Stablecoins experienced a record growth in 2025, with the GENIUS Law opening the floodgates

Source: PortaldoBitcoin Original Title: Stablecoins had a record growth in 2025, with the GENIUS Law opening the floodgates Original Link: https://portaldobitcoin.uol.com.br/stablecoins-tiveram-crescimento-recorde-em-2025-com-a-lei-genius-abrindo-as-comportas/ Stablecoins just had their best year in history, with a market capitalization that grew 49% in 2025, rising from US$ 205 billion in January to US$ 300 billion at the end of November, according to data from cryptocurrency analysis platforms.

The exponential growth of the stablecoin category was driven by very strong catalysts. Over the past 12 months, issuers of this class of cryptocurrencies obtained a regulatory framework in the US, greater clarity and implementation of MiCA (Markets in Crypto-Assets) in the European market, as well as adoption by institutions.

What are stablecoins

Stablecoins are cryptocurrencies designed to maintain a 1:1 parity with fiat currencies, such as the US dollar or euro. Issuers keep the money in reserve with the promise that tokens can be redeemed for the underlying currency at any time. Two of the oldest and most widely used stablecoins, Tether’s USDT and Circle’s USDC, have been around since 2014 and 2018, respectively.

GENIUS Law marks a regulatory turning point

It was in July of this year that the GENIUS Law (Genius Act) was enacted. It was introduced in May, approved by the Senate in June, and signed into law a month later.

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

Institutionalization accelerating

Even before the signing of the new law, the institutionalization of stablecoins was already well underway. Payment processor Stripe announced in May plans to support stablecoin networks, stating they would be supported in more than 100 countries.

PayPal expanded support for its stablecoin to the Tron and Avalanche networks in September, just as its stablecoin surpassed US$ 1 billion in circulation.

And Circle, which previously attempted to go public via a SPAC in 2022, finally debuted with an IPO. When its shares began trading on the New York Stock Exchange on June 30, they became so popular that the exchange halted trading three times in the first hour, with the token price more than tripling in that short period.

Challenges persist

But not everything has been easy for all stablecoin issuers. In November, rating agencies downgraded Tether’s USDT stability, arguing that the inclusion of Bitcoin in its reserves makes it more susceptible to greater risks if BTC’s price drops drastically.

Tether has previously dealt with concerns about the composition of the reserves backing its stablecoin, in 2021, when critics warned about its holdings in commercial papers – a form of short-term, unsecured corporate debt. At the end of 2022, the issuer stated it had completely eliminated the debt from its reserves.

Bank licenses in process

At the same time, several of the largest stablecoin issuers have just received provisional approval for national banking licenses, having applied for banking licenses with the Office of the Comptroller of the Currency (OCC).

Circle, Ripple, Paxos, BitGo, and Fidelity received provisional approval to obtain OCC banking licenses.

“The entry of new banks into the federal banking sector is beneficial for consumers, the banking industry, and the economy,” said the Comptroller of the Currency in a statement. “They provide access to new products, services, and sources of credit for consumers and ensure a dynamic, competitive, and diverse banking system.”

Next regulatory steps

And more rules are on the way to accommodate stablecoin issuers. In December, authorities told legislators that they have begun work to promulgate rules to implement the Genius Act and expect to propose a framework soon, with prudential standards expected to be in place by the beginning of next year.