U.S., Hong Kong Enact Global Stablecoin Regulations Shaping $250B Market

In 2025, U.S. President Donald Trump signed the GENIUS Act into law, establishing a comprehensive regulatory framework for stablecoins, which are cryptocurrencies pegged to fiat currencies like the U.S. dollar. The law mandates that stablecoin issuers fully back their coins with cash and short-term government bonds, bans yield-bearing stablecoins and lending activities, and imposes strict anti-money laundering and know-your-customer requirements with significant penalties for violations. This move aims to enhance financial stability, reinforce U.S. dollar dominance in digital payments, and provide legal clarity to the rapidly growing stablecoin market, currently valued at over $260 billion. Major U.S. banks, including Bank of America and Citibank, are preparing to launch stablecoins, anticipating more crypto-friendly regulations and client demand. Globally, Hong Kong has enacted its own Stablecoins Ordinance with different regulatory approaches, sparking a competitive dynamic between the U.S. and Hong Kong in stablecoin governance. These developments reflect a broader push by policymakers to integrate digital currencies into traditional finance while managing risks associated with digital asset markets.