BlackRock positions stablecoins as cornerstone of finance, citing U.S. regulatory clarity and 7% crypto market share

BlackRock, the world’s largest asset manager, has positioned stablecoins as a cornerstone of the “future of finance,” attributing this potential to recent U.S. regulatory clarity under the GENIUS Act. The firm’s July 28 report, published by the BlackRock Investment Institute, underscores that the legislation establishes a federal framework for stablecoins—digital tokens pegged to fiat currencies—transforming them from speculative assets into mainstream payment tools [1]. By mandating that stablecoins be fully backed by safe, liquid reserves such as cash, short-term Treasury bills, and money market funds, the law addresses longstanding concerns about transparency and systemic risk [2]. BlackRock argues this structure aligns stablecoins with traditional financial standards, enabling their use in cross-border transactions and real-time settlements while reinforcing the U.S. dollar’s role in global commerce [3].

The firm highlights the rapid adoption of stablecoins, which have grown to $250 billion in market value since 2020, accounting for roughly 7% of the broader crypto market [4]. This growth is driven by major issuers like Tether and Circle, which hold at least $120 billion in U.S. Treasury bills—a small fraction of the $6 trillion in bills outstanding [5]. BlackRock notes that while stablecoin demand may expand, its impact on Treasury yields is expected to be minimal, as funds will likely shift from similar assets. The firm also emphasizes that the GENIUS Act bans interest on stablecoin balances, a restriction that could limit adoption in economies where attractive bank deposits are already available [6].

Globally, the U.S. regulatory approach is part of a broader competition for dominance in digital finance. China Hong Kong is positioning itself as a hub for stablecoin activity, while Europe explores a digital euro with safeguards to protect traditional banking systems [7]. BlackRock warns that if other jurisdictions permit interest-bearing stablecoins or develop central bank alternatives, the dollar’s influence in trade finance could face challenges. However, the firm suggests that U.S. policymakers could adapt by revisiting the interest ban in the future [8].

The regulatory shift has already reshaped market dynamics. The GENIUS Act, enacted earlier this month, has spurred heightened activity in Washington, D.C., as stakeholders navigate the new licensing and reserve requirements for stablecoin issuers [9]. By mandating audits and restricting issuance to federally regulated banks and state-chartered firms, the law aims to rebuild trust eroded by past misreporting and volatility. Analysts at Morningstar caution that challenges remain, including inconsistent enforcement across states and potential competition from decentralized finance (DeFi) protocols [10].

BlackRock’s advocacy for stablecoins reflects a broader industry trend toward digitizing payment infrastructure. The firm distinguishes stablecoins from bitcoin, which it views as a return driver for portfolios. Instead, stablecoins are framed as a utility for facilitating low-cost, instant transactions in sectors like remittances and e-commerce [11]. Despite this optimism, risks such as cybersecurity threats and regulatory fragmentation persist. BlackRock urges ongoing oversight to balance innovation with consumer protection, ensuring stablecoins fulfill their potential as a foundational element of modern finance [12].

The market’s response has been mixed. While some investors see the GENIUS Act as a catalyst for adoption, others remain wary of regulatory overreach. CoinCentral notes that BlackRock’s vision hinges on sustained clarity and technological resilience [13]. Meanwhile, the firm’s recent application for an Ethereum spot ETF—acknowledged by the SEC—signals its broader commitment to crypto innovation, though this effort is secondary to its stablecoin strategy [14].

In conclusion, BlackRock’s endorsement of stablecoins underscores their growing role in reshaping financial systems. The GENIUS Act’s focus on transparency and reserve adequacy is likely to bolster confidence, but the long-term success of stablecoins will depend on their ability to adapt to evolving market demands and global competition. As the U.S. solidifies its regulatory leadership, the stablecoin landscape remains a focal point for innovation and oversight.

[1] BlackRock Investment Institute, July 28 report (https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary)

[2] BlackRock Investment Institute, July 28 report (https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary)

[3] BlackRock Investment Institute, July 28 report (https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary)

[4] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[5] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[6] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[7] PANews (https://www.panewslab.com/en/articles/wwxh49s3)

[8] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[9] CryptoSlate (https://cryptoslate.com/global-stablecoin-searches-hit-all-time-high-with-washington-leading-traffic/)

[10] Morningstar (https://www.morningstar.com/news/marketwatch/20250729139/trumps-genius-act-made-stablecoins-safer-but-several-risks-remain-for-investors)

[11] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[12] Original article (https://cryptoslate.com/blackrock-says-clear-us-rulebook-turns-stablecoins-into-payment-method-of-the-future-of-finance/)

[13] CoinCentral (https://coincentral.com/blackrock-names-stablecoins-a-mega-force-in-future-global-finance/)

[14] Economic Times (https://m.economictimes.com/crypto-news-today-live-29-jul-2025/liveblog/122959972.cms)