Stablecoins 2.0: The Regulatory Turning Point and Global Race for Dominance

The U.S. GENIUS Act, signed by President Donald Trump on July 18, 2025, has ushered in a new era of federal oversight for stablecoins, marking a pivotal moment for the crypto industry. With the world's largest economy now embracing dollar-pegged stablecoins, financial institutions and nations alike are scrambling to position themselves in this rapidly evolving landscape.

China, despite its 2021 crypto ban, is reconsidering its stance. A recent meeting in Hong Kong between Shanghai officials and local authorities explored the development of a yuan-backed stablecoin, leveraging the country's robust fintech infrastructure. "China's fintech ecosystem positions it as a potential powerhouse in blockchain-based payments," noted Nomy Research Analyst Aron Burke.

The digital yuan's international expansion, announced by People's Bank Director Pan Gongsheng at the Lujiazui Forum, signals China's ambition to compete in the stablecoin arena. As regulatory frameworks solidify globally, the battle for stablecoin supremacy is intensifying, with major players vying for dominance in this critical segment of the digital asset market.