A quiet revolution is unfolding in the cryptocurrency world, and it’s not about Bitcoin or Ethereum. The focus is on stablecoins, a type of cryptocurrency pegged to a specific reserve asset, often the U.S. dollar, that allows them to maintain a steadier value.

Stablecoins are essentially digital dollars designed to stay steady, unlike cryptocurrencies that spike or plummet in value like Bitcoin or Dogecoin, according to the World Economic Forum.

Last year, stablecoins facilitated $15.6 trillion in transactions. The U.S. Securities and Exchange Commission (SEC) has stated that covered stablecoins, as long as they meet certain criteria, are not considered securities. This classification means that companies issuing or redeeming them do not have to undergo the usual securities registration process.

The SEC views these coins more as tools for payment or storing value rather than investment products. According to the SEC:

“Buyers are motivated to use or consume Covered Stablecoins as so-called “digital dollars” in the same way one would use USD. Accordingly, it is the Division’s view that Covered Stablecoins are not offered or sold as investment contracts.”

In Washington, stablecoins are attracting attention from lawmakers on both sides of the aisle. Currently, there are no clear laws regarding stablecoins in the U.S., but Congress is actively working to establish a framework.

The Senate Banking Committee has advanced its stablecoin bill, the Genius Act, to the floor, while the House Financial Services Committee has done the same with its version, the Stable Act. Final votes are expected soon and could define how these assets operate and who gets to issue them for years to come.

Sen. Bill Hagerty, R-Tenn., is sponsor of the Genius Act. He says “the previous administration’s hostility toward crypto and refusal to provide clear regulatory guidelines have severely stifled stablecoin innovation.”

“The Genius Act opens a new frontier for crypto innovation by finally establishing a clear federal regulatory framework that preserves a strong state pathway to stablecoin issuance,” Hagerty said.

The stablecoin market has grown significantly, with more than $230 billion now backing these digital assets.

Tether, a major issuer, reported $13 billion in profits in 2024. This growth has prompted calls for greater oversight but also presents new business opportunities. PayPal was the first major brand to launch a stablecoin, and more companies could follow suit.

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