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$270 bn stablecoin market gains global traction, from Trump’s USD1 to Japan’s JPYCOnce limited to crypto trading, stablecoins are now used for payments and dollar access worldwide, pushing them into mainstream finance. The surge has prompted governments from the US to Japan to roll out new regulatory frameworks.By Manisha Gupta   August 20, 2025, 1:28:27 PM IST (Published)2 Min ReadStablecoins have grown into a nearly $270 billion global market, offering a bridge between the world of cryptocurrencies and traditional finance. These digital tokens are pegged to the value of stable assets such as fiat currencies, gold, or other financial instruments.

Their use cases have expanded rapidly—from crypto trading and accessing the US dollar outside of the United States to payments for goods and services, which are now gaining significant traction.

Growing Regulatory Momentum

The regulatory landscape for stablecoins is evolving quickly. In the United States, President Donald Trump has signed the Genius Act, aimed at creating a regulatory regime for US dollar–pegged stablecoins. The State of Wyoming has also taken a step forward by launching the Frontier stablecoin on the Avalanche blockchain.

This momentum is not confined to the US; Hong Kong has introduced its own licensing and oversight framework, while Japan is preparing to approve its first yen-denominated stablecoin, JPYC. Backed by liquid assets and government bonds, JPYC will maintain a one-to-one peg with the Japanese yen, marking a significant milestone in Asia’s adoption of digital assets.

The global stablecoin market is dominated by a handful of major players:

Tether (USDT): The first successful stablecoin, backed largely by low-risk US Treasury bills, Bitcoin, and even gold.

USD Coin (USDC): Issued by Circle and pegged to the US dollar, USDC operates across multiple blockchains, including Ethereum.

Dai (DAI): A decentralised stablecoin on Ethereum. Users deposit different cryptocurrencies as collateral into smart contracts, which then generate Dai. Its collateral base has expanded to include USDC and US Treasury bills.

Ethena USDe: A decentralised synthetic stablecoin built on Ethereum. It leverages arbitrage opportunities between Ethereum and its derivatives to maintain stability.

World Liberty Financial’s USD1: Launched in 2025 by US President Donald Trump and his family, this stablecoin is backed by US Treasuries, cash, and cash equivalents on a one-to-one basis. Managed by BitGo, USD1 operates on Ethereum, Binance, and TRON blockchains.

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