The strategic intention and policy implications of the US Stablecoin Act

Original text: Shen Jianguang, Zhu Taihui, Wang Ruohan, The intention and enlightenment of the US stablecoin bill, "Caijing", June 13, 2025.

Author: Shen Jianguang is the chief economist of JD Group, Zhu Taihui is the senior research director of JD Group, and Wang Ruohan is a researcher of JD Group.

The new US government's cryptocurrency policy framework has returned to the main line of "supporting innovative development". The "Stablecoin GENIUS Act" passed by the US Senate recently embodies five significant characteristics, It clearly reflects the strategic intention of the United States to dominate the development of the global stablecoin market: It is necessary to achieve both the dominance of US dollar stablecoins and the dominance of US issuers.

1. In terms of issuing entities, support US entities to issue payment stablecoins, and strictly restrict the issuance by entities outside the United States;

2.

In terms of reserve management, require stablecoin issuers to invest reserve funds only in US dollar-denominated assets in the United States;

3.

In terms of license approval, establish two types of license supervision mechanisms, federal and state, to encourage various types of stablecoins to compete and develop;

4. In terms of development ideas, support the integrated development of stablecoins and traditional financial institutions to strengthen the dominant position of the US dollar;

5.

In terms of risk prevention, issuers and regulatory authorities are required to have the technical capabilities to monitor risks and freeze funds.

At the same time, major countries such as the United Kingdom, South Korea, Turkey, and Australia have also been actively promoting relevant legislation for the development of stablecoins since 2025. Under such market and policy trends, it is recommended that China, in light of its national conditions, first support the Hong Kong Special Administrative Region to pilot the launch of offshore RMB stablecoins as soon as possible, and then follow the gradual model of

Recently, the U.S. Senate passed the National Innovation Act to Guide and Establish the United States Stablecoin (hereinafter referred to as the "Stablecoin GENIUS Act") and forwarded it to the House of Representatives for deliberation. Although it is not the final version, the main content of the "Stablecoin GENIUS Act" is largely consistent with the "Stablecoin Act" proposed by the House of Representatives, and it is expected that there will be no major adjustments to the subsequent thinking framework.

Analyzing the core content of the Stablecoin GENIUS Act, and based on our recent communication and understanding with relevant agencies in the United States, the new U.S. government's cryptocurrency policy framework has returned to

“ supporting innovative development

” text="">The main line of the bill clearly reflects the United States' intention to dominate the development of the global stablecoin market: it is necessary to achieve both the dominance of the US dollar stablecoin and the dominance of US issuers.

Combined with the rapid development trend of the global stablecoin market in recent years, and the recent legislative plans of major countries in the world such as the United Kingdom, Australia, South Korea, Turkey, and Argentina, the policy considerations of various countries on stablecoins are no longer a question of whether to develop, but a question of how to develop.

Under such market and policy trends, it is recommended that relevant Chinese departments comprehensively analyze the technical characteristics and functional attributes of stablecoins, clarify the relationship between stablecoins and encrypted assets, central bank digital currencies, RMB internationalization, and the prevention and control of illegal cross-border financial activities, eliminate related misunderstandings, and design and launch China's own stablecoin development plan. In light of China's specific national conditions, it is suggested that China first support the Hong Kong Special Administrative Region to pilot the launch of an offshore RMB stablecoin as soon as possible, and then follow the gradual model of “ first offshore and then offshore within the country

1. Restricting foreign issuers from entering the U.S. market

The Stablecoin GENIUS Act clearly states that

Payment stablecoins

are digital assets issued for payment or settlement and can be issued at a fixed face value (such as

1

leaf="">US dollars) and are not securities or commodities; at the same time, the bill imposes requirements on payment stablecoin issuers: they must be US registered entities and belong to one of the following three types of institutions - subsidiaries of insured depository institutions, federally approved non-bank entities, and state-approved issuing entities. At the same time, the bill imposes strict restrictions on foreign issuers entering the US market: they must be registered with the US Office of the Comptroller of the Currency (OCC) and meet strict compliance requirements. OCCWhen deciding whether to approve the issuance registration of an overseas entity, it will consider a number of factors, including assessing whether the regulatory framework of the overseas issuer's country is comparable, the issuer's financial and management resources in the United States, the information submitted toOCC, potential financial stability risks and illegal financial risks; at the same time, the bill also proposes to implement a reciprocal policy with the regulatory authorities of overseas issuers, that is, overseas regulatory authorities support U.S. issuing entities to issue U.S. dollar stablecoins in their country.

Although requiring stablecoin issuers to be localized is a trend in global stablecoin regulation, the requirements in the United States are still very different. The stablecoin bills introduced by the European Union, the United Arab Emirates and other places require stablecoin issuers to set up entities in their own country/regions, while also restricting the scope and amount of use of stablecoins. For example, the EU's Crypto-Asset Market Regulation Act (MiCA) stipulates that only euro stablecoins can be used to pay for everyday goods and services, and when the daily trading volume of the asset reference token (ART) in the single currency area exceeds 1 million transactions or the transaction amount reaches 200 million euros, the issuance of ART must be stopped.

However, the United States' "Stablecoin GENIUS Act" puts forward localization requirements for stablecoin issuers, but does not restrict the supported currencies, scope of use and scale of stablecoins. The reason behind this is that the current share of US dollar stablecoins in the global stablecoin market exceeds 95%. Issuers in the United States will naturally issue US dollar stablecoins, and the use of stablecoins in daily commodity and service transactions will not weaken but strengthen the sovereignty and international status of the US dollar.

Affected by the localization orientation of the stablecoin issuers supported by the bill, the world's leading stablecoin issuers and cryptocurrency exchanges have set up entities in the United States. Recently, Tether, the world's largest USDT (Tether) issuer, made it clear that it is actively considering creating a new stablecoin registered in the United States; the cryptocurrency payment platform MoonPayannounced the establishment of a new US headquarters in New York as the core hub for US business operations. Prior to this, the crypto exchange OKX established its regional headquarters in California while promoting the launch of centralized crypto exchanges and wallets in the United States. In addition, Crypto America recently disclosed that at least 15 cryptocurrency and financial technology companies are applying for banking licenses from the U.S. Office of the Comptroller of the Currency (OCC) in order to conduct business in compliance with regulations in the United States in the future.

2. Require stablecoin reserve assets to be dollarized

The Stablecoin GENIUS Act requires that stablecoins must be backed by U.S. dollars or highly liquid assets at a ratio of 1:1, and in terms of transparency, requires monthly public disclosure of the size and structure of reserve assets. Issuers with a market value of more than US$50 billion are required to submit audited annual financial statements. Issuers are not allowed to pledge, re-pledge or reuse reserve assets, including using reserve assets to redeem stablecoins and as collateral for repurchase and reverse repurchase. At the same time, in order to ensure that users can redeem fiat currency at any time, the bill requires federal and state regulators to formulate appropriate capital, liquidity and risk management rules for stablecoin issuers, which are not subject to traditional bank capital regulatory standards.

More importantly, the bill makes clear requirements for the dollarization of reserve assets. According to the bill, the reserve funds of U.S. stablecoin issuers include U.S. dollar cash, deposits in U.S. banks or foreign banks regulated by the United States, short-term U.S. Treasury bonds, short-term repurchase agreements backed by U.S. bonds, U.S. dollar money market funds, etc., which are all U.S. dollar financial assets with shorter maturities and higher liquidity. At the same time, unlike the EU's "MiCA Act" which requires that the proportion of bank deposits in stablecoin reserve assets cannot be less than 30% (the requirement for important stablecoins is not less than 60%), the "Stablecoin Act" The GENIUS Act does not give clear restrictions on the proportion of bank deposits and US Treasury bonds in the stablecoin reserve assets. Countries require that the reserve assets of their own stablecoins can only be invested in financial assets denominated in their own currencies in order to prevent the currency mismatch risk between stablecoins and reserve assets. The above requirements of the GENIUS Act show that although there is no clear requirement to issue US dollar stablecoins in the United States, it actually supports US dollar stablecoins.

The above requirements for the investment of reserve assets not only conform to the current market trend of stablecoin reserve fund investment, but also are to strengthen“ US dollar

—

US Treasury bonds and other financial products

“ text="">”New Dollar Circulation. Currently, the reserve funds of global stablecoins are mainly invested in U.S. Treasury bonds. As of March 2025, the scale of stablecoins such as USDT issued by the largest stablecoin issuer Tether is close to US$150 billion, and the U.S. Treasury bonds held in its reserve assets are close to US$50 billion. leaf="">120 billion US dollars (including indirect exposure to Treasury bonds through money market funds and reverse repurchase agreements), accounting for about 80%; the second largest stablecoin issuer, Circle, has issued stablecoins such as USDC, with a scale of more than 60 billion US dollars, and its reserve assets hold more than 555 billion US dollars in U.S. Treasury bonds. In April 2025, a report released by Citibank showed that as regulatory requirements become clear, U.S. Treasury bonds held by stablecoin issuers will exceed 1.2 trillion U.S. dollars in 2030, which will exceed the scale of U.S. Treasury bonds held by any single country.

3. Implement competitive development of two types of issuance licenses

The Stablecoin GENIUS Act requires that stablecoin issuers must obtain federal or state licenses. Among them, for stablecoins with an issuance scale of less than 10 billion US dollars, the issuer can choose state-level regulatory authorities for approval and supervision (including state-approved stablecoin issuers and state-regulated banking institutions); and issuers with a scale exceeding 10 billion US dollars must accept approval and supervision by federal regulatory authorities - deposit institutions will be subject to the regulatory framework of the Federal Reserve, and non-bank issuers will be subject to the regulatory framework of the OCC. At the same time, the bill also provides an exemption procedure, allowing issuers exceeding the $10 billion threshold to continue to be regulated at the state level, but federal regulators can have backup enforcement powers over state-licensed stablecoin issuers under certain circumstances. This regulatory arrangement not only conforms to the current diversified development framework of the U.S. monetary and banking system, which includes money service institutions (payment institutions), banking institutions and non-bank institutions approved and regulated by state governments, but also adapts to the U.S. state-federal dual-peak and multi-head regulatory framework in financial regulation. But from the ultimate goal, this regulatory arrangement reserves space for state-level regulatory experiments for smaller, start-up companies to issue stablecoins, which will help the United States form a diversified competitive development pattern of stablecoin issuers of different sizes and types.

State-level license approval will help promote innovation and market diversification of small stablecoin issuers, but the compliance costs behind it are also worthy of attention. According to the current financial regulatory system in the United States, on the one hand, financial institutions approved by state governments need to obtain approval from other states if they want to implement regional operations. For example, a money transmitter (MTL) is a license issued by a state government. If an institution applies for an MTL in one state, it needs to obtain approval from other states if it wants to conduct business in other states. On the other hand, MTL license holders also need to apply for a money service business license (MSB) from the Financial Crimes Enforcement Network (FinCEN) under the Department of the Treasury to fulfill anti-money laundering obligations.

Under such a regulatory system, U.S. payment stablecoin issuers will need to comply with similar licensing management requirements as “MTL+MSB”in the future. However, stablecoin transactions are global and decentralized, which means that in order to meet the needs of customers in different regions, stablecoin issuers need to apply for licenses in various states, and the compliance costs are relatively high. For example, in the early stage, Circle applied for registration for FinCEN's MSB license in order to issue stablecoin USDC in the United States, and also held MTL licenses in multiple states.

Fourth, promote the integration of stablecoins and the financial system

In terms of the type of subject, the requirements of the bill are relatively loose. According to the Stablecoin GENIUSAct, the issuers of payment stablecoins in the United States can be banking institutions or credit unions (through subsidiaries) that enjoy deposit insurance, federally approved non-bank payment institutions (including technology companies and fintech startups), or issuing entities or banking institutions approved by state governments. Some people believe that the loose requirements for issuing entities will divert the business of payment institutions and banking institutions, thereby creating a conflict of interest. There is also another view that the United States supports both non-bank institutions and banking institutions and payment institutions in issuing stablecoins, aiming to promote the integrated development of financial institutions and stablecoins.

Combining this requirement of the bill with the previous restrictions on overseas issuers and strengthening the investment of reserve assets, it can be seen that the strategic intention of the United States is to promote the issuance of US dollar stablecoins by US entities and promote the integration and development of stablecoins and the financial system, so as to strengthen the dominant position of the US dollar in the global monetary system. In August 2024, Trump made it clear that if the US dollar loses its status as the world's leading reserve currency, the consequences will be more serious than losing any war. 2025In January, Trump signed an executive order "Strengthening America's Leadership in Digital Financial Technology" after taking office as US President, which explicitly required measures such as taking actions to promote the development and growth of US dollar stablecoins to promote and protect the sovereignty of the US dollar.

2025Since 2017, the integration and development of stablecoins and traditional financial systems has been fully promoted. On the one hand, the cooperation between stablecoin issuers and payment institutions is constantly expanding. U.S. online payment institutions such as Paypal and Stripe have already launched stablecoin payments. Credit card institutions Visa and MasterCard have also cooperated with stablecoin issuers and cryptocurrency exchanges to launch stablecoin payments. On the other hand, banking institutions are also entering the stablecoin business. JPMorgan Chase launched its own stablecoin, JP Morgan Coin, as early as 2019. Recently, large US banking institutions such as Bank of America, Citigroup, and Wells Fargo are exploring the possibility of issuing joint stablecoins. Some US regional banks and community banks are considering whether to set up an independent stablecoin consortium. In addition, the globally systemically important Bank of New York Mellon has expanded its services to stablecoin issuer Circle, allowing customers to make payments to and from Circle through the bank for the purchase or sale of Circle's stablecoins. In addition, the Stablecoin GENIUS Act imposes strict requirements on large technology companies to issue stablecoins. The bill prohibits large public companies whose main business is non-financial services from issuing stablecoins unless they meet strict financial risk, consumer data privacy and fair business practice standards and obtain unanimous approval from the newly established Stablecoin Certification Review Committee (SCRC). Behind this requirement is that some Democratic lawmakers in the United States are worried that technology companies already have a large amount of user data. If they develop stablecoins and payment services on a large scale, it will bring new market monopoly, privacy protection and financial risk prevention problems. However, these issues that the Democratic Party of the United States is concerned about also exist when payment companies and banking institutions issue stablecoins. Whether it will eventually be retained in the bill and how it will be implemented later is still uncertain.

V. Technical requirements for issuers and regulators

To maintain financial stability and protect consumer rights, the Stablecoin GENIUS Act provides clear capital, liquidity and risk management requirements for stablecoin issuers, and explicitly proposes to protect the priority claim rights of stablecoin holders in the event of the issuer's bankruptcy. It also adds requirements for the Financial Stability Oversight Council (FSOC) to assess stablecoin-related risks in its annual financial stability report. More importantly, the Act requires issuers to have the corresponding technical capabilities to comply with regulatory requirements and administrative orders to seize, freeze, destroy or prevent the transfer of issued stablecoins.

Stablecoins are issued and traded based on blockchain, and have the characteristics of decentralized transactions, globalization, and irrevocability, which makes the supervision of illegal financial activities such as anti-money laundering and anti-terrorist financing more complicated. Judging from the previous regulatory policies of the European Union, Singapore, Hong Kong, China and other countries and regions, it has become a global trend to transplant the anti-money laundering and anti-terrorist financing requirements for traditional financial institutions and stock exchanges to the field of stablecoins and encrypted assets, comply with the standards of the Global Financial Action Task Force (FATF), and implement the “Travel Rule”.

But on this basis, the Stablecoin GENIUS Act" reflects the regulatory concept of using emerging technologies to prevent potential illegal financial risks behind stablecoin transactions. On the one hand, the bill regards the issuer as the “the first responsible person ” for anti-money laundering and combating illegal financial activities, emphasizing that all stablecoin issuers must have the technical ability to combat illegal financial activities in accordance with regulatory requirements, and gives relevant civil fines and criminal penalty requirements.

On the other hand, “Regulation cannot lag behind the application of technological innovation”, requiring the U.S. Financial Crimes Enforcement Network (FinCEN) to develop new anti-money laundering rules for digital asset activities while developing new tools to monitor illegal crypto activities, review issuers’ compliance programs, and require issuers to formally certify that they have an effective anti-money laundering and sanctions framework. Prior to this, the U.S. Securities and Exchange Commission (SEC) also clearly expressed its support for the regulatory sandbox mechanism to evaluate the risks of stablecoins, bond tokenization, etc. and the applicability of regulatory tools.

VI. Implications for China

Although the GENIUS Act still needs to be reviewed by the U.S. House of Representatives and some provisions may be further revised or face many challenges in its implementation, the main content of the bill is largely consistent with the Stablecoin Act proposed by the House of Representatives. The United States supports the “Stablecoin Compliance and Innovative Development” The main policy line will not change easily, and the intention of using the US dollar stablecoin to support and strengthen the US dollar in the international monetary system is quite obvious. At the same time, the Stablecoin GENIUS Act requires stablecoin issuers and regulatory authorities to use technological innovation to prevent potential risks in the application of technological innovation, and to regulate the development of stablecoins with a development perspective, which reflects a strong concept of "technological neutrality" and is also worthy of attention from all countries. At the same time, with the continuous growth of the stablecoin market size and the number of users, and the continuous expansion of the integration and development with the payment system, banking institutions and capital markets, the stablecoin policies of various countries have also undergone significant changes. At present, the European Union, Japan, Singapore, the United Arab Emirates, Hong Kong, China and other countries and regions have issued bills to regulate the innovative development of stablecoins. Since 2025, in addition to the United States, more than a dozen major countries such as the United Kingdom, Australia, and South Korea have announced relevant legislative plans. The policy considerations of various countries on stablecoins are no longer a question of whether to develop or not, but a question of how to develop; the regulatory frameworks of various countries for stablecoins are relatively similar, but the difference is that the degree of attention paid to preventing risks and supporting innovation varies. Under such market development and policy trends, it is recommended that relevant Chinese departments re-evaluate and design their own development policies. This first requires an in-depth and objective analysis of the business model, functional positioning, stability attributes of stablecoins, the relationship between stablecoins and central bank digital currencies, and the impact of stablecoins on monetary sovereignty, currency internationalization, and illegal financial activities, so as to comprehensively and objectively grasp the functional performance and potential risks, current needs, and long-term value of stablecoins.On this basis, the development plan and policy framework for the introduction of RMB stablecoins should be designed in light of China's national conditions.

As the starting point of development, offshore RMB stablecoins should be piloted in Hong Kong, China as soon as possible.Hong Kong, China is an offshore RMB trading center. In recent years, the amount of offshore RMB has continued to grow. There is a good market foundation for issuing offshore RMB stablecoins in Hong Kong, China. At the same time, Hong Kong, China has issued the Stablecoin Ordinance, established a relatively complete regulatory framework for stablecoins and crypto assets, and provided institutional guarantees for the issuance and trading of offshore RMB stablecoins.

At present, Hong Kong, China has taken the development of stablecoins and encrypted asset services as an important means to boost Hong Kong, China's status as an international financial center. However, Hong Kong, China implements a linked exchange rate system anchored to the US dollar. The Hong Kong dollar is already a traditional US dollar stablecoin. The market demand for the Hong Kong dollar stablecoin is relatively limited. Hong Kong, China's efforts to build an international cryptocurrency trading center also require the support of RMB stablecoins. After accumulating experience and improving the regulatory mechanism in Hong Kong, we can follow the gradual model of