced the completion of its preparation phase.

ECB President Christine Lagarde remarked, “We have completed our work, but it is now up to the European Council and, later, the European Parliament to determine if the Commission’s proposal meets expectations.”

The Eurosystem is targeting an initial launch in 2029.

The US Approach: Favoring Stablecoins Over CBDCs

The Trump administration has taken a markedly different stance, prioritizing stablecoins over central bank digital currencies.

In January 2025, President Trump issued an executive order barring federal agencies from establishing, issuing, or promoting CBDCs domestically or internationally.

This move allowed USDT, USDC, and other privately issued dollar-backed stablecoins to flourish without competition from a government-backed alternative.

In July 2025, the administration enacted the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), which set forth a comprehensive regulatory framework for stablecoins.

The legislation requires stablecoin issuers to fully back their tokens with liquid assets such as US dollars, treasury bills, and bonds, maintaining a 1:1 reserve ratio.

From the administration’s perspective, as stablecoin issuers grow, they must continually purchase US debt to support their reserves, further integrating these assets into the financial system.

Stablecoin Oversight in the European Union

In China, the rollout of the digital yuan was accompanied by a ban on stablecoins within the country.

Conversely, the EU has not imposed restrictions on stablecoins despite the impending introduction of the digital euro.

Stablecoin adoption continues to rise in Europe, and issuers must comply with the EU’s Markets in Crypto-Assets (MiCA) regulation, which provides a regulatory framework for crypto businesses.

By July of this year, companies must secure a Crypto-Asset Service Provider (CASP) license to operate legally in the EU.

French payment giant Ingenico recently partnered with WalletConnect, a protocol linking crypto wallets to applications, to enable stablecoin payments at scale.

Through WalletConnect Pay, merchants can now accept stablecoins like USDC and EURC using Ingenico’s existing payment terminals.

Jess Houlgrave, CEO of WalletConnect, told Euronews that while MiCA is not flawless or the final word on crypto regulation in the EU, having some regulatory clarity is preferable to none.

Houlgrave also emphasized the need for consistent enforcement to prevent companies from exploiting regulatory differences across jurisdictions.

Euronews also interviewed Miguel Zapatero, general counsel at Crossmint, a company providing stablecoin infrastructure for businesses.

With a major presence in Spain, Crossmint recently obtained a MiCA license from the Spanish regulator (CNMV). Zapatero noted that the entry requirements are challenging and expensive for smaller firms, as the standards are the same for both large banks and startups.

He added that holding a CASP license increases trust among clients and accelerates regulatory processes in other countries, given MiCA’s reputation as one of the world’s strictest crypto regulations.

These perspectives reflect the EU’s philosophy of “regulating by example,” though there are concerns that excessive complexity could hinder innovation in the sector.