Shares of Circle surged again on Friday, gaining another 14% in pre-market trading. This comes after a 33% rally earlier in the week following the Senate’s passage of the GENIUS Act. With momentum building, Circle is on track to close the week nearly 50% higher, and its stock has skyrocketed more than 500% since its IPO on June 5.

Market Responds to Regulatory Optimism

The legislation in question, known as the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), is designed to establish a clear regulatory structure for the issuance and management of U.S.-based stablecoins. The bill outlines standards for reserves, transparency, and compliance—elements long demanded by institutional investors and fintech firms.

If passed by the House of Representatives, this legislation would mark the first comprehensive stablecoin framework in U.S. history. Another bill, the STABLE Act, is also under discussion in the House, pointing to a growing consensus in Washington about the future of digital payments.

Big Tech Eyes Stablecoin Potential

The excitement isn’t limited to crypto-native companies. Industry reports suggest that global tech and retail giants—including Amazon, Walmart, Uber, Apple, and Airbnb—are actively exploring stablecoin integration or issuance. These companies see stablecoins as a powerful tool to enable faster, cheaper, and borderless transactions.

As regulation becomes clearer, the road opens for stablecoins to become a key component of modern financial infrastructure—well beyond crypto exchanges and DeFi protocols.

Stablecoins Poised to Reshape Finance

The GENIUS Act could be the catalyst that transforms stablecoins from niche trading tools into mainstream financial instruments. By lowering transaction costs and improving speed, they hold the potential to revolutionize e-commerce, global remittances, and point-of-sale payments.

As Circle continues its strong market performance, it also symbolizes a broader shift toward institutional confidence in digital assets. With strong legislative support, the stablecoin sector appears ready for its next phase of adoption.

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On April 24, the Fed revoked its 2022 supervisory letter, which had warned financial institutions about the risks of cryptocurrencies and discouraged direct involvement in the space. This move has been widely seen as a positive shift for the broader crypto ecosystem, particularly for institutional adoption.

That now-defunct guidance had cautioned that digital assets might threaten investor safety and financial stability. However, with its withdrawal, U.S. banks are now free to offer Bitcoin-related services, paving the way for a potential flood of institutional interest.

Michael Saylor, co-founder of MicroStrategy and a vocal Bitcoin advocate, celebrated the development by stating that banks are “now free to support Bitcoin.”

Institutional Onboarding Gets a Boost

Anastasija Plotnikova, CEO of blockchain compliance firm Fideum, described the policy reversal as a major milestone for institutional involvement. She noted that crypto assets will now be monitored through standard supervisory mechanisms, aligning them more closely with traditional financial instruments.

Plotnikova also emphasized the importance of regulatory clarity through legislation. She pointed to two key bills currently under discussion in Washington — the STABLE Act and the GENIUS Act — as crucial to building a coherent regulatory environment for digital assets.

• The STABLE Act aims to provide clear rules for USD-pegged stablecoins and passed the House Financial Services Committee on April 2 with a 32–17 vote.

• The GENIUS Act, focused on fostering innovation for U.S. stablecoins, was approved by the Senate Banking Committee on March 13 with a vote of 18–6.

Traditional Finance Steps Into the Crypto Arena

According to Eneko Knörr, CEO of stablecoin project Stabolut, the Fed’s updated stance could serve as a turning point for institutional engagement. “The previous regulatory hostility essentially kept most major banks out of crypto,” he said.

With the restrictions lifted, Knörr expects traditional banks to act quickly in order to meet growing client demand and reclaim market share from crypto-native firms like Coinbase.

Europe Still Playing Catch-Up

While the U.S. may be opening the floodgates for institutional Bitcoin adoption, European banks remain cautious. Despite clearer regulations across the EU, less than 20% of banks in the region currently offer crypto services.

The Federal Reserve’s policy reversal not only signals a new chapter for U.S. financial institutions but also marks a notable shift in regulatory sentiment — one that could reshape the global crypto landscape in the months ahead.

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A company spokesperson stated, “This is an area Coinbase is actively exploring, though no final decision has been made yet.”

Other Crypto Firms Also Eyeing the Banking Sector

Recent reports suggest that Coinbase, along with major players like Circle, Paxos, and custody provider BitGo, may also be preparing to apply for a similar banking license in the US.

While Coinbase has not disclosed the exact reasons behind this potential move, such a license would enable crypto firms to offer traditional banking services, including accepting deposits and issuing loans. On the other hand, holding a federal charter would also bring tighter regulatory requirements and more rigorous reporting obligations.

A relevant example is Anchorage Digital, which already operates under a federal banking license. Despite this, Anchorage Digital Bank has recently come under investigation by the US Department of Homeland Security’s El Dorado Task Force.

Regulatory Landscape Shifting, Interest Increasing

These developments follow the preliminary approval granted by the US Office of the Comptroller of the Currency to Paxos back in 2021. The current more accommodating stance of US regulators and the growing willingness to integrate stablecoins into the broader financial system have prompted more crypto firms to consider applying for such licenses.

Federal Reserve Chair Jerome Powell recently emphasized that with the mainstream adoption of digital assets, it is a “sensible step” to establish a legal framework for stablecoins, noting that crypto has demonstrated consumer use cases with significant appeal.

Stablecoin Regulations Gaining Momentum

In April, the US House Financial Services Committee approved the Republican-backed Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, which aims to subject stablecoin issuers to stricter oversight.

Additionally, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act is progressing through the legislative process. While both bills seek to regulate the stablecoin space, they offer differing approaches.

The GENIUS Act focuses on establishing a legal structure for stablecoin payments and enhancing the global status of the US dollar. It also introduces requirements related to anti-money laundering, liquidity standards, and sanctions compliance.

Meanwhile, the STABLE Act proposes a two-year moratorium on issuing collateral-backed stablecoins linked to self-issued digital assets, and mandates that reserves be held separately from company funds.

As crypto regulation continues to evolve in the United States, Coinbase’s interest in a banking license underscores the accelerating convergence of digital assets and traditional finance.

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ECB Raises Concerns Over Dollar-Backed Stablecoins

According to a policy document reviewed by Politico, the ECB has suggested a reassessment of the Markets in Crypto-Assets (MiCA) regulatory framework. The primary concern stems from new crypto-related legislation supported by US President Donald Trump, which may lead to an influx of dollar-pegged stablecoins into the European market.

The ECB argues that such a scenario could prompt European capital to shift toward US assets, undermining the EU’s financial sovereignty and exposing banks to liquidity risks.

Diverging Views Among EU Institutions on MiCA

While the ECB pushes for tighter regulations, the European Commission considers these concerns overstated. According to the report, some EU diplomats and officials believe the current MiCA rules are robust enough to address stablecoin-related risks.

New bills introduced in the US—STABLE (Stablecoin Transparency and Accountability for a Better Ledger Economy) and GENIUS (Guiding and Establishing National Innovation for US Stablecoins)—are expected to expand America’s presence in the global crypto market. Still, the Commission maintains that these developments alone do not warrant immediate regulatory changes in Europe.

One diplomat stated, “The Commission was very clear on this; most countries are not in favor of rushing into changes based solely on these developments.”

What’s Next?

As the ECB emphasizes the need to adapt regulations to protect the EU’s financial structure, and the Commission urges caution, the future of European crypto policy may hinge on how these internal disagreements unfold. The debate highlights the growing complexity of balancing innovation and regulation in a rapidly evolving global crypto landscape.

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A System Reaching Critical Mass

In its April 15, 2025 report, BIS noted that crypto and DeFi have reached “critical mass” in terms of capital and users, posing growing regulatory and economic concerns.

Stablecoins, in particular, have become essential to crypto value transfers. However, the report argues they need stricter rules to guarantee dollar redemptions during market stress.

Urging Stronger Regulation

BIS supports efforts like the STABLE Act passed in the U.S. House Financial Services Committee, which aims to enhance transparency and consumer protection in the stablecoin sector.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

The GENIUS Act, also mentioned, seeks to enforce collateral requirements and Anti-Money Laundering compliance among stablecoin issuers.

Rich Get Richer?

Citing events like the 2022 FTX collapse, BIS warned that crypto often functions as a wealth transfer mechanism from small investors to large holders (“whales”).

“Retail users were buying while whales were selling — this is not financial inclusion, it’s reverse redistribution,” the report said.

Though similar in economic function to TradFi, DeFi’s unique traits — like smart contracts and modular design — require proactive, specialized regulation to avoid systemic risks.

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What Did MoonPay CEO Soto-Wright Say?

In a post on X dated April 18, Soto-Wright urged Congress to “leave a path for state-regulated issuers to remain in the system.” His remarks came amid discussions on two bills: the GENIUS Act in the Senate and the STABLE Act in the House.

Soto-Wright emphasized, “Although the crypto industry has long demanded federal regulation, it’s been the state regulators who have truly provided regulatory clarity, ensured consumer protection, and enabled the sector’s growth.” He underlined that the role of state authorities should not be underestimated.

As federal legislation nears completion, the MoonPay CEO stressed the importance of maintaining a viable route for permitted stablecoin issuers (PSIs) under state oversight. According to him, these issuers should be treated on equal terms with their federally regulated counterparts.

Similar Message from State Bank Supervisors

The Conference of State Bank Supervisors (CSBS) echoed similar concerns, sending a letter to the House Financial Services Committee on April 1, advocating for a continued state-based regulatory framework. Both the Senate Banking Committee and the House Financial Services Committee advanced the respective bills in March and April, moving them toward a full chamber vote.

The STABLE Act in the House, modeled after the GENIUS Act in the Senate, aims to regulate payment stablecoins by limiting them to “permitted payment stablecoin issuers,” while allowing participation from “state-qualified” entities. However, Soto-Wright argued that the GENIUS Act “stacks the deck” in favor of federal regulators and designates the Federal Reserve as the sole federal regulator for all state PSIs.

Trump-Backed Stablecoin Project Sparks Controversy

While it remains unclear whether these bills will pass both chambers of Congress, a new stablecoin initiative backed by U.S. President Donald Trump and his family has stirred further debate. The project has raised concerns about potential conflicts of interest, which could complicate the legislative process.

Launched in September 2024 by a firm called World Liberty Financial, the initiative has already attracted around $600 million in investment, mostly through token sales. Major backers include Tron founder Justin Sun, market maker DWF Labs, venture firm Oddiyana Ventures, and investment platform Web3Port. As of March 24, the project’s stablecoin, named USD1, was not yet tradable.

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US Stablecoins: A Quiet but Serious Threat

Speaking at an event in Milan, Giorgetti emphasized that US stablecoins are rapidly gaining popularity among European citizens. These assets allow users to make cross-border transactions without opening a US bank account, which he says could undermine Europe’s financial sovereignty.

“Tariffs may grab the headlines, but the real risk lies elsewhere. These digital assets seriously threaten the euro’s position in international payment systems.” – Giancarlo Giorgetti

Digital Euro: Europe’s Native Alternative

Giorgetti also underlined the importance of the digital euro project developed by the European Central Bank (ECB). He stated that this initiative is a strategic step to prevent Europeans from relying on foreign digital solutions.

The digital euro aims to strengthen Europe’s financial independence in both everyday transactions and international payments.

US Moves Toward Stablecoin Regulation

While a comprehensive legal framework for stablecoins is still lacking in the US, significant steps are being taken:

• The STABLE Act (Stablecoin Transparency and Accountability for a Better Ledger Economy) would require stablecoin issuers to disclose information about their reserves and financial operations.

• The GENIUS Act proposes that issuers must maintain one-to-one asset backing, comply with Anti-Money Laundering (AML) regulations, and protect consumer rights.

Both bills are awaiting votes in the US Congress. If passed, they would bring a more structured and transparent environment for stablecoins.

ECB Warns: “Monetary Sovereignty at Risk”

Piero Cipollone, Executive Board Member of the ECB, echoed Giorgetti’s concerns. In a recent article, he pointed out the long-term risks of US dollar-backed stablecoins gaining ground in Europe.

According to Cipollone, the introduction of a central bank digital currency (CBDC) like the digital euro is crucial to safeguard the eurozone’s monetary sovereignty.

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