Starting from nothing, stablecoins have grown into one of the industry’s biggest success stories in terms of user adoption over the past decade.
A clear product-market fit was found – and a highly lucrative one at that, especially for those who got involved early when the groundwork was being laid.
The rapid global uptake of cryptocurrencies, as individuals and organizations modernize their personal payment infrastructure, has also given rise to Tether – the current market leader and, by some metrics, the most profitable company in the world on a per-employee basis.
By now, several hundred million people around the world are stablecoin users. The ability to transfer US dollar equivalents quickly, transparently, and without the all-too-common UI nightmare of traditional banking rails makes for a highly compelling proposition.
For the first time in history, anyone with an internet connection can store their labor in US dollars rather than their local fiat currency via a few simple button clicks – a particularly attractive option for users in emerging markets facing weak or unstable monetary regimes.
With that much capital flowing through stablecoin networks, it was only a matter of time before regulatory scrutiny intensified.
Coming off the back of a hostile climate during the previous U.S. administration (“Operation Chokepoint 2.0”), both advocates and critics are now engaged in increasingly high-stakes debates over the future of stablecoin regulation in the United States of America.
And the stakes are rising fast — fueled by rapid shifts in the global geopolitical order, including changes to the trade and currency systems that have underpinned the world economy for decades.
Are stablecoins a way to extend U.S. financial primacy into the digital era – or do they require tight controls, as exemplified by the European approach to financial innovation?
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BitcoinVN News: Tom, you recently wrote a piece that received quite a bit of attention – including a retweet from Tether CEO Paolo. What’s happened since then, and how was it received by industry participants and on Capitol Hill?
Tom Howard: It seems the message was received! The authors of the GENIUS Act (the Senate) specifically mentioned in the committee voting session the need to maintain foreign access to US Dollars as a matter of national security. They removed language that would ban foreign issuers from the US, included benefits for domestic issuers, and added language that foreign issuers must follow lawful orders around international financial crimes. In my opinion a good compromise that keeps international issuers a viable alternative to the US while also highlighting the inherent reduced risks of being a US government back stopped domestic issuer. The STABLE act (the House) adopted similar language, now they need to reconcile the differences before they both go for final vote this summer.
BitcoinVN News: The crypto industry was broadly targeted in a rather hostile way under the previous U.S. administration. Based on your recent impressions, what’s your level of optimism that this time they might get it right? Is it finally “time to build” in America?
Tom Howard: It is absolutely time to build crypto in America. There is currently a mad rush of businesses preparing for the anticipated “regulatory clarity” next year that will finally open the doors for Crypto in the American market. Incredibly optimistic time for US crypto.
BitcoinVN News: The core argument of your essay is clear and accessible to anyone willing to look beyond the usual scaremongering, anti-crypto headlines.
Stablecoins act as a major demand driver for U.S. Treasuries – helping to finance the U.S. government, suppress domestic yields, and quietly extend the dollar’s reach worldwide by backdoor-dollarizing foreign economies.
In doing so, they not only export U.S. inflation, but also serve as a powerful tool to counter attempts by rival powers to dethrone the USD as the global reserve currency – ultimately reinforcing American geopolitical primacy in the digital age.
How well understood are these underlying mechanics within U.S. legislative and executive circles today? Are policymakers starting to grasp the strategic value, or does confusion still dominate the conversation?
Tom Howard: Participating in the lawmaking process has been very illuminating. The US Congress has 100 senators in the Senate and 435 representatives in the House that all vote on new laws. They each have an office of staffers that help them inform their views on their votes. Each of them have tons of people trying to influence them: constituents, lobbyists, special interests, executive branch, political party, and more. Do all these people involved have a grasp on the big picture? No, definitely not. Do the voting Congressmen or their staff have a grasp on these topics? Not really, they have a ton of issues they need to learn about and so little time to learn. They tend to weigh the opinions and concerns of the leaders they trust and the stakeholders that put them in office. On top of that, the US domestic stablecoin interests are less concerned with national strategic concerns than they are with protecting their own interests, so they make errors like the ones highlighted in my article. That being said, I am pleasantly surprised that the primary authors of the bill and the relevant people in the administration have a strong grasp of the bigger strategy here and are able to properly guide the policy making and voting. For crypto in the US, we are at a unique point in history where the majority of congress and the executive branch are pro crypto and pro innovation and want to see this industry thrive, even if they are not fully up to date on the nuances of economic or monetary policy.
BitcoinVN News: Europe, as has become typical in recent decades under the stewardship of the European Union, appears to favor a heavy-handed regulatory approach – often under the guise of “protecting” its citizens from the realities of adapting to life in the 21st century.
Some of the latest regulations even require stablecoin issuers to park a significant portion of their reserves in fragile EU banks – a condition that several major industry players have already flagged as an unacceptable business risk.
How do American industry leaders view the old continent in light of these developments?
Is there still any serious intent to build or expand in Europe — or is it being written off as a lost cause?
Tom Howard: Any stablecoin backed by fiat money is ultimately tied to the success of that fiat money. Whether it is USD or EUR, if the banks collapse, the value of the currency will suffer, whether reserves are parked in the corresponding banking system or not. I think it makes sense to have a standard that requires the stablecoin to have corresponding banking reserves, since their fate is so closely intertwined, it actually minimizes risk. However the US legislation recognizes that there may be innovation in having exogenous reserves and have specifically carved out an exemption for “decentralized stablecoins” that are fiat pegged but not fiat backed. The US legislation also has provision for recognizing “reciprocal regulations” for stablecoin issuers from other jurisdictions, but at the end of the day the global demand for trade is primarily in USD, so there is not much expectation that Euro Stables are going to be relevant. For the crypto industry at large, the EU does have a head start with the MiCA legislation which businesses are taking seriously for EU expansion, but at this point most of those initiatives are mostly completed and so the focus is turning towards the new US opportunity.
BitcoinVN News: Until now, the stablecoin market has largely been a two-player race between Tether and Circle – with DAI holding a niche foothold among more crypto-native retail users as the “decentralized” alternative.
With regulatory fragmentation increasing across jurisdictions, do you foresee a wave of new stablecoin issuers emerging – driven not by technical innovation, but by regulatory arbitrage and localized compliance needs?
Tom Howard: I do expect there will be hundreds if not thousands of stablecoins coming onto the market after the Stablecoin legislation is passed, and I think we will see the proliferation of a new type of stablecoin, the “bank issued” stablecoin. The primary differentiator for these stablecoins will be their go to market strategy, are they able to acquire users that are underserved based on their unique market position. Due to the strict rules around monetizing the reserves, there will be little competition on the US domestic issuer front on reserve profits, so they will have to rely on other means of monetization in order to survive. The opportunity for international or decentralized stablecoins will be in riskier reserve monetization, which will also reflect in the markets willingness to take on that extra risk.
BitcoinVN News: In recent weeks and days, the “talk of the town” in global macro has centered around the possibility of a deliberate shift away from the U.S. Treasury market as the global reserve asset — a move aimed at reshoring manufacturing, boosting American productive capacity, and regaining control over critical supply chains.
Given how fundamental this potential pivot is to U.S. economic strategy, how might such a reorientation affect the long-term outlook for USD-backed stablecoins?
Do they remain a strategic asset – or could their role diminish in a world where the U.S. deprioritizes dollar-based financial exports in favor of industrial self-sufficiency?
Tom Howard: The new US executive administration is clearly aware of “Triffin’s Dilemma” when it comes to the potential downsides of being a world reserve currency, and they are making moves to strengthen exports instead of relying on a purely finance driven economy. The fog of war around the strategy to escape this trap is very thick, so it is hard for me to evaluate where things are on this front at the moment, but it seems clear that they are highly aware of what is really at stake here. If the US could have its cake and eat it too, they would have both a strong export economy and a strong reserve currency. Should the fiat currency fail in the process of building up export capacity, I think there is a strong possibility that the world seeks a decentralized reserve currency such as Bitcoin.
BitcoinVN News: What’s your outlook for 2025 – both in terms of the broader crypto landscape and your own personal focus areas for the year ahead?
Tom Howard: In recent years, crypto as an industry seemed to hit a stagnation and commodification point in the innovation cycle. Now with the broader adoption of Bitcoin by sovereign countries and the regulatory clarity coming to the final frontier market, USA, I think we are entering the late stage growth phase of innovation, which is a particularly exciting time to be a part of this industry. Personally I am focused on making sure we get good laws passed in the US that align with the values of Bitcoin and crypto. I am also making sure that our company, CoinList, takes full advantage of the global compliance strengths, to legally offer all the crypto offerings the US market has wanted for years, as the new laws start to make it possible.
Tom Howard is the Head of Financial Products and Regulatory Affairs at Coinlist and a veteran with years of experience in the crypto industry in various roles as startup operator, investor and advisor.
