- Stablecoin adoption is growing, but U.S. consumer usage remains slow due to a lack of incentives.
- The GENIUS Act and EU policy shifts could accelerate global stablecoin integration and regulation.
The stablecoin market is rapidly gaining momentum, with its total market capitalization recently nearing the $250 billion mark, representing approximately 7.5% of the entire crypto sector’s value.
Currently, Bitcoin [BTC] and stablecoins together account for a dominant 73.5% share of the total crypto market cap, a proportion reminiscent of previous cycles marked by altcoin accumulation.
Yet, despite the growing institutional interest and policy developments, consumer adoption remains sluggish.
PayPal CEO weighs in
Throwing light on the matter, PayPal CEO Alex Chriss recently noted that widespread use of stablecoins in the U.S. is still a distant reality.
This he believes is because of lukewarm consumer interest and the ongoing development of regulatory incentives as key roadblocks to mass adoption.
“From a consumer standpoint, there isn’t a real incentive to drive adoption, which is why we are starting to create things like rewards and starting to incentivize users.”
According to PayPal’s CEO, early stablecoin adoption among its users has largely centered around cross-border money transfers.
Chriss said,
“We’re excited for the future of stablecoins. The first use cases are most likely to be cross-border transactions, when you are moving money and you’re paying large fees for cross-border transactions. That is an opportunity to have a fast, secure and inexpensive mode of currency.”
Following this comment, PayPal’s stock experienced a modest uptick, trading at $73.17 with a 0.14% gain, signaling investor optimism about the company’s expanding role in digital finance.
However, the year-to-date stock price has declined by over 14%, indicating that investor concerns still persist.
This might be because, despite launching one of the first stablecoins from a major financial firm in 2023, PayPal has faced challenges in encouraging everyday usage as per CEO Alex Chriss.
Ergo, Chriss acknowledged that while international transfers remain a primary use case, broader adoption in daily financial transactions is still limited.
In fact, as a solution, Chriss also expressed hope that regulatory developments such as the Genius Act could ease restrictions and make cryptocurrency more accessible to the public.
How the GENIUS ACT will pace the stablecoin market
For those unaware, the GENIUS Act, having recently cleared the Senate, now awaits a critical vote in the House of Representatives.
Alongside it, lawmakers are also shaping a second major bill aimed at establishing a clearer market structure for digital assets.
Senator Tim Scott, who leads the Senate Banking Committee, hopes to see this legislation passed by September, with a focus on clarifying regulatory oversight between the SEC and CFTC.
Meanwhile, Senator Cynthia Lummis expressed concern about potential delays, stating she’d be “extremely disappointed” if both bills fail to pass before 2026.
If approved, these legislative efforts could set clear rules for stablecoins and crypto assets, bringing innovation while enhancing user protection, though the path to final passage remains uncertain as further revisions and debates may still lie ahead.
In May, PayPal’s blockchain head Jose Fernandez da Ponte also discussed PYUSD adoption and upcoming regulatory challenges at Consensus 2025 where he highlighted the same, when he said,
“I think that getting that legislation in place is fundamentally important, not only for us, but for the sector in the US more generally.”
European Union too joins the race
This coincided with the European Union appearing ready to open its doors to stablecoins issued outside the bloc, despite resistance from Europe’s central bank.
According to a recent Financial Times report, the European Commission is preparing to release guidance that would treat foreign-issued stablecoins as equivalent to their European-branded counterparts.
This move, seen as a regulatory breakthrough, could dramatically boost the presence and utility of non-EU stablecoins across European markets, signaling a broader shift in global digital finance integration.
