In previous installments of this series, we explored how stablecoins are evolving—from crypto-native tools to global financial infrastructure powering enterprise payments, cross-border settlements, and economic access in emerging markets. But one critical layer remains in flux: regulation.
Around the world, regulatory frameworks are beginning to take shape. The EU’s MiCA legislation, now in effect, has positioned the region as a first mover—taking a cautious but important step toward formalizing stablecoin oversight. Meanwhile, the U.S. remains fragmented, with overlapping state and federal approaches—but a unified framework finally appears to be on the horizon.
This installment explores the current state of regulation, where the U.S. stands relative to global peers, and why smart regulatory clarity is essential to unlocking the next phase of stablecoin adoption—particularly for enterprises and financial institutions.
As stablecoin adoption accelerates, governments around the world are working to define how this new layer of financial infrastructure should be regulated. Some jurisdictions have already implemented comprehensive frameworks, while others—like the United States—are advancing multiple proposals that could soon form the basis for a unified national standard.
These efforts offer early models to learn from—each with strengths, limitations, and lessons that can inform the next phase of regulatory evolution.
The European Union’s Markets in Crypto-Assets (MiCA) regulation is now in effect—marking the world’s most comprehensive regulatory framework for stablecoins. Its stablecoin-specific provisions went live on June 30, 2024, with the full regime taking hold on December 30.
MiCA requires stablecoin issuers to hold 1:1 liquid reserves, segregate customer funds, and register as electronic money institutions (EMIs). It effectively bans algorithmic stablecoins, reflecting lessons from the collapse of Terra. Starting April 2025, compliant issuers will also gain access to ECB settlement infrastructure, enhancing the credibility and utility of euro-backed stablecoins.
MiCA’s rollout contrasts sharply with the lack of oversight that enabled failures like FTX, where regulatory gaps allowed customer fund commingling and systemic risk. While MiCA does impose compliance costs, it offers clear benefits: regulatory clarity, consumer protection, and a unified framework that enables operations across all 27 EU member states.
But MiCA also reflects the caution of a first mover. In an effort to prevent confusion or unintended risk, it prohibits yield or incentive distribution on stablecoins—a move that could limit innovation and restrict product design. It’s a strong foundation, but one that will need refinement as the ecosystem matures.
Other jurisdictions are making progress as well. Singapore has established a clear, pro-business framework for digital assets, with guardrails that promote institutional trust. The UK and Hong Kong have shown early momentum in areas like payment use cases and asset classification. These frameworks have helped attract crypto-native firms and signal broader regulatory acceptance.
However, for U.S.-based enterprises, adopting stablecoin products issued in these jurisdictions can introduce complications—from cross-border compliance and tax treatment to reputational risk. In many cases, these products fall outside familiar regulatory categories or introduce operational friction that global enterprises aren’t yet prepared to manage.
While other nations have built the first layer of stablecoin policy, the U.S. now has the opportunity to learn from those efforts and define a regulatory framework that is uniquely suited for institutions, enterprises, and the dollar itself. A clear, unified approach—one that balances oversight with innovation—could establish the U.S. as the leader in shaping the next generation of financial infrastructure.
For years, the regulatory conversation around stablecoins in the U.S. was defined more by uncertainty than clarity. There were no comprehensive federal rules—only a patchwork of agency interpretations and state-level frameworks. And while frameworks like NYDFS and Wyoming’s SPDI charter demonstrated that stablecoin regulation could be both rigorous and innovation-friendly, they remained limited in geographic scope—prompting calls for a broader, unified federal approach. Now, that’s beginning to change.
New York’s Department of Financial Services (NYDFS) was one of the earliest regulators to establish a clear, enforceable framework for USD-backed stablecoins. As far back as 2018, it required issuers to operate under stringent licensing—either via its BitLicense or trust company charter. In 2022, it formalized expectations for stablecoins to be fully backed 1:1 by high-quality reserves, such as short-term U.S. Treasuries or FDIC-insured deposits, held in segregated accounts. Monthly attestations and real-time redemption rights are also required.
These safeguards aren’t theoretical—they’ve made NYDFS-regulated stablecoins among the most trusted in the market. For institutions, NYDFS has become the benchmark for what a “regulated stablecoin” looks like in practice. Its framework has also shaped emerging federal proposals like the GENIUS Act, which builds on the consumer protections, transparency, and operational discipline NYDFS already enforces.
What sets NYDFS apart is its clarity and enforceability—the framework has delivered transparent standards around reserve management, disclosures, and redemption rights. These protections help guard against failures seen in unregulated or offshore models, such as Terra’s UST collapse. For stablecoin holders, this means knowing their digital dollars are reliably backed by real ones.
For businesses and institutions, NYDFS provides not just credibility—but operational certainty. It has become a foundational model for how regulated stablecoins can work in the U.S. market. As Congress looks to scale responsible innovation nationwide, NYDFS stands as proof that real regulation doesn’t stifle progress—it enables it.
Introduced in 2020, Wyoming’s Special Purpose Depository Institution (SPDI) charter created the first U.S. banking framework designed specifically for digital assets. The model combines traditional financial safeguards—such as 1:1 reserve backing—with a tailored structure for institutions that custody or interact with tokenized value.
Unlike New York’s regulatory framework, which evolved out of consumer financial protection priorities, Wyoming’s SPDI was built from the ground up to support the operational needs of digital asset businesses. It enables companies like Kraken to operate as state-chartered institutions that offer custody services and issue asset-backed instruments like stablecoins, with full reserve backing held in segregated accounts.
While SPDIs haven’t yet been widely adopted by traditional enterprises, they’ve played an influential role in shaping national conversations—especially around digital asset custody, issuance, and the need for regulatory models that go beyond legacy categories. For firms focused on building future-forward infrastructure, SPDI remains a compelling option.
In 2023, California passed the Digital Financial Assets Law (DFAL)—a landmark move from the state with the largest economy in the U.S. The law, composed of Assembly Bill 39 and Senate Bill 401 (and later amended by AB 1934), creates a comprehensive licensing regime for digital financial asset businesses, including stablecoin issuers. While it doesn’t take effect until July 2026, DFAL signals that California intends to play a central role in shaping the next generation of financial infrastructure.
DFAL shares similarities with NYDFS in requiring 1:1 reserve backing, custody oversight, and stablecoin issuer licensing. But it also introduces provisions that reflect California’s cautious approach to consumer trust. Notably, the law prohibits issuers from marketing stablecoins as being “as safe” as bank deposits or stored-value products—a move designed to avoid misleading comparisons to traditional financial institutions. It also limits eligible reserves to those defined under the California Money Transmission Act, such as short-term government securities and insured deposits.
While DFAL is still in its implementation phase, it represents a major step toward regulatory harmonization at the state level. By following NYDFS's lead while layering on California-specific protections, the law creates a template that could influence how other states—and even federal regulators—approach stablecoin oversight in the years ahead.
As of March 27, 2025, the U.S. has made significant strides toward establishing a comprehensive regulatory framework for stablecoins. Multiple federal bills are under consideration, reflecting a bipartisan commitment to providing clarity and oversight in the digital asset space.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act) has emerged as a leading proposal. Introduced in the Senate on February 4, 2025, by Senators Bill Hagerty, Tim Scott, Cynthia Lummis, and Kirsten Gillibrand, the GENIUS Act aims to regulate payment stablecoins by establishing clear standards for reserves, redemption rights, issuer licensing, and oversight. Notably, the bill seeks to balance federal and state regulatory roles, allowing for joint regulation of depository institution issuers and state regulation of other issuers under a federal framework.
On March 13, 2025, the Senate Banking Committee approved the GENIUS Act with an 18-6 vote, including support from five Democrats. The bill now advances to the full Senate for consideration.
In the House, Representatives Bryan Steil and French Hill introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act on March 26, 2025. This legislation seeks to establish a framework for the issuance and operation of dollar-denominated payment stablecoins in the United States, emphasizing transparency and accountability for issuers.
Another significant proposal is the Lummis-Gillibrand Payment Stablecoin Act, introduced in the Senate on April 17, 2024. This bill aims to provide effective regulation of payment stablecoins, focusing on consumer protection and financial stability.
Executive Direction: A Clear Mandate for Dollar-Backed Innovation
On January 23, 2025, the White House issued Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology.” The order established the Presidential Working Group on Digital Asset Markets, led by AI and Crypto Czar David Sacks, with a mandate to deliver a comprehensive federal framework for digital assets—including stablecoins—within 180 days.
The order signaled two key priorities:
Treasury Secretary Scott Bessent emphasized that dollar-backed stablecoins are viewed as a strategic tool to help preserve the U.S. dollar’s role as the world’s reserve currency. Within the administration, David Sacks has identified the creation of a stablecoin regulatory framework as a top priority, aligning closely with current legislative efforts in Congress.
This marks a significant shift in tone from past years. Rather than defaulting to enforcement or ambiguity, the federal government is now signaling active support for a regulated, innovation-friendly future—one in which stablecoins can be safely integrated into the financial system at scale.
The market is already responding. Fidelity Investments, one of the world’s largest asset managers, recently announced plans to launch its own stablecoin as part of its digital assets initiative—an early sign that institutional players see this policy shift as actionable, not just rhetorical.
While the current administration has taken a strong stance in support of private-sector stablecoin innovation, this moment is bigger than any one presidency. If regulators and legislators establish sound, transparent frameworks now, the benefits—faster payments, greater financial inclusion, and a stronger digital dollar—can endure across administrations.
Why Clear Rules Matter for Enterprises and Financial institutions
The recent wave of federal proposals—from the GENIUS Act to the Stablecoin TRUST Act—isn’t just about political consensus. It’s about enabling the next wave of adoption—by making stablecoins usable at scale for the institutions that need them most.
Because for most enterprises and financial institutions, the barrier to adoption isn't just technology—the regulatory risk is a major consideration.
Finance teams and infrastructure providers are already exploring stablecoins to streamline cross-border payments, improve capital efficiency, power loyalty programs, and modernize settlement. But meaningful adoption can’t happen until a few core questions are answered with confidence:
Even as market demand grows and the technical rails become more sophisticated, many institutions are still sitting on the sidelines. And it’s not because they don’t see the opportunity. It’s because the rules remain unclear.
This is why regulation matters. Not as a constraint—but as a gateway. When the rules are clear, the risk is reduced. And when the risk is reduced, stablecoins move from speculative tools to serious financial infrastructure.
As lawmakers in the US move toward a national framework and institutions begin to re-engage, one question rises to the top: Who’s ready now?
At Bastion, regulatory alignment isn’t a future goal—it’s a founding principle. We already operate under the supervision of the New York Department of Financial Services (NYDFS), one of the most respected and rigorous regulatory regimes in the world. That means the safeguards now being debated in Congress—such as 1:1 reserve backing, redemption guarantees, monthly attestations, and strict custody standards—are already core to how we operate.
But we believe regulation should do more than protect. It should enable.
That’s why we support thoughtful frameworks that:
The right regulatory design doesn’t force a trade-off between compliance and capability. It’s what makes scale possible. It’s what turns trust into growth. And it’s what gives institutions the confidence to engage not just with stablecoins—but with the future of programmable finance itself.
That’s the foundation Bastion was built on. And it’s why we’re not just adapting to this moment—we’re ready to help define what comes next.
With multiple federal proposals advancing, strong executive support, and new state-level frameworks in place, the United States is entering a critical phase in the development of stablecoin regulation.
For enterprises and financial institutions, this progress brings long-awaited momentum toward legal and operational clarity. Key questions—around licensing, oversight, reserve requirements, and permissible use cases—are now being addressed in ways that could enable broader adoption across financial services, payments, and treasury operations.
The details of these frameworks will shape how stablecoins are issued, integrated, and scaled in institutional settings. Businesses exploring stablecoin use will need to monitor these developments closely to assess their timing, risk exposure, and implementation pathways.
For institutional leaders, the priority now is preparation. The regulatory environment is changing. Planning accordingly is essential.