Bernstein analysts see 'perfect storm' that could propel US stablecoin regulation in 2025
Quick Take
- Bernstein analysts predict a “perfect storm” of political and regulatory support will drive U.S. stablecoin legislation forward this year, integrating stablecoins deeper into traditional finance.
- They highlight key use cases, from cross-border payments to AI-driven transactions, while emphasizing stablecoins’ growing role in global markets and U.S. Treasury holdings.
A "perfect storm" of political and regulatory forces is creating the ideal conditions for U.S. stablecoin legislation this year, according to a report published Wednesday by Bernstein.
The analysts added that potential U.S. legislation could lead major financial institutions to evaluate how to integrate stablecoin issuance or settlement into their business models. Additionally, increased regulatory scrutiny on past "debanking" practices is expected, further incorporating stablecoin issuers, exchanges and intermediaries into the traditional financial system.
"A combination of support from the White House, Republican control of both houses, and pro-crypto agency heads (e.g., SEC, CFTC) have formed a 'perfect storm' which forms a strong tailwind for stablecoin regulation to pass this year," the Bernstein analysts said.
They added that the new administration in the White House creates an environment where we are increasingly likely to see stablecoin legislation passage in U.S. Congress, which could unleash significant participation from traditional financial services firms.
Credit card payments offer opportunity for stablecoin integration
The Bernstein analysts said that despite cheaper payment rails for retail debit transactions, credit cards offer an opportunistic value proposition for stablecoins.
They also highlighted cross-border remittances and B2B use cases, noting that the correspondent banking system is "a legacy infrastructure from the 20th century," with numerous inefficiencies, including high costs, delays, limited data flow, and a lack of programmability.
"Stablecoins’ primary use-case today is as the settlement currency of the crypto economy — both as a trading pair on exchanges or lending-based applications on-chain, however, we are seeing emerging use-cases beyond crypto in global remittance & cross-border B2B," Bernstein analysts said.
The Bernstein analysts also noted that stablecoin issuers are currently among the largest global holders of U.S. Treasurys. They argue that this is a key factor in accelerating stablecoin regulation as a national priority.
"With 99% of stablecoins denominated in U.S. dollars, they reinforce dollar dominance in the global on-chain economy," they said. "Further, the strong base of float income economics incentivizes partnerships with fintechs, leading to a strong distribution flywheel for stablecoins."
Bernstein analysts highlighted AI agent-driven payments as a promising long-term use case for stablecoins but noted that credit card payment companies already have a well-established infrastructure for this application.
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