On Thursday, the U.S. Senate will hold a key procedural vote on the American Stablecoin Innovation and Growth Act (GENIUS Act), which will determine whether stablecoin regulatory legislation will move to a substantive advancement stage. If the vote passes, the stablecoin industry will see its first clear federal regulatory framework.

On the day before the vote, payment service provider Stripe announced the launch of Stablecoin Financial Accounts, allowing users and businesses to hold stablecoin balances within Stripe, transact funds using fiat and crypto rails, and circulate them through its global fiat payment network, which currently spans 101 countries and regions.

The account supports two stablecoins—USDC (issued by Circle) and USDB (self-issued by Bridge). USDB is a closed-loop stablecoin that circulates only within the Stripe platform and is not open to public trading. Both stablecoins are pegged 1:1 to the U.S. dollar, with underlying assets including cash and a short-term money market fund managed by BlackRock.

In 2024, Stripe acquired Bridge for $1.1 billion, marking its largest acquisition to date. Bridge possesses full capabilities in stablecoin issuance, custody, and settlement, having served clients such as Coinbase and SpaceX. Bridge has now been integrated into Stripe's on-chain account infrastructure system, handling stablecoin issuance and custody services, signaling Stripe's transition from a "crypto payment gateway" to an "on-chain financial infrastructure provider."

While Stripe claims to support registered businesses in 101 countries and regions, major financial markets including the U.S., mainland China, Hong Kong, Singapore, and Japan are currently not on the open list.

A Reentry into Crypto: Stripe's Crypto Journey

Founded by Irish brothers Patrick and John Collison in 2009, Stripe became one of the early major companies to accept Bitcoin payments as early as 2014. However, its cryptocurrency plans came to an end in 2018 with a failure, citing Bitcoin's high volatility and instability as reasons. In that year, Bitcoin plummeted from its December 2017 high of $19,650 to $3,401 by the end of 2018.

After years of absence, Stripe announced its return to the crypto industry in 2022, focusing on infrastructural areas such as KYC, fraud detection, and stablecoin payments. It has partnered with crypto projects like Polygon and OpenNode.

In March 2023, Stripe achieved a $500 billion valuation through a $6.5 billion Series I funding round. Investors included a16z, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, Thrive Capital, GIC, Goldman Sachs, and Temasek.

Starting in April 2024, Stripe announced support for USDC stablecoin payments on Solana, Ethereum, and Polygon. It successively integrated with the Avalanche network, announced a strategic partnership with Coinbase, and added support for Base network to its crypto product suite.

Related Read: "After 6 Years of Accepting Crypto Again, Is Stripe Joining PayPal in Crypto Payment Competition?"

On October 21, 2024, Stripe announced the acquisition of the stablecoin platform Bridge for $1.1 billion, enabling it to optimize cross-border payment solutions and expand stablecoin payment infrastructure. This is Stripe's largest acquisition to date and the largest in the history of the cryptocurrency industry.

Related Read: "Largest Acquisition in Web3 History: What Exactly is Stripe's $1.1 Billion Acquisition of Bridge?"

In February of this year, Stripe officially completed the acquisition of Bridge, marking the official start of its significant layout in the stablecoin field.

By the end of April, Stripe indicated that it is developing a new stablecoin product supported by Bridge technology. Companies eligible for the testing phase are those headquartered outside the US, EU, or UK, and looking to access a USD channel. This stablecoin product is one of the stablecoins supported by Stripe's stablecoin financial account support announced this morning: USDB.

It is worth noting that USDB has adopted a more platform-oriented incentive mechanism—the Bridge returns part of its stablecoin's underlying revenue to developers. This mechanism, akin to on-chain interest sharing, is not common in traditional financial structures, perhaps indicating that Stripe is exploring revenue sources beyond stablecoin profitability.

The stablecoin payment feature introduced last year focused on enabling merchants to accept payments, emphasizing the immediacy of transactions and fiat settlement, addressing efficiency issues in the payment process. Now, the launch of stablecoin accounts signifies that Stripe has completed a closed-loop build from payment integration, network support, to stablecoin issuance and custody. It is more like a comprehensive financial account, allowing users to hold and manage stablecoin balances, supporting a wider range of financial use cases (such as savings, transfers, future card payments), not limited to payment scenarios.

The Smoke of the Stablecoin Payment War

Unlike PayPal's introduction of the publicly circulating PYUSD, Stripe has taken a more cautious approach to stablecoins, with its USDB restricted to internal platform use only. This "controlled closed-loop" strategy is more aligned with Apple's product philosophy than the open Web3 concept.

However, Stripe's launch of a stablecoin financial account undoubtedly intensifies the increasingly fierce competition in the stablecoin payment race, with more and more traditional financial institutions entering this field. According to the Financial Times, some of the world's largest banks and fintech companies are eager to launch their own stablecoins, aiming to capture a share of the cross-border payment market that they expect to be reshaped by cryptocurrency.

Last month, Bank of America stated its intention to issue its own stablecoin, joining established payment providers such as Standard Chartered, PayPal, Revolut, and Stripe in the race, aiming to compete with cryptocurrency groups like Tether and Circle. In addition to Bank of America, other major traditional financial participants are also preparing for the development of stablecoins.

In the payment race in major markets abroad, PayPal is Stripe's most significant competitor, with Stripe targeting businesses of all sizes while PayPal focuses on small businesses. In 2023, PayPal holds 42.35% market share, Stripe holds 19.44% market share, Shopify Payments holds 12.42% market share, and Amazon Pay holds 4.76% market share.

Back in 2023, PayPal had already launched the dollar-pegged stablecoin PYUSD. Despite facing an SEC investigation, on April 30, the SEC announced the termination of its investigation into PayPal's dollar-pegged stablecoin PYUSD without taking enforcement action.

At the same time, Tether is actively expanding its stablecoin ecosystem, not only strategically investing in the fintech company Fizen but also planning to launch a new US dollar-backed stablecoin in the United States this year. This move comes as Tether, once dubbed the preferred cryptocurrency of criminals, repositions itself as a partner to US lawmakers and law enforcement agencies.

In addition, JD.com has entered the Hong Kong stablecoin "sandbox" testing phase; in the past two days, insiders have indicated that Futu Securities is internally testing support for USDT and USDC deposit transactions; and last night, Visa announced an investment in stablecoin payment infrastructure startup BVNK.

As cryptocurrency researcher YettaS stated, the field is no longer a playground for new players, and the core of stablecoin competition has always been about channels—whoever controls the currency's use cases controls the stablecoin's moat. Imagine Amazon and Walmart issuing their stablecoins, settling transactions internally within their systems; isn't this a replay of Alipay's path in the past?

From bank cards to electronic payments, and now to stablecoins, this is the third-generation payment war. However, this war has long transcended payment itself because it leads to the gateway of monetary value and the corporate-led reshaping of coinage rights.

Breakthrough Expected in US Stablecoin Regulatory Bill

The significant participation of numerous traditional companies in the stablecoin race is closely tied to the gradual clarity of US crypto regulation and stablecoin legislation.

In February of this year, US crypto-friendly Senator Cynthia Lummis stated at the first hearing of the Senate Banking Subcommittee on Digital Assets, "We are about to establish a bipartisan legislative framework for stablecoins and market structure." At the White House's inaugural crypto summit, Trump expressed his hope to receive the stablecoin legislation bill before the August congressional recess to advance federal government regulatory reform on cryptocurrencies and reiterated his desire for the dollar to "maintain its long-term dominant position."

US Treasury Secretary Scott Bessent pledged to leverage digital assets to strengthen the US dollar's global reserve currency status. In his speech, he stated, "We will give serious thought to the stablecoin system. As directed by President Trump, we will maintain the US's position as the world's leading reserve currency, and we will use stablecoins to achieve this."

These statements highlight the US government's concerns about macroeconomic and geopolitical uncertainty that could lead to a reduced demand for US bonds by foreign investors, thereby driving up bond yields. In the past year, the two largest holders of US debt, Japan and China, have continued to divest US bonds. To maintain the US dollar's global reserve currency status, it is imperative to ensure a consistent demand for US bonds in the international market.

Read more:《Why Did $900 Billion Vanish From the Crypto Market While Stablecoin Market Cap Hit a New High?》

By holding US Treasury bonds as reserve assets, stablecoins can help lower government bond yields and expand the global circulation of the US dollar. Stablecoins need to hold sufficient US dollars to meet investor redemption demands, and currently, Tether is one of the largest holders of US Treasury bonds with a three-month maturity. JPMorgan Chase stated that the stablecoin market could grow to between $500 billion and $750 billion in the coming years. Assuming that 70% is allocated to US Treasuries and 30% is allocated to Treasury repurchase agreements, stablecoin issuers would become the third-largest buyers of US Treasury bonds.

The total market value of stablecoins has surged by $500 billion since Trump was elected; Source: DeFiLlama

On a policy level, the US has proposed two stablecoin bills—the House's Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act and the Senate's Guaranteeing Easy Access to New and Emerging Technologies to Improve Financial Networks (GENIUS) Act. These aim to regulate stablecoin issuers through licensing requirements, risk management rules, and 1:1 reserve backing, requiring stablecoins to be 100% backed by the US dollar or other liquid assets such as short-term government bonds.

These two bills propose different frameworks but converge on strict compliance measures. Both support privately issued, US dollar-backed stablecoins and prohibit central bank digital currencies (CBDC).

On May 7, Senate Majority Leader John Thune has filed for cloture on the stablecoin GENIUS Act, with a key procedural vote scheduled for Thursday. The bill requires 60 votes in favor, with the current Senate composed of 53 Republicans and 47 Democrats, meaning Republicans need to secure at least 7 Democratic votes.

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