The International Monetary Fund (IMF) has released a comprehensive analysis of the expanding stablecoin sector, evaluating the effectiveness of current global regulations in addressing associated challenges. The briefing paper, titled "Understanding Stablecoins," examined the approaches taken by countries including the United States, the United Kingdom, Japan, and the European Union in formulating regulatory frameworks for stablecoins.
The IMF report indicated that emerging regulations may contribute to mitigating risks to macroeconomic and financial stability. However, it also identified an uneven regulatory environment characterized by diverse approaches and varied issuance structures.
According to the IMF, stablecoins possess the potential to enhance financial access and foster innovation. Nevertheless, they also carry the risk of currency substitution and can contribute to market volatility. The Fund emphasized that global cooperation on regulation is essential. The IMF is collaborating with the Financial Stability Board (FSB), the Bank for International Settlements (BIS), and other international bodies to identify and address regulatory gaps and improve oversight.
Risks and Inefficiencies in the Expanding Stablecoin Market
The IMF expressed concerns that the proliferation of new stablecoins across different blockchains and exchanges could lead to market inefficiencies due to a potential lack of interoperability. The organization noted that this growth, coupled with varying regulatory frameworks and transactional hurdles across different countries, can create disparities and obstacles.
Although regulation of stablecoins helps authorities address [certain] risks, strong macro-policies and robust institutions should be the first line of defense. International coordination remains key to solving these issues.
IMF
The report detailed that the largest stablecoins by market capitalization, Tether's USDT and Circle's USDC, are primarily backed by short-term US Treasuries, reverse repurchase agreements collateralized with US Treasuries, and bank deposits. Specifically, 40% of USDC's reserves and approximately 75% of USDT's reserves consist of short-term US Treasuries, with Tether's stablecoin also holding 5% of its reserves in Bitcoin.
The majority of stablecoins globally are pegged to the US dollar. However, a smaller number of issuers have denominated their offerings in other currencies, such as the euro. As of December, the total market capitalization of stablecoins exceeded $300 billion.
Divergent Stablecoin Frameworks: US GENIUS Act vs. EU MiCA
Following the enactment of the GENIUS Act into law by US President Donald Trump in July, regulators have been actively developing a comprehensive framework for payment stablecoins in the United States. This legislation imposes stringent reserve requirements, prohibits yield-bearing stablecoins, and formally integrates stablecoin issuers into the US financial system.
A recent report from blockchain security auditor CertiK indicates that the United States' new approach to stablecoin regulation is influencing global liquidity flows and creating a significant structural divergence from the European Union's Markets in Crypto-Assets (MiCA) regime. This divergence is effectively leading to the formation of separate US and EU stablecoin liquidity pools.
According to the CertiK report, the US digital asset market entered a new phase of regulatory clarity in 2025, with federal legislation and administrative reforms now largely harmonized regarding the issuance, trading, and custody of digital assets.
While this framework provides much-anticipated regulatory certainty for US issuers, the report cautions that it also exacerbates the global divide with the EU's MiCA regime. This is resulting in a distinct US liquidity pool and contributing to the fragmentation of the global stablecoin market.
Consequently, CertiK anticipates that stablecoin liquidity will become highly segmented by jurisdiction. This segmentation is expected to introduce new cross-border settlement issues and potentially foster regional stablecoin arbitrage.
Despite the European Union's MiCA regime aligning with the US GENIUS Act's requirement for full redemption at par and prohibition of yield for stablecoins, it has encountered resistance due to the inclusion of banking concentration risk. The MiCA rules mandate that a substantial portion of issuer reserves must be held within EU-based banks.
Tether's CEO, Paolo Ardoino, has warned that such a structure could introduce "systemic risks" for issuers, as banks in a fractional reserve system typically lend out a significant portion of their deposits.