In 2025, the stablecoin story is not limited to crypto experiment but has become a mainstream payment and settlement conversation, and with the changing global stance over these large research desks and banks estimate that the worldwide stablecoin market might hit $400 billion by the end of this year.
Today, in this informative piece, we will dive deep to understand why banks want their own stablecoins and what regulators in the United States, Hong Kong, Japan, and Europe changed in 2025.
Why do banks want their in-house stablecoins?
As the global stance on stablecoins has changed, traditional financial institutions, including banks, have been rushing to develop and launch their in-house stablecoin.
Stablecoins, the blockchain-based form of crypto, help settle 24/7 near instantly and at cheaper prices compared to legacy rails. For traditional banks, it has become a new fee source and a way to cut costs on correspondent banking.
Another reason is that when a bank issues a fully backed stablecoin, the backing asset generates interest and can be managed as part of treasury operations.
If corporates and asset managers adopt a private stablecoin bank, the risk of losing control over client cash flow, by the issuance of a branded, regulated coin re-stakes the bank as the trusted settlement layer and keeps client relations and fees in-house.
Why have 2024- 2025 regulations changed the stablecoins category?
In the initial days, crypto and other blockchain-based products were seen as Ponzi schemes, and for the majority of the time, they were termed as fake and harmful investments, but with time, there has been clarity over stablecoins and digital assets, attracting traditional institutions and banks.
Especially in 2024-2025, the stablecoin category has undergone numerous changes and upgrades, and several nations have made the issuance and circulation of stablecoins easier by clarifying the rules over it.
The Genius Act 2025 was passed in the United States, offering a clearer regulatory stance on stablecoins, including reserve and supervision rules and AML/BSA obligations for the issuer and service providers.
It is said that the federal clarity has turned it towards feasibility for insured depository institutions and chartered entities to plan complaint issuance.
Stablecoins Ordinance (2025) of Hong Kong is termed as the second most prominent law that pushed the traditional banks towards the issuance and design of in-house stablecoin.
HK operationalized a licensing regime and supervisory guidelines for fiat-referenced stablecoins, with the HKMA publishing detailed guidance and beginning to accept licence applications.
However, MiCA’s e-money and asset-referenced token rules pushed for issuers’ licensing of high-quality reserve and consumer protection. Yet Japan’s revised and clarified payments regime enabled a licensed yen stablecoin with domestic reserve and custody requirements.