As More Countries Adopt Stablecoin Laws, Usage Is Likely to Spread

With rules governing stablecoins under development in the U.S. Congress, there are now at least 14 countries and regions worldwide that have established or are considering regulations for the digital currency.

The need for regulations in jurisdictions around the globe comes as stablecoins grow in awareness and usage and pose an attractive alternative to cryptocurrencies like Bitcoin, whose value can swing wildly from day to day. By contrast, stablecoins are so-called because their value is supported by underlying assets such as fiat money or Treasury bills.

Major providers, including crypto issuers and merchants, are also keen for such rules, as they can help overcome hesitation about usage and acceptance, observers say. That can help propel stablecoins as a regular medium of exchange and combines with stable value in a proposition that could be compelling for merchants, some observers say. 

“As a merchant, I’d have to be an idiot if I wanted to accept Bitcoin,” says Cliff Gray, proprietor of the payments advisory Gray Consulting. “With stablecoins, it’s U.S. dollars. You don’t have to talk about it.”

According to a review by Digital Transactions News, six countries and jurisdictions have already adopted laws governing stablecoins, including Hong Kong, Japan, the European Union, Singapore, Switzerland, the United Arab Emirates. Besides the United States, seven other jurisdictions have rules under consideration, including Australia, Bahrain, Brazil, India, Taiwan, Turkey, and the United Kingdom.

In the United States, the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) bill passed in the Senate earlier this week by a vote of 68 to 30 and now proceeds to the House of Representatives. The House has its own bill, the STABLE (Stablecoin Transparency and Accountability for a Better Ledger Economy) Act. How the legislatures reconcile the two bills will be a closely watched matter, but the process will ultimately add the U.S. to the short list of nations and jurisdictions with settled laws governing stablecoins.

Another factor driving interest in stablecoin legislation around the world, and particularly in the U.S. market, has to do with merchants’ acceptance cost. With settled rules in place, consumers may over time be more likely to pay with stablecoins. That could benefit retailers that feel hard-pressed by the cost of taking credit cards.

Figures are difficult to pin down, but experts contacted by Digital Transactions News peg the merchant’s cost for accepting stablecoins as less than that for credit cards and perhaps roughly comparable to the cost of taking debit cards.

That factor, too, could help propel adoption in countries that have established regulations. “There is a benefit, it would certainly be less [than credit cards] but not zero,” says Enrico Camerinelli, a strategic advisor at the consultancy Datos Insights, regarding the merchant’s cost for taking stablecoin payments. “You can reduce 60% of the cost [of credit cards]. That’s my guess.”