The recent passage of the GENIUS Act by the U.S. Senate marks a significant step toward formalizing the role of stablecoins in the global financial ecosystem. As nations worldwide accelerate into the era of asset tokenization, central banks are responding with their own digital transformations. This article explores the evolving landscape of stablecoin regulation, the potential of Central Bank Digital Currencies (CBDCs), and how these developments are shaping the future of monetary systems.
Stablecoins are virtual assets pegged to fiat currencies like the U.S. dollar, designed to reduce the price volatility commonly associated with cryptocurrencies. They serve as a crucial trading medium within virtual markets, enabling users to conduct transactions with greater stability. However, despite their growing adoption, concerns about their reliability and regulatory oversight remain.
Understanding Stablecoins and CBDCs
Stablecoins aim to maintain a stable value by being backed by reserves such as fiat currency or short-term government securities. Prominent examples include USDT and USDC, which have become integral to virtual asset trading, international remittances, and even payroll processing in some regions. In emerging economies, these assets often function as an informal "on-chain dollar."
In contrast, a Central Bank Digital Currency (CBDC) is a digital form of currency issued by a central bank, possessing the same legal status as physical money. Unlike decentralized cryptocurrencies, CBDCs are state-backed and subject to financial regulation. Their primary goals are to enhance payment efficiency, maintain monetary stability, and preserve the central bank's role in清算 and oversight.
The U.S. GENIUS Act: A Landmark in Stablecoin Regulation
The GENIUS Act provides a comprehensive framework for stablecoin issuance, defining requirements for reserve assets, disclosure rules, and regulatory compliance. It mandates that stablecoins must be 100% backed by U.S. dollars or short-term Treasury bonds and subjected to federal financial supervision, including anti-money laundering (AML) and counter-terrorism financing (CFT) measures.
This legislation allows banks, fintech firms, and large retailers to issue stablecoins, paving the way for institutional growth. When combined with the House-passed STABLE Act, it is poised to become the first federal dedicated law for stablecoins in the United States. This move not only reinforces the dollar's dominance in the on-chain world but also signals the beginning of a regulated era for global asset tokenization.
Research institutions project that the stablecoin market could grow from its current valuation of $250 billion to as much as $3.7 trillion by 2030, representing a compound annual growth rate of up to 72%.
The Stability Challenge: Why Stablecoins Aren't Always Stable
Despite their name, stablecoins are not immune to value deviations. During market stress events, such as the collapse of FTX or the failure of Silicon Valley Bank, even major stablecoins like USDT and USDC experienced depegging from their intended values.
Most stablecoins are issued by non-bank entities, raising concerns about asset transparency and redemption mechanisms. The inability to guarantee 1:1 convertibility could undermine the uniformity of the existing monetary system and lead to historical parallels with unregulated "wildcat banking."
The Bank for International Settlements (BIS) has highlighted that stablecoins fail to meet three key criteria for sound money: lack of central bank backing, absence of lending functionality, and vulnerabilities in preventing illicit use. BIS also warns that without interoperability with traditional financial systems, stablecoins could cause cross-border capital fragmentation and disrupt monetary policy implementation.
In response, BIS urges countries to establish cross-border technical and regulatory standards, unifying requirements for asset reserves, information disclosure, and redemption capabilities.
Global Regulatory Responses and Taiwan's Approach
Several jurisdictions have already implemented or proposed regulations for stablecoins. The European Union's Markets in Crypto-Assets (MiCA) framework, Hong Kong's stablecoin ordinances, and South Korea's Digital Asset Basic Act are notable examples. In the United States, federal regulatory legislation is still underway.
In Taiwan, the Financial Supervisory Commission has drafted a Virtual Asset Service Act and is collaborating with the central bank to develop a regulatory plan for stablecoins. The central bank emphasizes that to ensure payment stability and monetary uniformity, a digital currency双层架构 featuring CBDCs at its core is the optimal solution.
Deposit Tokens: A Safer Alternative with CBDC Integration
Unlike stablecoins, deposit tokens are issued by banks under existing financial regulatory frameworks, making them more secure and less risky. Leading international banks, including Citigroup, JPMorgan Chase, and UBS, have launched pilot platforms using tokenized deposits for cross-border payments, supply chain finance, and green financing.
Because deposit tokens are bound to the holder's identity and lack transferability in secondary markets, they maintain value stability more effectively and facilitate anti-money laundering efforts.
Internationally, there is growing experimentation with wholesale CBDCs as清算 assets to support the circulation and settlement of deposit tokens. For instance, the Bank of Korea's "Han River Project" allows users to make purchases with deposit tokens, while interbank清算 occurs instantly via CBDC. Similarly, the Hong Kong Monetary Authority's "Ensemble" project promotes the use of a CBDC platform to connect various deposit tokens and asset tokens.
These initiatives demonstrate the potential for collaboration between private sector innovation and public sector清算 infrastructure.
Policy Directions and Future Outlook
Central banks are pursuing two main policy directions: developing retail CBDC prototype platforms, starting with digital voucher distributions, and collaborating with financial institutions to test interactive清算 between wholesale CBDCs and deposit tokens. These tests simulate the simultaneous settlement of security token offerings (STOs) and funds.
To avoid platform fragmentation resulting from commercial banks developing their own systems, the central bank plans to partner with central securities depositories to build an integrated cross-institutional platform for trial atomic settlement of funds and securities.
👉 Explore advanced digital currency strategies
Frequently Asked Questions
What is the main difference between a stablecoin and a CBDC?
Stablecoins are typically issued by private entities and are pegged to assets like fiat currency, but they are not backed by a central bank. A CBDC is a digital currency issued and regulated by a central bank, with the same legal status as physical money, ensuring higher stability and trust.
Why are regulators concerned about stablecoins?
Regulators worry about stablecoins' potential for value deviation during market stress, lack of transparency in reserve management, and vulnerabilities to illicit activities. Without proper oversight, they could disrupt monetary stability and financial systems.
How do deposit tokens differ from stablecoins?
Deposit tokens are issued by regulated banks and are tied to the holder's identity, making them more secure and compliant with financial regulations. They are not traded on secondary markets, which enhances their stability and reduces risks compared to stablecoins.
What is the goal of a wholesale CBDC?
A wholesale CBDC is designed for use between financial institutions to improve the efficiency and security of interbank清算 and settlement processes. It supports the integration of innovative digital assets like deposit tokens while maintaining regulatory control.
How is Taiwan approaching digital currency regulation?
Taiwan is drafting a Virtual Asset Service Act and exploring a dual-layer digital currency architecture that incorporates both CBDCs and stablecoins. The central bank is focusing on developing清算 platforms and conducting pilot tests to ensure a smooth transition into the digital finance era.
What is the future of stablecoins and CBDCs?
The future likely involves coexistence: stablecoins will continue to serve as efficient mediums of exchange in virtual markets, while CBDCs will provide a stable, regulated backbone for the broader financial system, ensuring security and interoperability.