There is a chance that the US will begin to regulate stablecoins sometime in 2022. According to Bloomberg, the U.S. regulatory bodies have agreed that the SEC will lead the U.S. stablecoin regulation and enforcement. Although at a glance such a selective restrictive move looked strange, we must admit, that the regulators got points there for sure: fiat currency minting and circulation fall under their scrutiny, and since stable coins explicitly peg their market values to the regulated currencies, the former must be qualified as the money market instruments’ derivatives.

The report published back in October clarified the regulatory statute of the U.S. Treasury Department & CFTC regarding stable tokens. The report also outlined that SEC agreed with other U.S. agencies to propose legislation and govern the U.S. “stablecoin industry” (quote-unquote). Importantly, stablecoins have been a subject of focus by a series of U.S. regulatory bodies as well as the President’s Working Group on Financial Markets. This situation taught us how to think about money and financial fragility when it comes to regulating stablecoins.

Regulators are apparently longing for regulation “to address the potential systemic risk” that could arise if there is a run or an inability to redeem [assets]. They will evaluate the risk from the redemption of stablecoins and from the process of backing them with currency. Furthermore, according to this narrative, banks make a profit by accepting deposits and then lending that money. To address the risk that they might not have adequate liquidity to meet withdrawal demands, regulations impose capital and leverage ratios on the banks. SEC chairman Gensler has been pushing for many months for further expansion in the agency’s regulatory domain for stablecoins. Gensler back then reportedly was ready to clarify SEC’s power to oversee stablecoin based investment transactions. He also allowed the commission to follow enforcement actions against issuers.

Meanwhile, the stablecoin market has witnessed significant growth last year. Not to forget the market capitalization of leading stablecoin issuer Tether (USDT) has topped the charts this year with $69.5 billion. Its market cap is growing by 229% since the start of 2021 and it doesn’t seem to stop anytime soon. Second-ranked USD coin also witnessed swift growth with its market cap growing 706% year-to-date. It is now at $32.52 billion at the time of writing.

Table 1. List of Most Popular Stablecoins

NameSymbolCurrent Price, USDCurrent MarketcapMarketcap DominanceTrading Volume 24Hr USD
DeFi DollarDUSD0.914478864N/RN/R1774.597897
Based MoneyBASED0.010462282N/RN/R344.3179704
Fei USDFEI0.997807575N/RN/R17623137.76
mStable USDMUSD0.999N/RN/R89184.88028
Gemini DollarGUSD1.0006071712005345800.0086200094220929.468
USD CoinUSDC0.999744579454352740851.9530420681642222817
Binance USDBUSD1.000198943144489652700.6210909382833990246
Pax DollarUSDP0.996065789942987847.80.04053447415706138.64
Synthetix USDSUSD1.001055078121836437.80.0052371585369702.446
Steem DollarsSBD4.49120540446433591.260.001995955338.4062194
Neutrino DollarUSDN0.948504422509251002.30.021890231190320.9977
Stably DollarUSDS0.94283677.87191.21939E-05285.3688602
Dynamic Set DollarDSD0.008020403N/RN/R787.4380428
Stasis EuroEURS1.034205711107687641.90.0046289691242424.067
Empty Set DollarESD0.0201650488993856.2390.0003866029874.052514
Frax ShareFXS30.17313767489088599.50.0210235479549034.019
Float ProtocolBANK36.141996325087495.9110.000218687191543.0068

Source: Messari

Fast forward, at the beginning of this year, federal regulators, visibly tired of U.S. legislators’ kicking a can down the road for so long, said they would consider expediting the addition of regulation on issuers of stablecoins if Congress doesn’t act on a recommendation for legislation to restrict the activity to banks.


The President’s Working Group on Financial Markets, a panel of regulators led by the secretary of the Treasury, recommended in November that Congress enact legislation to restrict the issuers of stablecoins to deposit-taking banks. This essentially means no private coin issuers would be legally allowed to offer instruments, whose white papers would unequivocally mention pegging their market values to any fiat currencies – first and foremost, the U.S. dollar.

Uncoinscidentally, the Hong Kong Monetary Authority had issued a Discussion Paper on Crypto-assets and Stablecoins in January 2022. The Discussion Paper included guiding principles of a contemplated regulatory regime for payment-related stablecoins, and an invitation to stakeholders to provide feedback on the direction and scope of the new regime by 31 March 2022.

Furthermore, Big Four accounting company Ernst & Young had recommended that banks should change their regulatory perimeter to address the oncoming launches of state-backed central bank digital currencies (CBDC) and private stablecoins.