Stablecoin Market Expands 20% as Regulations and Institutional Support Grow
2min read Increasing institutional interest and moves toward legal frameworks for stablecoins have seen the space grow, with five major projects slated to expand the market in the near future. In the European Union, the Markets in Crypto-Assets (MiCA) regulatory package is in full force and has given stablecoin issuers clear guidelines by which they can enter European markets. In the United States, the STABLE Act and the GENIUS Act, which would provide rules for stablecoins, are making their way through Congress. As a result, major payments firms like mastercard and visa are stepping up support for stablecoin systems, and new coins have appeared, boosting the overall market capitalization of the stablecoin market.
Tether, the largest stablecoin on the market, is eyeing a relaunch in the United States with a dollar-based stablecoin. Tether’s USDt (USDT) provides liquidity to crypto trading pairs on numerous exchanges. However, Tether has faced regulatory scrutiny over proof of its reserves, financial transparency, and Anti-Money Laundering concerns. In an April 30 interview, Tether CEO Paolo Ardoino announced that the firm wants to launch a rebranded coin in the United States, separate from its ubiquitous international stablecoin. This move would give Tether access to U.S. financial markets as the latter’s exposure to crypto widens.
At the beginning of March, world liberty financial (WLFI), the cryptocurrency project tied to the Trump family, launched its dollar-backed stablecoin, USD1, on the BNB Chain and Ethereum. The stablecoins follow other high-profile crypto projects that use the president’s personal brand as a marketing tool. Trump’s ability to influence stablecoin policy has led a group of U.S. senators to call for an inquiry into his personal interests in the project, calling it a clear conflict of interest.
Two U.S. banks, the crypto-friendly Custodia Bank and the Texas-based Vantage Bank, have entered a partnership to issue the supposed first bank-issued stablecoin in the U.S., UK and Europe. On March 25, Custodia stated that it tokenized U.S. dollar demand deposits on the Ethereum blockchain as an ERC-20 standard token called Avit. Custodia CEO and crypto advocate Caitlin Long said that Avit is a “real dollar” in that it tokenizes funds that customers can withdraw on demand, like checking account deposits.
On April 28, Stripe CEO Patrick Collison announced that his global payments platform was working on a U.S.-dollar-based stablecoin product for use outside the U.S. The move comes after it received approval to acquire stablecoin payments network Bridge in a $1-billion deal in October 2024, a deal which it completed in February 2025. Bridge was founded by two former Coinbase executives, Zach Abrams and Sean Yu, in 2022 and competes with firms using the ubiquitous SWIFT global payments system. The stablecoin initiative is the latest development in the firm’s expanding crypto plans.
Abu Dhabi’s International Holding Company, Abu Dhabi Developmental Holding and First Abu Dhabi Bank (FAB) partnered to launch a dirham-backed stablecoin on April 28. According to The National, FAB — the largest bank in the UAE — will issue the stablecoin on the ADI network pending approval from the central bank. The ADI network is a project of the ADI Foundation in Abu Dhabi, which itself is a nonprofit organization founded by Sirius International Holding, a local holding firm. The firms claim that the stablecoin will “have a significant impact on various industries, including finance, commerce, and trade.”
New stablecoin issuances are picking up the pace, and payments firms, banks and financial institutions are adding support for them as well. On April 28, international payments giant Mastercard partnered with OKX to expand its stablecoin card options, which allow cardholders to spend stablecoins through their Mastercard linked with prominent crypto firms. Two days later, Visa announced that it partnered with Stripe and Bridge on April 30 to offer stablecoin payments on its network in Latin America, starting with Argentina, Colombia, Ecuador, Mexico, Peru and Chile. SBI VC Trade, the cryptocurrency subsidiary of the Japanese financial conglomerate SBI, said it was preparing to add support for USDC after local regulators softened their approach to foreign stablecoins. Pending formal approval, the trading platform will be one of the first in Japan to offer cryptocurrency trading in USDC.
Regulators and payments providers worldwide are warming up to stablecoins. U.S. lawmakers have yet to vote on the aforementioned crypto bills, but if the stablecoin frameworks pass, adoption is set to take off as firms gain access to a large financial market with clear guidelines.
