tl;dr
The STABLE Act aims to create a federal regulatory framework for payment stablecoins, restricting issuance to licensed entities and requiring full backing with cash or short-term Treasury securities. This legislation is expected to benefit major US regulated financial and crypto firms such as Coinba...
The STABLE Act is set to reshape the US stablecoin landscape by creating significant regulatory advantages for established financial and crypto firms. Major players such as Coinbase, PayPal, Visa, Mastercard, BNY Mellon, and BlackRock stand to benefit as the Act favors licensed stablecoin issuers and compliant infrastructure, effectively crafting a regulatory moat for these institutions.
This legislation mandates that payment stablecoins be issued only by licensed entities and backed fully by cash or short-term Treasury securities. This clear federal framework opens doors for traditional financial institutions and payment companies to expand stablecoin-enabled services, meeting the rising demand for custody, liquidity, and compliance solutions.
International companies like Payoneer, MUFG, and Nomura may leverage compliant stablecoin infrastructure to facilitate cross-border US dollar transfers, further integrating global finance with regulatory clarity. Conversely, decentralized stablecoins such as DAI, crvUSD, and GHO face curtailed roles within the US market and may pivot offshore or operate in ambiguous legal territories.
Decentralized finance (DeFi) protocols and exchanges will need to pivot towards compliant stablecoins under the Act’s strictures. This includes adjusting to the ban on direct interest payments to stablecoin holders, which disadvantages yield-bearing stablecoins like Origin Dollar (OUSD). Instead, the market may tilt towards tokenized money market funds and compliant lending products, signaling a new era for DeFi operations in the US.
Payment firms like PayPal, which launched PYUSD, and card networks Visa and Mastercard, previously experimenting with stablecoin settlement, are positioned to deepen stablecoin integration into payments and settlement systems. Custodians such as BNY Mellon and State Street, along with infrastructure providers like Nasdaq, will benefit from increased demand for compliant custody and treasury services.
Asset managers, notably BlackRock and Charles Schwab, stand to gain indirectly as reserves backing regulated stablecoins flow into government money market funds. This reshaping of capital flows reinforces the symbiosis between traditional finance and the emerging stablecoin ecosystem.
Overall, the STABLE Act is expected to solidify the dominance of regulated financial firms in the US stablecoin market, thereby reshaping industry dynamics, fostering compliance, and potentially sidelining decentralized alternatives that don't meet the new legal standards.