U.S. Stablecoin Adoption Is Being Hindered by a Lack of Regulation, S&P Says

S&P Global Ratings stated that the lack of U.S. regulation is preventing wider use of stablecoins, especially by institutions. Stablecoins are cryptocurrencies pegged to assets like the U.S. dollar and are used in crypto markets and international money transfers. S&P expects stablecoin use to increase after regulations are established. The proposed GENIUS Act would federally regulate stablecoins with market caps exceeding $10 billion, potentially allowing aligned state regulations, while the STABLE Act proposes unconditional state regulation. S&P anticipates users will switch to regulated stablecoins once a framework exists, potentially reshaping the industry. They believe stablecoins will become more crucial for online transactions, safeguarding savings against unstable currencies in emerging markets and facilitating payments. Last week, JPMorgan suggested that Tether, the issuer of the leading stablecoin USDT, might need to sell some of its Bitcoin holdings to comply with potential U.S. stablecoin regulations.