Stablecoins: What We Know – with a Little Help from the Podcast Crowd

The Milken Institute Review has published our comprehensive overview of the rapidly evolving stablecoins market following the passage of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which establishes a dual federal and state regulatory framework. Below is a summary of what you’ll find in the report.

Market Growth & Concentration: The USD stablecoin market grew to nearly $300 billion in 2025, with bullish estimates reaching $4 trillion by 2030. The market is highly concentrated, with Tether (USDT) and Circle (USDC) controlling over 85% of the total circulation.

The GENIUS Act Framework: Compliant issuers must back stablecoins 1:1 with High-Quality Short-Term Liquid Assets (HQLA) like U.S. Treasury bills and reverse repos, and are prohibited from paying interest directly to holders. Noncompliant or offshore stablecoins (like Tether) continue to circulate but hold mixed reserves, including riskier assets like cryptocurrencies and corporate bonds.

Benefits & Use Cases: An Andersen Institute AI survey of expert podcasts highlights major benefits, including lowering cross-border transaction costs, shortening settlement times, continuous 24/7 payment access, and acting as a stable medium for decentralized finance (DeFi) and cryptocurrency trading.

Systemic Risks: Despite new regulations, experts warn of significant risks to financial stability. These include old-fashioned bank runs (liquidity risk), credit risk from uninsured bank deposits, operational/cyber vulnerabilities, and a high association with illicit finance and sanctions evasion.

Regulatory Gaps: The GENIUS Act leaves notable gaps, such as denying stablecoin issuers access to public liquidity backstops (like the Federal Reserve discount window) or federal deposit insurance (FDIC).

You can read the full, detailed analysis here: Stablecoins: What We Know – Milken Institute Review.