🧠 Food for thought

Implications, context, and why it matters.

New laws in 2025 brought stablecoins further into regulated frameworks

• Stablecoin wallets and transaction volume climbed as governments put more oversight in place.
• The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act passed in July 2025. It created the first comprehensive federal framework for payment stablecoins in the United States 1.
• The act set standards for reserves, audits, plus consumer protection. That gave institutions more comfort to participate 1.
• Europe’s Markets in Crypto-Assets Regulation (MiCA) took full effect in 2025. The added alignment pushed firms such as Visa to run stablecoin payment pilots 23.

The growth in stablecoins could shrink bank lending

• As stablecoins spread, they can reduce the deposits that help banks fund loans.
• When users swap bank deposits for stablecoins, banks can lose a core funding source for lending 4.
• Federal Reserve analysis estimates that each $100 billion in net deposit outflows not recycled to banks could cut bank lending by $60 billion to $126 billion 4.
• Small and medium-sized businesses could feel the squeeze most since they often depend on bank credit and have limited access to capital markets 4.
• Large banks are building tokenized deposits and new payment systems to compete more directly with stablecoin rails 4.