Circle Internet’s spectacular IPO debut sent shockwaves through financial markets this summer. The stablecoin issuer’s shares rocketed from a $31 pricing to $263 at peak, before settling around $130 – a performance that has investors scrambling to understand what they are missing.
Tether, the largest digital asset company on the planet, which has the largest global stablecoin market share, has just hired U.S. crypto kid Bo Hines, formerly the Director of the White House’s Crypto Council, as their CEO helmsman for their U.S. business.
The appointment coincides with the launch of Tether’s new USAT stablecoin, intended to comply with U.S. regulations and attract institutional adoption, a move viewed as a positive move for Tether by many market pundits.
With the U.S. Senate’s passage of the GENIUS Act – “Guiding and Establishing National Innovation for U.S. Stablecoins Act” – which establishes the first federal framework for dollar-pegged stablecoins, suddenly everyone from Wall Street institutions to crypto skeptics are paying attention.
As the initial euphoria settles, a more complex global landscape is emerging. Many jurisdictions around the world are rushing to complete frameworks to regulate stablecoins to attract issuers. Each regime has specific nuances that may have wide reaching impacts on both the functional usability and scalability of stablecoins.
For example, GENIUS prohibits stablecoin issuers from offering any form of interest or yield to holders of payment stablecoins, aiming to maintain their function as a payment instrument rather than an investment product. The U.S. Treasury today issued a new consultation seeking the public’s view of which rules to craft, opening the door for the ongoing debate over whether stablecoins can pay yield.
ADGM’s regime for stablecoins in the UAE is one of the few globally which does permit yield, yet recently published proposals indicate the requirements will be tighter for stablecoin operating margins within their regulated markets.
The E.U. has one of the longest-standing stablecoin regimes, with MiCA now fully implemented and several large issuers already circulating euro-backed stablecoins across member states. Concerns have been raised about complexities and potential dual licensing under both the E.U.’s E-Money regime and MiCA.
In addition, policies framed around protecting E.U. financial sovereignty introduce strong onshoring requirements for firms, which some view as creating barriers to entry and limiting cross-border participation.
Despite the complex landscape, stablecoin momentum continues at pace.
Circle CEO Jeremy Allaire predicts stablecoins’ iPhone moment is coming “soon” when “developers everywhere realize the power and opportunity of programmable digital dollars on the internet.”
Institutions Are Now Interested In Crypto, Very Interested
With the arrival of a new U.S. Administration last autumn, the crypto flag was planted, with President Trump setting the “tone at the top” for crypto innovators. With the creation of the Crypto Council, the appointment of Paul Atkins to the chair at the SEC, the GENIUS and CLARITY Acts, and the recent Presidential Working Group report on crypto, both the tone and the pace was clearly set.
By the summer, the U.S. declared itself the crypto capital of the world, and with good reason. Up to a few months ago, many institutions were still reticent about crypto and digital assets. The scales have tipped, everyone is in, though some skeptics remain.
The Digital Asset Treasury (DAT) play, architected by Strategy’s Michael Saylor, has been a popular vehicle for public listings as of late with estimates of over 70 companies globally now in the market. It is also estimated that over 150 public companies have taken some form of bitcoin strategy in 2025.
Despite the rising popularity of DATs, the global narrative is still dominated by stablecoins.
“CRCL is one of the only ways for public investors to play the blockchain infrastructure theme, and we believe stablecoins are nearing a pivotal turning point,” say analysts at Barclays.
Canaccord analysts concur stating, “Circle’s strategic positioning as the “Switzerland” of stablecoins makes it a standout for long-term success.”
In parallel, corporate adoption is surging. Visa is working with fintechs on cross-border payment initiatives including plans for expansion of new payment products across Latin America. Uber is also considering using stablecoins for cross-border payments to cut currency costs.
While firms strategize on the best way to participate in digital markets, public interest in stablecoins continues to surge globally. In China, a video titled “What is a stablecoin” had more than 12 million views on Douyin, the local TikTok equivalent.
Pan Gongsheng, Governor of the People’s Bank of China, told the Lujiazui Forum 2025, “These innovations accelerate the development of central bank digital currencies and stablecoins and reshape traditional payment and settlement systems.”
Even the previously stablecoin-skeptical U.K. is progressing its stablecoin regulations.
While comments from the governor of the Bank of England (BoE) caused concern, as did recent industry pushback on unconfirmed draft positions from the BoE on stablecoin holding limits, it is important to note that the U.K. stablecoin regime has not yet been agreed or published.
The U.K. Financial Conduct Authority (FCA) has publicly noted, “Stablecoins have the potential to drive efficiency in payments and settlement using blockchain technology, with particular benefits for cross-border transactions.”
Earlier this month deputy governor of the BoE Sarah Breeden also re-affirmed a vision for a “multi-money” mixed ecosystem” and confirmed that they will be “setting out some revised proposals for consultation later this year.”
Industry remains hopeful to see many changes from the historic 2023 discussion paper, as well as amendments based on industry feedback provided to the FCA on their stablecoin consultation earlier this year.
President Trump is in the U.K. this week at the King’s invitation. What is notable is that at Wednesday night’s royal gala dinner at Windsor Castle, Trump was surrounded by his tech elite including Tim Cook (Apple), Mark Zuckerberg (Meta), Satya Nadella (Microsoft), Sundar Pichai (Google), Sam Altman (OpenAI), Bill Gates (Microsoft), Safra Catz (Oracle), Lisa Su (AMD), and others.
Planting the flag as the crypto capital of the world, and spreading that influence globally, is the latest addition to underpin U.S. leadership in global tech.
The U.K. may be hoping to catch some of this momentum with the much-discussed US x UK Tech Bridge which was on the agenda for the state visit – in a letter addressed to the U.K Business Secretary, Peter Kyle, industry groups pushed for digital assets and stablecoins to be part of the trade deal.
Elise Soucie Watts, Executive Director of Global Digital Finance, a global industry association and a strong supporter of the letter, notes, “The U.K. has the opportunity to reinforce its stated intention to be a hub for digital financial innovation, while the U.S. remains home to the world’s largest capital pools and a vibrant digital asset ecosystem.
“Aligning these strengths can deliver more than market efficiency: it can embed shared values of openness, transparency, and responsible innovation into the next generation of financial infrastructure.”
The Stablecoin Skeptics Push Back
Not everyone is yet convinced by stablecoins.
Despite recent positive BoE remarks on innovation, Andrew Bailey has also noted in the past that, “Stablecoins are proposed to have the characteristics of money. Therefore, they really do have to have the characteristics of money and maintain their nominal value.
“We’re going to have to look at it very closely through that lens. It’s both a financial stability issue and a money issue.”
Considering the objectives of the Bank of England to preserve financial stability and set monetary policy, as well as Bailey’s new role as the chair of the Financial Stability Board—established after the 2008 financial crash to monitor global market risks—his caution should be viewed is an important pulse check of the concerns that central bankers more broadly may have on systemic risk and the appropriate safeguards which will need to be in pace when approaching global stablecoin regulation.
The Bank of International Settlement’s research reveals that large inflows of $3.5 billion into stablecoins over five days can pressure short-term U.S. government debt prices enough to pull down yields by up to 0.025 percentage points over 10 days and noting it is comparable to small-scale quantitative easing on long-term yields.
When money exits stablecoins, financial stability risks emerge, increasing as the market grows.
Byron Gilliam, digital financial markets uber analyst, thinks the Fed is likely to be the hardest hit by stablecoins noting in his daily mail, The Breakdown, this week, “For most of its 112-year history, the 12 Federal Reserve banks met nearly all of their funding needs by issuing 0%-yielding cash and investing the proceeds in government bonds typically yielding 5% or more.
“As much as 60% of physical U.S. cash is estimated to be held outside the United States, which means foreigners are doing their best to keep the Fed afloat. But what if they start using stablecoins?”
Deutsche Bank analysts remain circumspect stating, “While we see potential for strong long-term industry adoption of stablecoins, the range of outcomes are very wide and likely to create substantial volatility in earnings revisions and share prices for at least the near-to-intermediate term.”
Jannah Patchay, founder of the Digital Pound Foundation and Markets Evolution advises a better balanced dialogue to stablecoin supporters and skeptics saying, “It is critical to remember is that the nature of stablecoins as bearer instruments and their rapid uptake and expansion beyond crypto markets makes it vital that regulators and central banks adopt more than just a reactive approach.
“The new use cases and business models are a reality and the genie can’t be put back into the bottle. This is not Libra: The Sequel. It’s the new reality.”
What Do Institutional Investors Want?
New research from CrossLedger Capital, launched by Brava, the non-custodial stablecoin management platform, paints a more nuanced picture. The global study with institutional investors and wealth managers highlights both the current stablecoin mania and potential future developments.
Digital asset anxiety is driving the interest in alternatives. Nearly nine out of 10 institutional investors (89%) are nervous about investing in bitcoin due to its record-breaking growth, fearing losses from buying at all-time highs. As a result, 79% are seeking digital asset alternatives like stablecoins.
Pressure is mounting to invest. Almost all (97%) respondents say advisers or clients are pressuring them to consider digital assets. Nearly 60% believe digital asset adoption is an urgent strategic priority, while another third view it as important but not yet urgent.
“Stablecoins are fast emerging as the backbone of modern finance,” says Graham Cooke, CEO and Founder at Brava, “With the GENIUS Act, we’re witnessing the first-ever federal guardrails applied to stablecoins—including full reserve backing, monthly audits, AML/KYC protocols, and clear issuer licensing. This isn’t just legislation—it’s the ignition of a new institutional era.”
The research found diverse institutional use cases for stablecoins – 78% prioritise them for accessing DeFi opportunities while 66% cite portfolio diversification and 62% say they will be valuable for parking funds during volatile markets. Around 61% say stablecoins are valuable for fast, low-cost transactions. This indicates stablecoins serve both tactical market-timing purposes and strategic diversification goals for institutional investors.
The Yield Imperative
But yield is a major issue. Nearly all respondents (96%) expect yield-focused strategies to increase in their portfolios over two years. The main driver? 83% anticipate a stock market correction.
Institutional focus on yield is already significant—49% report that 25% to 50% of their portfolio is yield-focused. This shift is changing risk appetites: 68% anticipate dramatically increased risk tolerance in pursuit of yield, while 53% plan to explore alternative yield strategies within 6 to 12 months. Some 89% are more open to exploring new asset classes, including digital assets.
Risk management remains paramount. Despite yield hunger, 68% say they’re exploring innovation while remaining risk-averse. Another 22% want innovation with strict risk controls. Insurance or protection against cyber and smart contract risks is crucial when choosing blockchain-based lending strategies—21% consider it essential, 69% important, and just 10% view it as optional.
Stablecoin’s iPhone Moment
Nearly all respondents (99%) agree that US dollar-pegged stablecoins are most attractive for institutional investors today—pointing to a healthy future for Circle Internet.
Whether this amounts to an iPhone moment for stablecoins generally remains unclear, but the foundation is being laid. Innovation in yield-focused strategies is clearly on institutional investors’ agenda, but adoption of digital asset and blockchain-based lending strategies depends heavily on robust risk mitigation frameworks.
It took iPhone almost 5 years from launch to become dominant in the U.S. market and 7 globally. While stablecoins’ moment has arrived, stablecoins’ iPhone moment is coming soon.