Stablecoin

Stablecoin issuance has skyrocketed—from $62 billion in 2021 to approaching $250 billion today. Designed to frictionlessly move digital equivalents of fiat currencies or assets on blockchain technology, 99% of stablecoins are currently denominated in US dollars. The US joins a growing group of jurisdictions—including the EU, UK, UAE, and Hong Kong—that have implemented or are actively developing regulations for the next wave of stablecoin growth. Our digital assets team is at the forefront of the technological advances and regulatory developments, and stands ready to help clients capitalize on the potential benefits of this technology while navigating emerging risks and global regulatory regimes.

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Potential Benefits & Use Cases

With stablecoins, businesses and consumers can transact in dollars at the speed of light. Transactions may become cheaper and faster, with less counterparty and foreign exchange risk. Stablecoins offer a host of potential benefits including:

Cross-border payments and remittances
Faster settlement
Cheaper transactions
Operational and compliance efficiencies
Financial inclusion
Decentralization
Smart contract integration
Hedging against inflation
Ease of integration
Blockchain ecosystem growth

How We Can Help

Our lawyers have deep experience helping companies across the digital asset industry and understand the significant opportunities for our clients—both digital asset natives and new entrants.

Issuers

Our experience includes working closely with stablecoin issuers for nearly a decade. With US regulatory clarity now an imminent reality, the number of issuers globally will continue to soar. Incumbents and new entrants will face heightened competition, which in turn will drive further innovation and bespoke solutions. Global commerce requires a global law firm. Our team helps issuers to seize opportunities while seamlessly managing regulatory complexities worldwide. We assist clients with:

Navigating evolving regulation across agencies and geographies
Establishing new entities and attaining regulatory authorization where required
Managing custody arrangements

Innovators

Technological innovation drives the digital asset industry. Crypto wallets and exchanges (centralized and decentralized) have pushed the industry forward, and payment abstraction solutions and other advancements will continue to catalyze growth and global stablecoin adoption. We guide innovators in this space through the shifting regulatory landscape as financial services infrastructure continues to transition to the digital age. We help innovator clients with:

Regulatory compliance
Data privacy
Intellectual property issues
Mergers and acquisitions
Tax considerations
Competition law issues

Adopters

Stablecoins are the most widely held use case for digital assets today and may offer significant benefits for business-to-business cross-border transactions and remittances—allowing users to transact in their preferred currency with near-instant settlement and reduced costs and counterparty risk. As use grows rapidly and infrastructure advances, stablecoins supported by blockchain may become a payment option for potentially every consumer globally. Our lawyers help businesses around the world to consider how they can incorporate stablecoins into their operations while navigating the applicable regulatory, tax, and legal issues.

Stablecoin Basics

Stablecoins are digital assets designed to keep a stable value relative to a specified asset and are most often pegged to a fiat currency like the US dollar. Think of them like digital versions of a US dollar, euro, yen, or other currency, backed by reserve holdings of Treasury instruments and hard assets. While the EU has already developed a regulatory framework for stablecoins—in the form of electronic money tokens and asset-referenced tokens under its Markets in Crypto-Assets Regulation—the US, UK, and other jurisdictions are poised to follow suit, likely triggering a flood of new entrants seeking the benefits the digital asset market presents.

Insights

Our perspectives on the evolving developments in stablecoins.