Despite crypto operators celebrating a stablecoin compromise that would allow activity-based rewards for stablecoin holders, the banking sector remains firmly opposed. On May 4, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America issued a joint statement praising the bipartisan Banking team of Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) for addressing banker concerns, but emphasizing that "the proposed language falls short of the goal of prohibiting the payment of yield and interest on stablecoins." The banks demanded "clear and transparent" prohibition language and warned of potential evasion through "third-party platforms offering rewards for membership programs" and "permissible rewards calculated by reference to duration, balance, and tenure." Banking Committee chair Tim Scott (R-SC) tweeted that his panel was "nearing consensus" on CLARITY and "working toward a bipartisan markup in May to advance digital asset market structure," with hopes of a markup as soon as next week.
Stablecoins have evolved beyond their original trading tool role, with global supply reaching approximately $316 billion according to recent reports. U.S. policymakers have spent the past year building a firmer legal framework for compliant issuers, with the 2025 GENIUS Act passing in July 2025 and ongoing CLARITY Act discussions providing regulatory clarity. As reported by BeInCrypto, the OCC has already proposed implementing regulations for the GENIUS Act, with federal agencies required to finalize rules by July 18, 2026. This regulatory progress is helping turn stablecoins from shadow market products into legitimate financial infrastructure.
Latin America has emerged as a pioneer in stablecoin adoption, with the region's on-chain volume climbing 60% last year to over $730 billion, propelled by stablecoin growth. According to GO Markets data, $324 billion came from stablecoin transactions, up 89% year-on-year. Among Latin American countries, Brazil and Argentina stand out for their impressive stablecoin activity, with over 90% of crypto flows in Brazil tied to stablecoins and Argentina accounting for at least 60%. As reported by Fireblocks, roughly 7 out of 10 people in the region use stablecoins for international transfers because they're tired of losing significant portions of their paycheck to bank fees. The use of digital currencies for retail payments is also rising, with Venezuela having the highest stablecoin penetration at 34% of retail activity across LATAM.
A major factor behind stablecoin adoption in LATAM is the explosive growth of the fintech sector, with the region hosting over 20 unicorns and Latin America and the Caribbean now having over 3,000 fintech firms. Nubank alone has scaled to 118 million customers, reaching more than 60% of adults in Brazil and expanding into Mexico and Colombia. The fintech sector is expected to expand at a 27% compound annual growth rate from 2022 to 2028. As Sthefano Batista from OpenTrade noted, "access to fintech platforms gives digital currencies an immediate pool of potential users" and bridges the gap between stablecoins and daily life. Leandro Davo from Avalanche emphasized that "crypto assets are no longer a passing phase but rather a more consistent trend in the region."
Industry experts are raising concerns about the concentration of stablecoin market power in the hands of Tether and Circle, despite their combined market dominance. Ben O'Neill, head of money movement at Bridge, warned that "the stablecoin universe, dominated by Tether and Circle, hampers competition that could lead to better product-market fit for some important use cases." Tether's USDT has a market capitalization of approximately $189.5 billion, while Circle's USDC has grown to around $71 billion. O'Neill highlighted specific challenges for payments companies, noting that "Tether burns for 10 basis points, which is crazy expensive for a payments company, or you can trade on the open market, which means I have no certainty." For large financial institutions, "Circle's whole business is AUM, and they keep notching up those burn fees, so if I'm someone like Visa, and I want to do trillions of dollars of card settlement and stablecoins, I'm burning a bunch of USDC, and that's gonna be a net bad." The solution, according to O'Neill, is "more stablecoins built for specific use cases, so they can be optimized for those use cases," with the rise of clearing houses to make stablecoin swapping more efficient.
