The impact of regulation on stablecoins

Regulation is becoming a key factor in the development of stablecoins, and 2025 promises significant changes due to the adoption of new regulatory frameworks. A striking example is Tether, which in 2024 demonstrated the success of its model by earning $5.2 billion through investments in U.S. Treasury bonds. This only confirms that a regulated approach can be highly profitable.

Financial institutions are increasingly considering issuing their own stablecoins. Their strategy includes:

1. Launching a regulated stablecoin;
2. Collaborating with major exchanges for promotion;
3. Generating stable income from fiat reserve investments.

Regulated stablecoins are particularly popular due to their transparency, which attracts more clients while avoiding unnecessary risks.

A New era of regulation in the EU

The European Union's "Markets in Crypto-Assets" regulation, set to be fully implemented by January 2025, will be a turning point for stablecoins. MiCA requires issuers to obtain licenses, ensuring standards for safety, transparency, and consumer protection.

These clear rules create ideal conditions for banks and financial institutions, enabling them to work with crypto assets legally and securely. One of the key opportunities for banks will be offering custodial services, allowing safe storage of clients' digital assets, especially for institutional investors.

We wrote more about this legislation in the article "How Cryptocurrency Regulation is Progressing in the EU." 

Trends and examples of new assets

Recent years have been marked by the emergence of new stablecoins designed in compliance with regulatory requirements:

• In 2024, the Central Bank of the United Arab Emirates approved the launch of AE Coin, backed by the dirham. This is the first asset regulated by a central bank.
• Binance USD (BUSD), despite being the fifth-largest stablecoin, ceased support due to regulatory challenges. This opens the market for new players adhering to licensing norms.
• The UK is also preparing for changes, planning to introduce a unified regulatory framework for cryptocurrencies, including stablecoins, by early 2025. This will simplify operations for issuers and exchanges.

Reimagining cryptocurrencies in Europe

There are already concerns in the European market about USDT's compliance with regulatory requirements. Despite its market dominance, this stablecoin could be delisted from European exchanges if it fails to obtain a license under MiCA.

Meanwhile, alternatives like USDC already have the necessary permissions, giving them an advantage in the region. At the same time, MiCA will encourage local players to create euro-backed stablecoins, potentially reducing dependence on the dollar and increasing market competition.

Regulation as a driver for mass adoption

2025 will mark the maturity of stablecoins, with regulation playing a crucial role. With clear regulatory frameworks, this type of cryptocurrency will transition from a niche tool to a category of core assets. They will offer faster, cheaper, and more inclusive financial services, integrating into the traditional financial ecosystem.

Investment companies like Andreessen Horowitz (a16z) predict that in 2025, the combination of stablecoins with new technologies, including artificial intelligence, will open new markets and opportunities. Local stablecoins backed by national currencies will play an important role, reducing dollar dominance and promoting diversification.

The total market capitalization of stablecoins could double or even triple, laying the foundation for mass adoption in the financial systems of the future.