Stablecoin Regulation GENIUS Act Drives Global Dollar Adoption in Emerging Markets

The US Senate's historic passage of the GENIUS Act by a 68-30 vote marks a watershed moment for digital finance, with the House expected to follow suit this week. This landmark stablecoin regulation will likely accelerate dollar-pegged digital currency adoption worldwide, particularly in emerging economies where traditional banking fails to meet demand for stable currencies.

Unlike in developed markets where stablecoins remain primarily crypto trading tools, stablecoins now account for approximately 43% of the region's total transaction volume in Sub-Saharan Africa. The practical need is clear: approximately 70% of African countries are facing foreign exchange shortages, making dollar-backed digital currencies essential business infrastructure.

Nigeria exemplifies this trend. After President Bola Tinubu devalued the naira in June 2023, there was a marked increase in relatively small stablecoin transactions of under $1m. From July 2023 to June 2024, Nigeria saw nearly $59 billion in crypto transactions, with most representing everyday business and personal use rather than speculation.

Similar patterns emerge across developing regions. Over 43% of B2B cross-border payments in Southeast Asia now utilize stablecoins, while in Argentina and Venezuela, over 30% of digital wallets now hold stablecoins for daily spending.

As of March 2025, the market capitalization of stablecoins stood at $232 billion, up forty-five times since December 2019. However, payments currently account for only 6% of stablecoin demand according to JPMorgan analysis, with most usage still occurring within crypto trading rather than real-world commerce.

The GENIUS Act aims to change this dynamic by establishing federal oversight for stablecoin issuers, requiring full reserve backing and monthly audits. The GENIUS Act passed the Senate in June with bipartisan support. House leaders expect to pass the GENIUS Act and send it to President Donald Trump's desk.

The legislation creates three categories of permitted stablecoin issuers: subsidiaries of insured banks, federal-qualified nonbank issuers, and state-qualified issuers. State regulation is limited to those with a stablecoin issuance of $10 billion or less, while larger issuers must comply with federal oversight.

Key requirements include maintaining dollar-for-dollar reserves in liquid assets, monthly public disclosure of reserve composition, and 120-day maximum approval timelines for new issuers.

Regulatory clarity is spurring fintech innovation in emerging markets. Nigerian company Juicyway grew deposits from $6 million to $64 million over the past year by facilitating dollar-naira exchanges using stablecoin infrastructure. The company processes most transactions through Bridge's stablecoin network, settling faster than traditional international wire transfers.

Tether, issuer of the world's largest stablecoin USDT, is pioneering new use cases. "The biggest reason in the next five years of growth for USDT will be commodity trading," Ardoino says, explaining that ships won't load cargo until payments clear-a process taking days with traditional banking but settling instantly with stablecoins.

To execute this strategy, Tether now owns 70% of Adecoagro after increasing its stake from 51%. The South American agricultural firm generates $1.5 billion annually from farming and renewable energy production across Argentina, Brazil, and Uruguay.

The Bank for International Settlements warns that widespread stablecoin adoption could destabilize national currencies. Castle Island Ventures co-founder Nick Carter notes that "using stablecoins for dollarization is more efficient than using actual cash," predicting that "over the next decade, this phenomenon will spread on a large scale and shake certain countries' currencies".

Countries already experiencing this pressure include those with high inflation. In Argentina, for example, stablecoins have overtaken Bitcoin, accounting for 60% of transactions.

Stablecoin usage continues expanding beyond crypto trading. Monthly stablecoin trading volumes are averaging $1.48 trillion, up 27% YoY, while $18.6 billion in stablecoin remittances were sent to Southeast Asia in Q1 and Q2 of 2025.

The remittance advantage is substantial: sending remittances via stablecoin can reduce fees by up to 60% when compared to FIAT options.

Currently, the two largest issuers, Tether and USDCoin, currently account for about 86 percent of total stablecoin market capitalization. However, the regulatory framework is expected to encourage new entrants.

"We'll likely see a flood of them rush into the market at the start," says crypto analyst Nic Puckrin, noting that big banks are gearing up to create their own coins.

With the full U.S. House of Representatives set to vote on the CLARITY Act and the GENIUS Act this week, comprehensive stablecoin regulation appears imminent. The legislation could fundamentally reshape global payments, particularly in emerging markets where stablecoins already serve as essential financial infrastructure.

The implications extend beyond digital assets. As regulatory clarity emerges, stablecoins may evolve from crypto curiosities into mainstream financial tools, potentially forcing traditional payment networks to adapt or risk obsolescence in an increasingly digital global economy.