Stablecoins stand at the centre of crypto’s next chapter, with adoption spreading across both technology companies and traditional financial networks. Major non-financial firms such as Amazon and Walmart are reportedly considering stablecoin issuance, while global payment leaders like Visa have expanded their settlement platforms to support stablecoins, enabling seamless on-chain payments without issuing a coin of their own. In policy circles, momentum is just as strong: on July 17 the US Senate passed the GENIUS Act, America’s first federal framework for dollar-backed stablecoins, while Europe’s Markets in Crypto-Assets (MiCA) regime and Hong Kong’s Stablecoins Bill continue to advance.
Closer to home, the UAE is preparing to issue a fully regulated dirham-backed stablecoin, led by ADQ, IHC and First Abu Dhabi Bank, and is progressing on its Digital Dirham central bank digital currency. For finance hubs in the region keen to position themselves at the forefront of regulated digital assets, these developments mark a turning point, showcasing how the Gulf can help set the pace for global standards while exposing untested assumptions and growing frictions that must be addressed for sustainable growth.
Stablecoins have already changed how value moves across the internet. Their ability to settle vast sums instantly and at low cost has made them crypto’s most widely used application. Yet the story is not only about speed and scale. Stablecoin funding has surged in 2025 as the narrative has shifted from speculation to infrastructure. The groundwork was laid in 2024, when total supply kept climbing through the bear market and began rising sharply late in the year.
These yields are quietly reshaping money itself – turning dollars from passive storage into assets that can generate returns. That innovation brings both opportunity and risk, and the race to capture yield can sometimes obscure what really supports a stablecoin’s promise of stability. Not all stablecoins are equal, and rapid growth can still mask fragility. The capital pouring in signals confidence, but long-term credibility will rest on transparency and resilience.
One currency, many rulebooks
Stablecoins promise borderless digital cash, but they now face borders everywhere.
- In the United States, the GENIUS Act has been signed into law, imposing strict reserve and disclosure standards.
- Europe is implementing the MiCA framework, with its own definitions and supervisory approach.
- Hong Kong is finalising a Stablecoins Bill that differs again in licensing and reserve requirements.
- United Kingdom – The Bank of England has proposed limits of GBP 10,000-GBP 20,000 on what individuals can hold in certain systemic stablecoins, and GBP 10 million for businesses.
To reach scale, stablecoins need a regulation-aware architecture: automated checks that adapt to each jurisdiction’s licensing, reserve and disclosure requirements. This approach transforms compliance from a post-launch scramble into an embedded feature. Some jurisdictions are already showing how clear rules can foster innovation. The United Arab Emirates, through Dubai’s Virtual Assets Regulatory Authority (VARA) and Abu Dhabi’s Financial Services Regulatory Authority (FSRA), is setting out technology-neutral rules and, through the planned dirham-backed stablecoin, signalling that clear oversight and practical implementation can go hand in hand. The lesson is clear: regulatory clarity is not a brake on innovation but a launch pad for global reach.
Security UX: Stopping scams before they start
Stablecoins’ value proposition rests on trust, yet crypto scams and hacks have already cost investors nearly $2.5 billion in the first half of 2025. Most attacks are not sophisticated exploits but simple phishing or malicious smart contracts that trick users into approving fraudulent transactions. The solution lies in security-first user experience. Wallets can simulate every transaction before approval, flag suspicious contracts in plain language, and automatically expire token permissions so dormant approvals cannot be abused. These measures should be standard infrastructure, just as chip-and-PIN authentication became standard in card payments. When safety is built in, first-time users gain confidence, and institutional investors can engage without fearing reputational or compliance fallout.
Tokenisation: Transparency as the missing catalyst
Stablecoins are also becoming the settlement layer for tokenised real-world assets (RWAs) such as treasury bills and commercial real estate. The market has already surpassed $25 billion, yet institutional inflows remain cautious. The gap is data transparency. Institutional investors need the same portfolio-grade information they expect from traditional securities – risk metrics, yield histories and real-time stress testing.
Without these, tokenised assets remain peripheral. The answer is high-fidelity, cross-chain data infrastructure. Open, verifiable APIs and dashboards can give regulators and asset managers the continuous insight required for large-scale allocations, helping tokenisation fulfil its promise of deep, programmable capital markets. The next phase for stablecoins is about depth rather than spectacle: deeper liquidity, deeper data, deeper trust. For policymakers, that means harmonising core principles like reserve quality and disclosure so that a stablecoin transfer enjoys the same recognition from New York to Dubai. For builders, it means designing wallets and APIs where compliance and security are native. For the Middle East, it is a chance to demonstrate how early, well-calibrated regulation can attract capital and talent while strengthening consumer confidence.
Done right, stablecoins can move from crypto’s headline success to a permanent layer of global financial infrastructure.
