Coverage: November 2025 · Information to 14 November 2025
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TGB Monthly Regulatory Policy Brief · 14 November 2025
The United States has legislated, the EU is applying MiCA and the Bank of England has proposed holding limits, but the three regimes give banks very different roles as issuers, reserve holders and competitors for deposits.
The desk view
Jurisdictions are now drawing the line between stablecoins and bank money, but in different places. The GENIUS Act, approved on 18 July 2025, lets bank subsidiaries issue payment stablecoins and allows bank deposits as reserves without requiring them. MiCA requires e-money token issuers to hold at least 30% of reserves in bank deposits, rising to 60% for significant tokens. The Bank of England's 10 November 2025 proposals would put at least 40% of systemic stablecoin backing at the central bank and cap individual holdings at £20,000 per coin to limit deposit outflows. The US law, MiCA, Hong Kong's regime and the UK proposals all bar issuers from paying interest to holders; in the EU the aim is to stop stablecoins competing with bank deposits. For banks, the choice is now whether to issue, hold reserves or compete, under rules that are still being written.
A fast-growing market meets uneven rules
Global stablecoin market capitalisation reached around USD 300 billion by September 2025, more than double the figure in the European Systemic Risk Board's May 2023 report, and equal to 7.5% of total crypto-asset market capitalisation. US dollar-denominated coins accounted for 99% of the total and euro-denominated coins for just 1%. Two coins dominate: Tether (USDT) at USD 170 billion, or 57% of the market, and USDC at USD 71 billion, or 24%. Together they account for 81% of stablecoin market capitalisation.
Regulation is catching up unevenly. The Financial Stability Board's peer review of 16 October 2025, reflecting information as of August 2025, found that five jurisdictions had a finalised regulatory framework for stablecoins, compared with 11 for crypto-assets more broadly. A further 10 jurisdictions were consulting on or finalising stablecoin frameworks (six with plans under public discussion and four with a framework proposed but not finalised), three had partial regulations and 11 remained at an early stage with no framework. Licensing has lagged legislation: in the EU, 16 e-money tokens had been issued under MiCAR by 10 entities, one credit institution and nine e-money institutions, while in Japan a company had received approval to issue a yen-denominated stablecoin and was preparing its launch as of 3 September 2025. Bermuda's regulator had issued more than 10 licences to stablecoin issuers, but no other jurisdiction in the review had granted one, mostly because regimes were newly enacted, as in Hong Kong, or not yet applicable, as in the United States.
The regimes differ most on who may issue and how much of the reserve must sit in banks, which decides whether stablecoins fund banks, compete with them or are issued by them.
Stablecoin frameworks in the FSB peer review, number of jurisdictions (August 2025)
United States: a federal charter with a bank route
The GENIUS Act (Public Law 119-27) was approved on 18 July 2025. It limits issuance of payment stablecoins to three types of permitted issuer: a subsidiary of an insured depository institution approved under the Act, a federal qualified issuer, or a state qualified issuer. A state qualified issuer with no more than $10 billion of outstanding issuance may opt for state-level regulation. Issuers must hold identifiable reserves on at least a 1 to 1 basis. Eligible reserves include demand deposits at insured depository institutions, subject to FDIC and credit union regulator limits, and Treasury bills, notes or bonds with a remaining or issued maturity of 93 days or less. Issuers may not pay holders "any form of interest or yield" solely for holding, using or retaining a payment stablecoin, and payment stablecoins may not be covered by federal deposit insurance.
Implementation is still at an early stage. The Act takes effect on the earlier of 18 months after enactment or 120 days after the federal regulators issue final implementing regulations. From three years after enactment, digital asset service providers may not offer or sell a payment stablecoin in the United States unless it comes from a permitted issuer. On 18 September 2025 the Treasury issued an advance notice of proposed rulemaking on implementation, which it said does not implement new requirements. The FSB review placed the United States at stage 4, framework proposed but not finalised, with the federal banking agencies among those implementing the legislation.
The Act also protects banks' existing powers. Section 16 states that nothing in the Act limits the authority of a depository institution to issue digital assets that represent deposits, to use a distributed ledger for its books and records, or to provide custody for payment stablecoins and their reserves. Regulators may not require banks to hold regulatory capital against digital assets held in custody, or against the reserves backing them, except as needed to mitigate operational risks. That preserves room for tokenised deposits alongside bank-issued stablecoins.
The bank supervisors had already reversed their earlier caution during 2025. On 7 March the Office of the Comptroller of the Currency issued Interpretive Letter 1183, confirming that crypto-asset custody and certain stablecoin activities are permissible for national banks and dropping the requirement for supervisory non-objection. On 28 March the FDIC issued FIL-7-2025, under which FDIC-supervised institutions may engage in permissible crypto-related activities without prior FDIC approval. On 24 April 2025 the Federal Reserve Board rescinded its 2023 supervisory letter on the non-objection process for state member banks' dollar token activities, and, with the FDIC, joined the OCC in withdrawing from two 2023 joint statements on crypto-asset risks. On 15 August 2025 the Federal Reserve Board said it would sunset its novel activities supervision programme.
The US design leaves the bank deposit share of reserves to issuers. As the ESRB noted, the GENIUS Act does not mandate a minimum share of bank deposits, which may limit the direct impact on banks.
European Union: reserves anchored in bank deposits
The EU's rules for asset-referenced tokens and e-money tokens in Titles III and IV of MiCA became applicable on 30 June 2024. The FSB classed the EU framework as finalised, fully in force since June 2024.
MiCA ties stablecoin reserves directly to the banking system. E-money token issuers must hold at least 30% of reserves in bank deposits, and 60% for significant tokens. Under the draft technical standards, deposits a bank accepts from a given token issuance may not exceed 1.5% of that bank's total assets, and reserves must be spread across at least two banks, or three for significant tokens. The ESRB warned that a run on a significant EU stablecoin would directly trigger a significant deposit withdrawal from EU banks, and noted that only a handful of small banks accept deposits from stablecoin issuers.
At the system level the exposure is small. Euro-denominated e-money tokens were worth less than €300 million. In an ESRB scenario in which they grew to €130 billion, the average liquidity coverage ratio of significant institutions supervised by the ECB would fall from 158% at the end of 2024 to 154%, a 4 percentage point decline. The risk is therefore one of concentration in individual banks rather than of system liquidity.
The rulebook is still contested. On 10 October 2025 the European Banking Authority published two opinions stating that the European Commission's proposed amendments to the reserve-asset technical standards were not consistent with MiCA's prudential framework. The EBA said the amendments could allow investment in non-highly liquid instruments and classify all money market funds as highly liquid, introducing material liquidity risk and weakening alignment with the banking liquidity framework. On 20 October 2025 the ESRB recommended that the Commission should not treat third-country multi-issuer stablecoin schemes as permitted under MiCAR, and that it act by the end of 2025. It said MiCAR does not explicitly envisage joint issuance by EU and third-country entities.
Public money is also part of the EU answer. On 30 October 2025 the ECB Governing Council moved the digital euro project to its next phase. If legislation is in place in the course of 2026, a pilot could start in 2027 and the Eurosystem should be ready for potential issuance during 2029.
United Kingdom: central bank backing and holding limits
The Bank of England published its proposed regime for sterling-denominated systemic stablecoins on 10 November 2025. It covers systemic stablecoins used for UK payments that are issued by non-banks. Banks issuing tokenised deposits or stablecoins stay under the banking regime and the PRA's 2023 Dear CEO letter.
The proposals go further than the US or EU rules in separating payment stablecoins from bank funding. At least 40% of backing assets would be held as unremunerated deposits at the Bank of England and up to 60% in short-term sterling UK government debt. Issuers recognised as systemic at launch could hold up to 95% in government debt while they scale. Deposits at the central bank would earn no interest because issuers would not lend and would play a very limited role in monetary policy transmission. Nor would coinholders be paid interest: the Bank proposes to keep its policy that systemic issuers should not pay it. The Bank is also considering a backstop lending facility for eligible, solvent and viable issuers. Many respondents to its 2023 discussion paper had said fully unremunerated backing would not support a viable business model.
The holding limits are aimed squarely at bank deposits. The Bank proposes per-coin limits of £20,000 for individuals and £10 million for businesses, as a transitional measure to reduce the risk of large and rapid outflows of deposits from the banking sector. Because the limits apply per coin, an individual could hold £80,000 across four different stablecoins. The Bank notes that UK households and businesses rely heavily on banks for credit, unlike some jurisdictions where capital markets play a larger role.
The Financial Conduct Authority covers issuers below the systemic threshold. Its consultation paper CP25/14, published on 28 May 2025, proposes that issuers by default hold only core backing assets, namely short-term deposits and short-term government debt, place redemption payments by the end of the next business day, and not pass interest on backing assets to holders. In April 2025 HM Treasury had set out, in a draft statutory instrument, new regulated activities for stablecoins on the same timetable as the rest of the cryptoasset regime. The Bank of England consultation closes on 10 February 2026, with rules to be consulted on and finalised in 2026.
Asia-Pacific and Canada
Hong Kong's licensing regime for stablecoin issuers came into effect on 1 August 2025, after the Hong Kong Monetary Authority published its guidelines on 29 July. Licensees must keep the market value of reserve assets at all times at least equal to the par value of coins in circulation. Eligible assets include cash, bank deposits with a term of no more than three months, and marketable debt securities issued or guaranteed by governments, central banks and other public bodies with a residual maturity of no more than one year. Licensees must not pay interest, must process valid redemption requests within one business day unless otherwise approved, and must hold paid-up share capital of at least HK$25 million. A licensee that is a bank must comply with the Banking Ordinance. As of 29 July 2025 no licence had been issued, and the HKMA asked applicants seeking early consideration to apply by 30 September 2025.
Singapore finalised its stablecoin framework on 15 August 2023 for single-currency coins pegged to the Singapore dollar or a G10 currency and issued in Singapore. Issuers must return par value within five business days of a redemption request, and only those meeting all requirements may label their coins "MAS-regulated stablecoins". The FSB placed Singapore at stage 4, noting that MAS plans a bespoke framework for single-currency stablecoins. Japan was at stage 5: its Payment Services Act was amended in 2022, with effect from 2023, to cover stablecoin activities.
Canada moved during the month. Budget 2025, published on 4 November 2025, announced legislation to regulate the issuance of fiat-backed stablecoins, requiring issuers to maintain adequate reserves, redemption policies and risk management frameworks. The Bank of Canada will administer it, retaining $10 million over two years from 2026-27, with later costs of $5 million a year recovered from issuers. In the FSB review Canada had been at stage 2, with existing provincial securities laws applying where stablecoins are securities or derivatives.
Stablecoin regimes compared
| Jurisdiction | Status | Who may issue | Reserve rules | Interest to holders |
|---|---|---|---|---|
| United States | GENIUS Act approved 18 July 2025; FSB stage 4 | Bank subsidiaries, federal and state qualified issuers | At least 1 to 1; deposits and Treasuries of 93 days or less | Prohibited for holding alone |
| European Union | MiCA token rules applicable since 30 June 2024; FSB stage 5 | E-money institutions and credit institutions | At least 30% in bank deposits (60% if significant) | Prohibited under MiCAR |
| United Kingdom | Bank of England and FCA proposals; FSB stage 4 | Non-banks; banks under the PRA approach | Systemic: at least 40% at the Bank of England, up to 60% in short-term gilts | Bank of England and FCA propose a prohibition |
| Hong Kong | In effect since 1 August 2025; FSB stage 5 | HKMA licensees, including banks | Full backing; deposits of up to three months, securities of up to one year | Prohibited |
| Singapore | Framework finalised 15 August 2023; FSB stage 4 | Issuers of Singapore dollar or G10 single-currency coins | Composition, valuation, custody and audit requirements | Not specified in the 2023 release |
| Canada | Legislation announced 4 November 2025; FSB stage 2 | To be set in legislation | Adequate reserves required | Not yet specified |
Source: US Congress (GovInfo), Public Law 119-27, Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), 18 July 2025; Financial Stability Board, Thematic Review on FSB Global Regulatory Framework for Crypto-asset Activities: peer review report, 16 October 2025; European Securities and Markets Authority, Statement on the provision of certain crypto-asset services in relation to non-MiCA compliant ARTs and EMTs, 17 January 2025; European Systemic Risk Board, Crypto-assets and decentralised finance: report on stablecoins, crypto-investment products and multi-function groups, 20 October 2025; Bank of England, Proposed regulatory regime for sterling-denominated systemic stablecoins (consultation paper), 10 November 2025; Financial Conduct Authority, CP25/14: Stablecoin issuance and cryptoasset custody, 28 May 2025; Hong Kong Monetary Authority, Implementation of regulatory regime for stablecoin issuers, 29 July 2025; Hong Kong Monetary Authority, Guideline on Supervision of Licensed Stablecoin Issuers, 29 July 2025; Monetary Authority of Singapore, MAS Finalises Stablecoin Regulatory Framework, 15 August 2023; Department of Finance Canada, Budget 2025: Canada Strong, Chapter 1, 4 November 2025.
What it means for banks
Banks meet stablecoins in three roles: as issuers, as holders of reserves and as competitors for deposits. Each regime weights these differently.
The deposit question drives the most restrictive designs. The ESRB said stablecoins and traditional finance are increasingly intertwined, including through reserves held at commercial banks. The risk is not theoretical: after Silicon Valley Bank failed in March 2023, Circle disclosed USD 3.3 billion of USDC reserves at the bank, followed by USD 3.0 billion of net redemptions in three days. The Bank for International Settlements argued in its Annual Economic Report on 29 June 2025 that stablecoins fall short of the tests of singleness, elasticity and integrity needed to be the mainstay of the monetary system.
Capital treatment is the other open front. The Basel Committee's cryptoasset standard, first published in December 2022, was amended on 17 July 2024 to tighten the criteria for stablecoins to receive preferential treatment, with implementation by 1 January 2026. In the United States, the GENIUS Act already bars regulators from requiring banks to hold capital against custodied stablecoins and their reserves, except to mitigate operational risk.
Banks are responding with their own structures. On 25 September 2025 ING, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB, CaixaBank and Raiffeisen Bank International announced a MiCAR-compliant euro stablecoin, to be issued through a Dutch company seeking an e-money institution licence from the Dutch central bank, with initial issuance expected in the second half of 2026. On 10 October 2025 Banco Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank, TD Bank Group and UBS said they were jointly exploring a 1:1 reserve-backed form of digital money on public blockchains, focused on G7 currencies. Both projects are led by banks rather than by non-bank issuers.
Where banks fit in each regime
| Regime | Banks as issuers | Banks as reserve holders | Supervisory signal in 2025 |
|---|---|---|---|
| United States | Through approved subsidiaries; tokenised deposits preserved | Deposits eligible, within FDIC and NCUA limits | OCC, FDIC and Federal Reserve withdrew prior approval and notification requirements |
| European Union | One credit institution among 10 issuers of e-money tokens | At least 30% of reserves (60% if significant); 1.5% of assets cap per issuance | EBA opposed loosening reserve-asset standards |
| United Kingdom | Outside the systemic regime; PRA approach applies | Systemic: at least 40% at the Bank of England, the rest in short-term gilts | Holding limits proposed to protect deposits |
| Hong Kong | Banks may be licensees under the Banking Ordinance | Deposits of up to three months eligible | Regime in force; no licence issued at 29 July 2025 |
Source: US Congress (GovInfo), Public Law 119-27, Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), 18 July 2025; Office of the Comptroller of the Currency, OCC Clarifies Bank Authority to Engage in Certain Cryptocurrency Activities (News Release 2025-16), 7 March 2025; Federal Deposit Insurance Corporation, FDIC Clarifies Process for Banks to Engage in Crypto-Related Activities, 28 March 2025; Federal Reserve Board, Federal Reserve Board announces the withdrawal of guidance for banks related to their crypto-asset and dollar token activities, 24 April 2025; Financial Stability Board, Thematic Review on FSB Global Regulatory Framework for Crypto-asset Activities: peer review report, 16 October 2025; European Systemic Risk Board, Crypto-assets and decentralised finance: report on stablecoins, crypto-investment products and multi-function groups, 20 October 2025; European Banking Authority, The EBA responds to Commission's proposed changes to the technical standards on liquidity requirements of the reserve of assets under MiCA, 10 October 2025; Bank of England, Proposed regulatory regime for sterling-denominated systemic stablecoins (consultation paper), 10 November 2025; Hong Kong Monetary Authority, Guideline on Supervision of Licensed Stablecoin Issuers, 29 July 2025; Hong Kong Monetary Authority, Implementation of regulatory regime for stablecoin issuers, 29 July 2025.
What to watch
- End of 2025: the ESRB has asked the European Commission to act on third-country multi-issuer stablecoin schemes.
- 1 January 2026: implementation date of the Basel Committee's amended cryptoasset standard.
- 10 February 2026: the Bank of England's consultation on systemic stablecoins closes, with rules to be finalised in 2026.
- GENIUS Act effective date: the earlier of 18 months after 18 July 2025 or 120 days after final implementing regulations.
- Second half of 2026: expected initial issuance of the nine-bank euro stablecoin.
Primary sources: Bank of England, Proposed regulatory regime for sterling-denominated systemic stablecoins (consultation paper), 10 November 2025; US Congress (GovInfo), Public Law 119-27, Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), 18 July 2025; European Securities and Markets Authority, Statement on the provision of certain crypto-asset services in relation to non-MiCA compliant ARTs and EMTs, 17 January 2025; European Systemic Risk Board, Crypto-assets and decentralised finance: report on stablecoins, crypto-investment products and multi-function groups, 20 October 2025; Financial Stability Board, Thematic Review on FSB Global Regulatory Framework for Crypto-asset Activities: peer review report, 16 October 2025; Hong Kong Monetary Authority, Guideline on Supervision of Licensed Stablecoin Issuers, 29 July 2025; Financial Conduct Authority, CP25/14: Stablecoin issuance and cryptoasset custody, 28 May 2025; US Department of the Treasury, Treasury issues Advance Notice of Proposed Rulemaking on implementation of the GENIUS Act (SB0254), 18 September 2025; Office of the Comptroller of the Currency, OCC Clarifies Bank Authority to Engage in Certain Cryptocurrency Activities (News Release 2025-16), 7 March 2025; Federal Deposit Insurance Corporation, FDIC Clarifies Process for Banks to Engage in Crypto-Related Activities, 28 March 2025; Federal Reserve Board, Federal Reserve Board announces the withdrawal of guidance for banks related to their crypto-asset and dollar token activities, 24 April 2025; Federal Reserve Board, Federal Reserve Board announces it will sunset its novel activities supervision program, 15 August 2025; European Banking Authority, The EBA responds to Commission's proposed changes to the technical standards on liquidity requirements of the reserve of assets under MiCA, 10 October 2025; European Systemic Risk Board, ESRB press release on stablecoins and Recommendation on third-country multi-issuer stablecoin schemes, 20 October 2025; European Central Bank, Eurosystem moving to next phase of digital euro project, 30 October 2025; Hong Kong Monetary Authority, Implementation of regulatory regime for stablecoin issuers, 29 July 2025; Monetary Authority of Singapore, MAS Finalises Stablecoin Regulatory Framework, 15 August 2023; Department of Finance Canada, Budget 2025: Canada Strong, Chapter 1, 4 November 2025; Bank for International Settlements, Annual Economic Report 2025, Chapter III: The next-generation monetary and financial system, 29 June 2025; Basel Committee on Banking Supervision, Basel Committee finalises disclosure framework and targeted amendments to its cryptoasset standard, 17 July 2024; ING Groep, Nine major European banks join forces to issue stablecoin, 25 September 2025; Barclays, Group of leading international banks explores issuance of a 1:1 reserve-backed form of digital money, 10 October 2025.