S&P: Lack of Regulation Stalling U.S. Stablecoin Adoption
The widespread adoption of stablecoins in the U.S. is being held back by regulatory uncertainty, but clearer guidelines could unlock institutional use, according to a Wednesday report from S&P Global Ratings.
“The absence of a defined regulatory framework remains a key challenge for stablecoin adoption in the U.S., limiting their integration into mainstream financial systems,” analysts led by Mohamed Damak wrote.
Stablecoins, which are digital assets pegged to traditional currencies like the U.S. dollar or gold, play a crucial role in cryptocurrency markets and cross-border payments. However, regulatory ambiguity has kept large institutions on the sidelines.
New legislation is in the works. The Senate’s GENIUS Act proposes federal regulation for stablecoins with a market cap above $10 billion, while the House’s STABLE Act would allow state-level oversight with fewer federal restrictions.
S&P expects a shift towards regulated stablecoins once rules are in place, which could reshape market dynamics and increase trust in the sector.
“As stablecoins become more embedded in digital transactions, they could serve as a hedge against monetary instability in emerging markets or a reliable means for receiving payments,” the report noted.
Meanwhile, JPMorgan (JPM) recently warned that Tether (USDT), the dominant stablecoin issuer, may face regulatory challenges under proposed U.S. laws, potentially disrupting its market position.
