STABLE Act Favors Established Crypto Players, Traditional Firms

The passage of the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act is set to significantly benefit major regulated players in the US financial and crypto sectors. The Act's licensing and reserve requirements create a regulatory environment that favors established institutions already aligned with US compliance standards. This regulatory framework is expected to create a competitive advantage for these institutions, as they are better positioned to meet the stringent requirements set by the Act.

Coinbase, a major player in the crypto industry, is predicted to be one of the biggest beneficiaries of the STABLE Act. As a significant distributor of USDC and a partner of Circle, Coinbase's model already aligns with the regulatory vision for fiat-backed stablecoins. The Act's requirements for full backing with cash or short-term Treasury securities are likely to increase demand for compliant storage solutions and liquidity consolidation, further benefiting Coinbase's custody and exchange operations.

Traditional financial firms are also poised to gain from the new legislation. Payment companies like PayPal, which issued PYUSD in collaboration with Paxos, can leverage the regulatory clarity to expand stablecoin-enabled payment services across various sectors, including peer-to-peer transfers, e-commerce, and cross-border transactions. Visa and Mastercard, which have previously piloted stablecoin settlement projects, could further integrate regulated stablecoins into their B2B payments, treasury management, and real-time settlement layers.

Traditional custodians, including BNY Mellon and State Street, as well as infrastructure providers like Nasdaq, are expected to benefit from the increased demand for custody and compliance services. BNY Mellon's relationship with Circle, managing USDC reserves, serves as a model for this emerging service line. Asset managers like BlackRock and Charles Schwab may also see indirect benefits as regulated stablecoin issuers park reserves in government money market funds, potentially increasing inflows to these firms.

International firms such as Payoneer, MUFG, and Nomura may also benefit from using compliant stablecoin infrastructure for cross-border US dollar-denominated transfers. However, decentralized stablecoins like DAI, crvUSD, and GHO, which do not meet the Act’s definition of payment stablecoins, face a diminished role within US markets. These tokens may shift activity offshore, explore legal workarounds, or operate in a regulatory gray zone. Lending protocols like Aave and Compound are expected to adapt by prioritizing compliant stablecoins in their US offerings, while DEXs like Uniswap and Curve may need to geofence or de-emphasize pools tied to non-compliant assets.

The STABLE Act also bans direct interest payments to stablecoin holders, restricting yield-bearing stablecoins like the Origin Dollar (OUSD) unless they register as securities with the SEC. As a result, the future stablecoin market may favor tokenized money market funds and compliant DeFi lending products. This shift could lead to a more regulated and stable environment for stablecoins, benefiting both traditional financial firms and established crypto players like Coinbase.