Stablecoins see record growth in 2025, GENIUS Act opens a new chapter

Source: PortaldoBitcoin Original Title: Stablecoins experienced a record growth in 2025, with the GENIUS Law opening the floodgates Original Link: Stablecoins just had their best year ever, with capitalization increasing by 49% in 2025, from $20.5 billion in January to $30 billion at the end of November.

The exponential growth in the stablecoin category has been driven by strong catalysts. Over the past 12 months, issuers of these crypto assets in the US have gained regulatory frameworks, clearer implementation of the MiCA( crypto asset market) in Europe, and institutional adoption.

Stablecoins are crypto assets designed to maintain a 1:1 peg with fiat currencies such as the US dollar or euro. Issuers hold funds as reserves and promise that tokens can be redeemed at any time for the underlying currency. Tether’s USDT and Circle’s USDC are the oldest and most widely used stablecoins, existing since 2014 and 2018 respectively.

In July this year, the President signed the GENIUS Act. The bill was introduced by Tennessee Republican Senator Bill Haggerty in May, approved by the Senate in June, and signed into law a month later.

“The approval of the GENIUS Act is very important. It creates a federal regulatory framework for stablecoins that we didn’t have before. So I think it brings clarity to the market. I hope it at least addresses some of the risks associated with stablecoins. Therefore, I believe this is a very significant step,” said Timothy Massad, former Chairman of the Commodity Futures Trading Commission.

Even before the new law was signed, the institutionalization of stablecoins was progressing smoothly. Payment processor Stripe announced plans to support stablecoin networks in May, claiming support in over 100 countries.

In September, PayPal expanded its stablecoin support to the Tron and Avalanche networks, coinciding with its stablecoin surpassing $1 billion in circulation.

Meanwhile, Circle attempted to go public via a SPAC in 2022, ultimately listing on the New York Stock Exchange through an IPO on June 30. The trading volume was so high that the exchange paused trading three times in the first hour, and the token price more than doubled in that short period.

However, not all stablecoin issuers have had smooth sailing. In November, a rating agency downgraded Tether’s USDT stability rating to “weak,” citing the inclusion of Bitcoin in its reserves, which could pose greater risks if BTC prices drop significantly.

Tether had previously addressed concerns about its reserve composition. In 2021, critics warned about its holdings in commercial paper—a form of short-term unsecured corporate debt. By the end of 2022, the issuer claimed to have fully eliminated debt from its reserves.

Meanwhile, several of the largest stablecoin issuers have just received preliminary approval for national bank charters, having applied for bank licenses with the (Office of the Comptroller of the Currency (OCC)).

Circle, Ripple, Paxos, BitGo, and Fidelity—though the latter is not a stablecoin issuer, despite testing one earlier this year—have received preliminary approval for OCC bank charters.

“New banks entering the federal banking system are beneficial for consumers, the banking industry, and the economy,” said OCC Comptroller Jonathan V. Gould in a statement. “They provide new products, services, and sources of credit for consumers, and ensure the banking system remains vibrant, competitive, and diverse.”

More regulations are expected to be introduced to accommodate stablecoin issuers. In December, FDIC Acting Chair Travis Hill told lawmakers that the agency has begun drafting rules to implement the GENIUS Act and expects to propose an enforcement framework “later this month,” with prudential standards to be proposed “early next year.”