Stablecoin regulation continues to evolve globally, with recent developments in the US, EU, and Singapore focusing primarily on reserve-backed stablecoins and establishing frameworks for their issuance and oversight.
1. New Bills, Proposals, or Enforcement Actions:
- United States: The "Guiding and Establishing National Innovation for U.S. Stablecoins Act" (GENIUS Act), signed into law on July 18, 2025, establishes a federal regulatory framework for payment stablecoins. This act requires stablecoins to be backed 1:1 with reserves of cash or other permitted assets and prohibits issuers from paying yield to holders. It also mandates monthly public attestations of reserves. The GENIUS Act aims to preempt state-level stablecoin regulation, though states like Florida have recently enacted their own licensing frameworks designed around the federal act. California, conversely, has repealed its stablecoin-specific provisions in light of the federal framework. The US Treasury has also proposed rules under the GENIUS Act that would require stablecoin issuers to implement robust AML, CTF, and sanctions compliance programs, including the technical ability to freeze or block stablecoin transactions involving sanctioned parties.
- European Union: The Markets in Crypto-Assets Regulation (MiCA) has been in effect in stages since June 2024 for stablecoin-specific provisions and December 2024 for crypto-asset service providers. MiCA mandates that authorized stablecoins be 1:1 backed by liquid, segregated reserves with public attestations. It significantly restricts algorithmic stablecoins without tangible reserve backing.
- Singapore: The Monetary Authority of Singapore (MAS) finalized its stablecoin regulatory framework in August 2023, which applies to single-currency stablecoins (SCS) pegged to the Singapore Dollar or G10 currencies issued in Singapore. Issuers must meet requirements for value stability (100% reserve backing, independent checks, and audits) and capital. Only stablecoins fulfilling these criteria can be labeled "MAS-regulated stablecoins."
- United Kingdom: The UK is developing a two-tier framework for stablecoin regulation. The Financial Conduct Authority (FCA) will regulate non-systemic stablecoin issuers, while systemic stablecoins will be jointly regulated by the FCA and the Bank of England. The UK framework focuses on fiat-backed stablecoins.
- South Africa: The South African Reserve Bank (Sarb) continues to emphasize the need for stablecoin regulation to prevent undermining exchange controls and financial oversight, while acknowledging their potential to improve cross-border payments.
2. Which jurisdictions are involved:
The primary jurisdictions actively shaping stablecoin regulation are the United States, the European Union, the United Kingdom, and Singapore. Other regions like the UAE, Australia, South Korea, and Hong Kong are also advancing their regulatory frameworks.
3. Whether the regulation targets algorithmic stablecoins, reserve-backed, or all:
The prevailing regulatory trend across these jurisdictions is a clear focus on reserve-backed stablecoins, particularly those pegged to fiat currencies. Algorithmic stablecoins are largely disfavored or effectively prohibited in frameworks like the EU's MiCA and the UAE's regulations, which require 1:1 backing with liquid assets. The US GENIUS Act, while not explicitly banning algorithmic stablecoins, excludes them from its regulatory framework, thereby denying them the legal protections and safeguards offered to fiat-backed stablecoins.
4. How this might affect FLAT specifically:
- FLAT is CPI-pegged (not USD-pegged) — does the regulation apply? FLAT is a CPI-pegged stablecoin, designed to maintain purchasing power against a basket of consumer items rather than a fixed fiat currency like the USD. Most current stablecoin regulations, such as the US GENIUS Act, EU MiCA, and Singapore's framework, specific
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