• Eight of the top 25 crypto markets have introduced clear rules for stablecoins, shaping how the sector moves forward.
• The U.S. GENIUS Act lays the groundwork for stablecoin oversight, focusing on liquidity, redemption, and financial safeguards.
• Stablecoin issuers are now facing tough choices as they navigate complex global regulations and compliance demands.

Stablecoins have become a key part of digital finance, with trillions of dollars moving across blockchains each month. Once used mostly for crypto trading, they’re now being looked at as real-world tools to improve cross-border payments and modernize outdated financial systems. As a result, regulators are starting to catch up.

According to a new report by Chainalysis, eight of the top 25 countries involved in crypto have already put in place rules to govern how stablecoins are issued and managed. This is a major shift in the way governments are handling digital currencies.

In the U.S., the long-awaited GENIUS Act came into effect in July 2025. It forces stablecoin issuers to fully back their tokens with safe, liquid assets and offer guaranteed redemption.

It also blocks issuers from paying interest on the coins, reducing the risk of people pulling money from banks. Under this law, any issuer with more than $10 billion in market value must fall under federal oversight. Those below that level can follow state regulations if they meet the standards.

Also Read: JPMorgan CEO’s Surprising Move: Full Support for Stablecoins and Blockchain

Regulatory Fragmentation Slows Global Stablecoin Expansion

Countries are moving at different speeds, with varying rules on how issuers must hold reserves. Japan requires full backing in domestic bank deposits but now allows up to half in safe government bonds. In the EU, MiCA demands strong liquidity and clear separation between user funds and company assets. The UK allows some flexibility but requires a percentage in on-demand deposits.

Stablecoin growth internationally is frustrated by conflicting regulations. Hong Kong authorizes reserves in HKD-pegged tokens denominated in USD and provides redemptions within a single day, whereas Singapore provides a five-day deadline to issuers.

EU and Japan have tighter foreign issuer regulations, compared to more liberal UK. These different regulations add cost and operating challenges to companies.

Compliance and Crime Prevention Take Center Stage

They’re becoming more popular, but stablecoins are also incorrectly utilized. Since 2022, the largest number of illicit crypto transactions. That has kept regulators on edge.

To counter this, issuers like Tether are using blockchain tracking tools to spot suspicious activity and freeze funds. In 2024, Tether partnered with Chainalysis to develop a system that alerts them to risky transfers and helps them act quickly.

Also Read: Genius Act Set to Ignite $2 Trillion Stablecoin Market, Says Chainlink’s Nazarov