Digital Asset and Stablecoin Regulation: U.S. Faster Payments are Shaping the Future

FPC Digital Assets Work Group

Background and Context

The digital asset market, encompassing cryptocurrencies like Bitcoin and Ethereum, stablecoins, and tokenized assets, has grown significantly since Bitcoin’s inception in 2008. By early 2025, the global market capitalization of cryptocurrencies exceeded $3 trillion, driven by institutional interest, technological advancements, and broader use cases like payments and decentralized finance (DeFi).

Bitcoin and Ethereum continue to dominate the ecosystem, while stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) played a crucial role in facilitating over $100 billion in daily transaction volume in 2024.[1] The total stablecoin transaction volume reached an impressive $27.6 trillion in 2024, reflecting stablecoins’ vital role as a gateway between crypto and fiat systems.[2]

Rapid market growth has been fueled by rising retail and institutional adoption. U.S.-based crypto exchanges like Coinbase and Kraken are now managing billions in monthly trading volume. The SEC’s approval of Bitcoin and Ethereum ETFs in 2023 and 2024 marked a significant milestone, legitimizing digital assets as “investable” instruments. Stablecoin usage has surged, with U.S.-based issuers like Circle (USDC) and Paxos also managing billions in circulation. This activity is supported by regulatory efforts like the Clarity for Payment Stablecoins Act of 2023 (H.R. 4766).

Adoption by traditional finance in the U.S. has accelerated as banks and financial institutions integrate digital assets and related technologies into their offerings. Major banks like JPMorgan Chase (Kinexys) and BNY Mellon (custody services) are embedding blockchain and crypto solutions into payments, custody, and trading. Credit unions, such as UNIFY Financial and Premier America, partner with firms like NYDIG and Investifi to offer digital asset services to members. Institutional giants like Fidelity and Goldman Sachs provide trading and lending options, while cross-border payment innovations (e.g., Santander with Ripple) highlight practical applications.

The U.S. Faster Payments Taskforce, established in 2015 and led by the Federal Reserve, sought to modernize the payment system for speed, efficiency, and accessibility[3]. Stablecoins with their ability to operate 24x7x365 and provide real-time, instant settlement with finality, solve many of the challenges plaguing U.S. payment systems, and could be pivotal to bridging traditional finance and digital assets, leading to the acceleration of faster payments.

Regulatory developments, like the proposed STABLE Act and GENIUS Act, signal growing acceptance of digital assets, and aim to legitimize and integrate stablecoins into the traditional financial ecosystem.

                                         
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Current Regulatory Environment

While the Trump administration has catalyzed much of the recent pro-crypto regulatory momentum, significant bipartisan efforts under both the Trump and Biden administrations have laid the groundwork for advancing stablecoin legislation, reflecting a shared commitment to balancing innovation and oversight.

The U.S. regulatory landscape is shifting to a pro digital asset stance, with several significant developments:
  • President Trump’s Executive Order on Digital Assets: This groundbreaking executive order issued early 2025, promotes lawful digital asset use, preserves U.S.-dollar sovereignty, and bans a U.S. Central Bank Digital Currency (CBDC). The order is a boon for crypto enthusiasts, allowing for mining, self-custody, open banking access for crypto, and establishes a crypto advisory council to advocate for industry priorities (the Presidential Working Group on Digital Asset Markets). This order sets a pro-crypto tone, crucial for stablecoin adoption.[5]

  • U.S. Securities and Exchange Commission’s (SEC) Repeal of SAB 121: On January 23, 2025, the SEC issued Staff Accounting Bulletin No. 122 (SAB 122), which rescinds the interpretive guidance included in SAB 121. This decision comes after extensive feedback from stakeholders, including major banks and cryptocurrency firms, and has significant implications for companies involved in safeguarding digital assets. The repeal, effective in early 2025, eliminates the burdensome requirement for banks to treat digital assets as liabilities, thereby reducing capital reserve obligations. This makes crypto custody more financially viable, encouraging bank involvement. This repeal is a lifeline for stablecoin issuers needing banking partnerships.[6]

  • SEC Pro Crypto Stance: With new leadership on the horizon, including potential appointees like Paul Atkins and David Sacks, the SEC is signaling a transformative shift towards a more supportive environment for digital assets. Under this new regime, Commissioner Hester Peirce’s Crypto Task Force is likely to clarify rules, foster innovation and reduce regulatory uncertainty for stablecoins.
     
  • Proposed Interpretive Rule: Recently issued by the Consumer Financial Protection Bureau (CFPB), this proposed interpretive rule aims to clarify how the Electronic Fund Transfer Act (EFTA) and Regulation E apply to emerging payment mechanisms, such as stablecoins and other digital assets used as a medium of exchange or for paying for goods and services.[7]  By addressing ambiguities in existing regulations, the CFPB is setting the stage for a more inclusive and innovative financial ecosystem.
     
  • Reversal of the Biden Administration's DeFi Broker Rule: The IRS broker rule which would have forced providers of non-custodial software to implement Know Your Customer (KYC) protocols.[8]

  • Ending Operation Choke Point 2.0: Rumored stealth banking actions have previously affected banks’ risk management of crypto. However, President Trump’s executive order has turned the tide, ensuring open banking services for the crypto industry. Further, recent Senate hearings have addressed debanking issues and enhanced access for crypto businesses. These developments are vital for stablecoin issuers, who rely heavily on robust banking infrastructure.
     
  • Federal Deposit Insurance Corporation (FDIC) Reevaluation: On March 28, 2025, the Feder Deposit Insurance Corporation (FDIC) provided new guidance saying that FDIC-supervised institutions can engage in crypto-related activities without receiving prior FDIC approval, provided they adequately manage the associated risks.[9]
     
  • Sovereign Wealth Fund & Strategic Bitcoin Reserve: Discussions are under way of a U.S. sovereign wealth fund or strategic Bitcoin reserve, of which could legitimize digital assets, encouraging banks to include them in strategies. This could lead to increased institutional investment, global coordination, and market confidence, indirectly supporting stablecoins.
     
  • Changes in Financial Accounting Standards Board (FASB) Accounting Rules: Effective in 2025, a change in FASB Accounting Rules require cryptocurrencies to be reported at Fair Market Value (FMV) in net income, replacing outdated rules that locked in permanent impairments. This shift is set to transform financial reporting, enhance transparency and provide a more accurate reflection of an entity's financial health.[10] This new methodology may prove easier for stablecoin issuers to present accurate and up-to-date valuations.
     
  • Passage of FIT21: The Financial Innovation and Technology for the 21st Century Act, passed by the House in 2024, provides a comprehensive framework, clarifying SEC and Commodity Futures Trading Commission (CFTC) roles. It defines when digital assets are commodities or securities, offering exemptions and new regulations for intermediaries, setting a precedent for stablecoin regulation.
     
  • National Credit Union Administration (NCUA) Leadership Change: NCUA Chairman, Kyle Hauptman, is longtime supporter of digital assets, blockchain, and related technologies. During his tenure as NCUA Vice Chairperson, he released multiple supportive guidelines for credit unions related to digital assets.
     
  • Office of the Comptroller of the Currency Leadership Change: Rodney E. Hood currently serves as Acting Comptroller of the Currency and is a longtime advocate for innovation and technology as tools to promote financial inclusion. Under his leadership the agency published Interpretive Letter 1183, rescinding its previous policy on bank engagement with cryptocurrency “to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system,” according to an agency statement.[11]
Stablecoin Regulation

Stablecoins are modernizing payment systems and taking center stage under the new Trump Administration. Regulatory development in this arena focuses on stablecoins that are pegged to the U.S. dollar, and deemed pivotal to faster, more efficient transactions, bridging traditional finance and digital assets.

Stablecoins are typically issued by nonbank entities, can be backed by a variety of reserves, and operate on public blockchains. Historically, stablecoins have been widely used in crypto trading and liquidity management, providing a stable medium of exchange and a hedge against volatility. In DeFi, stablecoins enable lending, borrowing, and yield farming, acting as a bridge between traditional finance and blockchain ecosystems.

However, increasingly stablecoins play a growing role in cross-border payments and remittances, offering faster and cheaper transactions compared to conventional banking systems. Additionally, businesses and institutions are exploring stablecoins for real-time settlement, payroll processing, and tokenized financial services, enhancing efficiency in global finance.

Stablecoin regulation is nearing fruition, with bipartisan support evident in recent bills:
  • GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins): On February 4, 2025, the GENIUS Act was introduced by Senator Bill Hagerty, co-sponsored by Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks. The public discussion draft behind this bill was released in October 2024. This legislation defines payment stablecoins as digital assets for payment or settlement that are pegged to a fixed value, require one-to-one reserves and prohibits algorithmic stablecoins. The Act ensures payment stablecoins are not classified as securities and provides federal oversight for issuers above $10 billion and state regulation for smaller ones. Additionally, the Act mandates monthly reserve audits and AML compliance.[12]
  • STABLE Act (Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025): On February 6, 2025, House Financial Services Committee Chairperson French Hill and Subcommittee Chairman Bryan Steil unveiled a discussion draft of the STABLE Act. It was then introduced to the House floor on March 27th, 2025. This proposed legislation aims to establish a robust framework for dollar-denominated payment stablecoins, ensuring strong consumer protection and regulatory clarity. Key provisions include stringent reserve requirements and a federal-state oversight mechanism, with a notable two-year moratorium on algorithmic stablecoins. Unlike the GENIUS Act, which gives states primary authority with a federal backstop, the STABLE Act subordinates state oversight to federal guidelines. State-approved issuers operate under a "dual framework," but federal agencies retain ultimate supervisory power.[13]
Both acts build on earlier proposals, such as the McHenry Bill (Clarity for Payment Stablecoins Act of 2023) and the 2024 Lummis-Gillibrand Payment Stablecoin Act, focusing on consumer protection and maintaining U.S. dollar dominance. The rapid introduction and bipartisan support for these measures suggest a high likelihood of passage by mid-2025.

Comparative Table: GENIUS Act vs. STABLE Act

GENIUS Act (2025) STABLE Act of 2025
Introduction Date February 4, 2025 (Senate) February 6, 2025 (House, discussion draft)
Sponsors Sens. Hagerty, Scott, Gillibrand, Lummis, Alsobrooks (bipartisan) Reps. French Hill, Bryan Steil (Republican-led)
Scope Payment stablecoins (fiat-backed only) Payment stablecoins (fiat-backed only)
Reserve Requirements 100% reserves in high-quality liquid assets (HQLA) 100% reserves in HQLA (e.g., cash, Treasuries, FDIC-insured deposits)
Transparency Regular audits and public reserve disclosures Monthly audits and public reserve disclosures
Algorithmic Stablecoins Outright ban Two-year moratorium, pending Treasury study
Permitted Issuers Banks and non-banks under state licenses Banks, OCC-approved nonbanks, state-approved issuers meeting federal standards
Primary Regulatory Oversight Tiered framework including Federal and State regulators Tiered framework including Federal and State regulators
Federal Role Backstop (Fed, OCC) for issuers over $10B or in crises Dominant, with direct supervision of all issuers
State Role Primary authority, with flexibility Subordinate to federal standards, limited autonomy
OCC Role Secondary, with Fed for large issuers or emergencies Primary for nonbank issuers
Federal Reserve Role Secondary oversight, provides Fed services Supervises banks, provides Fed services to all issuers
FDIC/NCUA Role Not emphasized Oversees state banks and credit unions, respectively
SEC Jurisdiction Explicitly excluded (stablecoins not securities) Not explicitly excluded, implied limited role
CFTC Jurisdiction Unclear, not emphasized Unclear, not emphasized
Consumer Protections Right to redemption at par, AML/KYC/BSA compliance,
Quarterly audit mandate		 Right to redemption at par, AML/KYC/BSA compliance
Fed Services Access Optional for issuers Mandatory access for permitted issuers
SAB 121 Restrictions Prohibits restrictive custodial rules Prohibits restrictive custodial rules
Implementation Timeline Not specified 180 days for federal agencies to finalize rules
Philosophical Approach Innovation-friendly, state-led, dollar dominance focus Stability-focused, federal-centric, transparency emphasis
Legislative Status Introduced bill, advancing in Senate Discussion draft, under House review

                                        
                                                                IMAGE SOURCE[14]

Market Structure Regulation

Market structure in the context of digital assets refers to the framework that governs how these assets are traded, including regulations for exchanges, broker-dealers, and other market participants. At the forefront of this evolving landscape are two primary bills:
  • Financial Innovation and Technology for the 21st Century Act (FIT21): Passed by the U.S. House of Representatives in May 2024 with a decisive vote of 279–136, FIT21 (H.R. 4763) represents a landmark effort to integrate digital asset regulation within the frameworks of the SEC and CFTC. This bill defines digital assets, establishes their classification as commodities or securities, and sets registration requirements for exchanges, broker-dealers, and custodians.
Key provisions include:
  • SEC. 106 mandates registration and compliance for digital commodity exchanges
  • SEC. 107 sets similar requirements for brokers, dealers, and trading systems.
  • SEC. 301–304 introduce enhanced disclosure standards and transparency measures.[15]
These provisions shape market structure by enforcing registration, ensuring competition, and strengthening consumer protections, fostering a more regulated and competitive environment for digital commodities.
  • Lummis-Gillibrand Responsible Financial Innovation Act: Reintroduced in July 2023, this bill proposes a comprehensive regulatory framework for digital assets, emphasizing consumer protection, innovation, and market transparency. It delineates the SEC and CFTC’s authority over digital assets, introduces stablecoin regulations, and addresses tax treatment and banking integration. The bill also establishes clear criteria for classifying digital assets as commodities or securities and enhances anti-money laundering (AML) and anonymous transaction standards, with some provisions incorporated into the 2024 National Defense Authorization Act. By defining regulatory roles and bolstering consumer protections, the bill seeks to create a structured, compliant market environment that reduces uncertainty and encourages institutional adoption.

Comparative Table: FIT21 vs. Lummis-Gillibrand RFIA
Aspect FIT21 Lummis-Gillibrand RFIA
Chamber House (passed May 2024) Senate (reintroduced July 2023)
Scope Comprehensive, integrates into SEC/CFTC Comprehensive, focuses on consumer protection
Key Provisions Registration, customer protection, definitions Jurisdiction clarity, stablecoin measures, tax
Current Status Passed House, pending Senate Pending, no bill number in 118th Congress
Impact on Market Structure Regulates exchanges, brokers, trading systems Defines roles, reduces regulatory uncertainty

Predictions for the Next 6-12 Months

                                  

The evolving regulatory environment, particularly stablecoin and market structure legislation, positions digital assets and related technologies as key ingredients in U.S. Faster Payments, enhancing efficiency and accessibility. Predictions indicate significant progress within 6-12 months, aligning with modernization goals. These predictions include:

Stablecoin Bill Passage: Likely by mid-2025, with a compromise between the STABLE Act or GENIUS Act coming out of conference committee. Buttressed by Trump’s AI and Crypto Czar appointee, David Sacks's prioritization of stablecoin legislation, the administration is aiming for completion within six months (by mid-2025), emphasizing U.S. dollar dominance and innovation. Furthermore, the rapid bipartisan support observed, with bills like the Lummis-Gillibrand Payment Stablecoin Act (Lummis-Gillibrand Payment Stablecoin Act) introduced in April 2024, indicating strong legislative interest. Stablecoin passage might lead to increased adoption of stablecoins in payment systems in the United States by providing clarity to non-bank issuers like Circle (USDC) and Tether (USDT) and a pathway for banks and/or credit unions to issue stablecoins.[16]

Broader Market Structure Bill Passage is expected by the end of 2025, with a combination of FIT21 and the Lummis-Gillibrand RFIA coming out of conference committee, providing a comprehensive regulatory framework. Given FIT21’s passage in the House and the RFIA’s reintroduction, there is a high likelihood of progress.[17]

SEC and CFTC Agreement: By year-end, expect a clear delineation of regulatory responsibilities between the SEC and CFTC, with definitions of commodities and securities, benefiting stablecoins as non-securities and reducing regulatory uncertainty. This aligns with the user’s speculation and recent pro-crypto stances, such as Trump’s Executive Order banning a U.S. CBDC and promoting digital assets.[18]

Conclusion

The digital asset market, exceeding $3 trillion in early 2025, has matured significantly since 2009, with Bitcoin, Ethereum, and stablecoins driving growth through institutional adoption and innovations like DeFi and payments. Stablecoins, facilitating trillions in transactions, bridge crypto and fiat systems, gaining traction in traditional finance via banks and ETF approvals. The U.S. regulatory shift bolstered by Trump’s pro-crypto Executive Order, the repeal of SAB 121, and bills like the GENIUS and STABLE Acts, supports this evolution, aligning with the Federal Reserve’s Faster Payments goals. By mid-2025, anticipated stablecoin and market structure legislation (e.g., FIT21) will clarify rules, boost adoption, and cement U.S. leadership, integrating digital assets into a faster, more inclusive financial future.

Acknowledgements

Digital Assets in the Financial Industry Work Group
Thank you to the members of the FPC Digital Assets Work Group (DAWG) who contributed to this blog.

Digital Assets Work Group Leadership
Avenue B Consulting, Inc.                               Bo Berg (Work Group Chair)
Avenue B Consulting, Inc.                               Maria Arminio (Work Group Facilitator)

Digital Assets Subgroup Contributors
1st Source Bank                                               Alison Tusing
Nacha                                                               Mark Dixon
Nickel Shine LLC                                              Michael Curry
Strategic Resource Management Inc. (SRM)   Larry Pruss

Digital Assets Overall Work Group Contributors
AFM Consulting LLC                                        Aaron McPherson 
Bates Group LLC                                             Brandi Reynolds
Catalyst Corporate Federal Credit Union         Mark Keeling
Payments as a Lifeline                                     Kirsten Trusko
PTap Advisory, LLC                                          Peter Tapling                                               
Serio Payments Consulting                              Anthony Serio (Editorial Review)
Treasury Solutions Info Tech LLC                    Patricia Gallagher
Velera                                                               Lou Grilli
Vments                                                             Steve Wasserman

About the Digital Assets in the Financial Industry Work Group
Maps out how digital assets relate to the financial industry, focusing specifically on payments made with digital funds – central bank digital currency (CBDC), regulated liabilities and stablecoin.

About the U.S. Faster Payments Council
The U.S. Faster Payments Council (FPC) is an industry-led membership organization whose vision is a world-class payment system where Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. By design, the FPC encourages a diverse range of perspectives and is open to all stakeholders in the U.S. payment system. Guided by principles of fairness, inclusiveness, flexibility, and transparency, the FPC uses collaborative, problem-solving approaches to resolve the issues that are inhibiting broad faster payments adoption in this country.
[18] The prediction is a reasoned inference grounded in documented legislation (FIT21, GENIUS, STABLE), Trump’s Executive Order (White House, January 23, 2025), and commentary from legal and financial outlets through March 2025.

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