the rise of stablecoins and their role in the next monetary shift

Across the globe, central banks are taking decisive steps to regulate stablecoins, aiming to prevent systemic shocks while enabling innovation.

The International Monetary Fund (IMF) recently warned that large-scale stablecoin adoption could accelerate currency substitution, particularly in countries with fragile monetary systems, undermining central banks’ control over local currency circulation.

The Bank of Canada have echoed similar concerns, insisting that stablecoins must be fully backed by high-quality liquid assets, including government bonds or treasury bills, to ensure stability and reliability in transactions.

Meanwhile, the US Federal Deposit Insurance Corporation (FDIC) has introduced its first GENIUS Act-based framework, outlining how banks can apply to issue stablecoins through regulated subsidiaries.

These measures reflect a growing recognition that stablecoins, if left unregulated, could disrupt monetary policy and financial stability.

Since the GENIUS Act was signed into law, stablecoin payments in the US have jumped 70%.

South Korea offers a contrasting perspective, where policymakers debate the “51% rule,” requiring stablecoin issuers to be majority-owned by licensed banks.

The proposal has sparked contention between regulators, favouring control and fintech advocates emphasising innovation, illustrating the delicate balance governments face between security and competitiveness.

In Europe and North America, similar frameworks are emerging, with authorities aiming to integrate stablecoins into existing financial infrastructure without stifling their utility.

Corporate adoption surges

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