Congress Passes Three Crypto Bills: Citi, JPMorgan, and Bank of America Enter the Stablecoin Race
July 18, 2025
The United States has taken a historic step toward regulating digital assets, with the House of Representatives approving three landmark cryptocurrency bills by a wide bipartisan margin. These measures — the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act — set out rules for stablecoin reserves and redemption, define digital asset market structures, and limit the creation of a federal digital currency without Congressional consent. Together, they represent the most comprehensive framework the US has ever offered for the crypto sector.
This wave of regulatory clarity is prompting decisive action from traditional finance. Banking powerhouses such as Citi, JPMorgan, and Bank of America are now openly advancing plans for stablecoin issuance and tokenized deposit systems. What once lived on the fringes of crypto experimentation is rapidly evolving into a core component of institutional financial infrastructure.
Circle's IPO has reset investor expectations for crypto-native companies, with public markets valuing on-chain businesses based on revenue and regulatory alignment. The next breakout opportunities may come from infrastructure providers with real transaction volume, compliance frameworks, and balance sheet durability.
As payment "commoditization" accelerates, the gap between traditional banks' operational costs and stablecoins' near-zero transaction fees is being rapidly priced by Wall Street, signaling mainstream market acceptance of digital assets as compliant financial infrastructure.
Stablecoin Market Cap Analysis and Growth Metrics
Total stablecoin market capitalization reached $260.728B, reflecting significant week-over-week growth of $3.69B. USDT maintains dominance with 61.99% market share, while USDC strengthens to 24.57% ($64.068B) as regulatory compliance becomes increasingly valuable for institutional adoption.
Fastest-Growing Blockchain Networks: Hedera leads with +30.93% growth (USDC dominance: 99.63%), followed by Hyperliquid L1 (+23.27%) and XRPL (+15.06%).
Stablecoin Distribution Leaders: Ethereum ($128.832B), Tron ($81.268B), and Solana ($11.342B) continue dominating cross-chain stablecoin infrastructure.
Data Source: DefiLlama
US Congressional Crypto Legislation Breakthrough
The US House passed three foundational digital asset bills with overwhelming bipartisan support, establishing long-awaited regulatory clarity for stablecoin infrastructure and cryptocurrency markets.
GENIUS Act Framework The GENIUS Act establishes comprehensive reserve, redemption, and disclosure requirements for payment stablecoins, providing clear compliance pathways for institutional issuers. Previously stalled due to concerns over CBDC language, the bill gained bipartisan backing and is expected to be signed into law, signaling stablecoin regulation's shift from political division to policy consensus.
Coordinated Digital Asset Strategy The CLARITY Act establishes market structure rules for broader digital assets, marking the first federal attempt to define boundaries between tokenized securities, commodities, and utility tokens. The Anti-CBDC Surveillance State Act explicitly restricts the Federal Reserve from issuing central bank digital currencies without Congressional authorization, preserving space for private innovation.
American Regulatory Export Model These three bills form a coordinated regulatory framework: green-lighting compliant stablecoins, establishing clear digital asset market rules, and limiting government-issued digital currencies. This represents core American regulatory philosophy supporting private innovation while opposing government control, potentially creating a "libertarian template" for global policy export.
Cobo's Take: The legislative breakthrough transforms stablecoins from experimental cryptocurrency to regulated financial infrastructure. The coordinated approach preserving private innovation while restricting government digital currency creates a clear competitive advantage for US-based stablecoin issuers and infrastructure providers.
Traditional Banking Giants Enter Stablecoin Infrastructure
As the GENIUS Act advances through Congress, major US banks are responding with unprecedented public commitments to stablecoin development and tokenized deposit frameworks.
Wall Street's Coordinated Entry Major banking institutions including Citi, JPMorgan, and Bank of America have confirmed active stablecoin development programs, including proprietary token issuance, tokenized deposits, and "banking consortium stablecoin" frameworks.
Regulatory Advantage Architecture The GENIUS Act creates a "native advantage zone" for banks through institutional design. While the bill sets high thresholds for issuers—100% US Treasury reserves, monthly audits, capital requirements—these represent basic operations for banks but significant barriers for non-bank institutions.
Banks gain exclusive privileges: direct access to core clearing systems like Fedwire and FedNow, unlocking deep integration with USD payment networks; credit creation through "tokenized deposits" within existing regulatory frameworks; legal authority to pay interest to users; and potential future SLR exemptions for Treasury holdings.
Defensive Infrastructure Strategy Stablecoin user behavior is eroding core banking functions. Enterprise clients increasingly hold USDC and USDT long-term for supply chain payments and liquidity management, meaning funds no longer flow back to traditional account systems but remain in issuer reserve pools, circulating on-chain repeatedly.
Banks are countering with "tokenized deposits," transforming deposit assets into programmable on-chain assets while preserving regulatory frameworks, enhancing liquidity, compatibility, and client retention.
Cobo's Take: The banking industry's coordinated stablecoin entry represents defensive infrastructure positioning rather than innovation leadership. Banks recognize that stablecoins are becoming essential payment rails, and early regulatory compliance provides competitive advantages in institutional markets.
Post-Circle IPO Infrastructure Investment Opportunities
Circle's successful IPO has validated the stablecoin business model, with stock surging nearly six-fold to reach market capitalization approaching 70% of USDC circulation—one of the most dramatic valuation corrections in recent IPO history.
Next-Generation IPO Candidates According to The Block's analysis of VC interviews, the next batch of IPO-ready crypto-native companies clusters around four key areas:
Trading and Brokerage Platforms: Kraken (publicly expressed interest), Gemini, and Bullish (reportedly filed S-1) with established revenue streams and regulatory compliance.
Enterprise Crypto SaaS: Chainalysis, Alchemy, and Consensys offering software solutions with predictable revenue models and compliance frameworks.
Cross-Border Payment Networks: Non-USD stablecoins and international clearing networks accumulating real transaction volume and regulatory compliance pathways.
Diversified Revenue Models Projects with clear corporate structures and multiple revenue streams show medium-term IPO potential, including MetaMask (under Consensys), Flashbots (on-chain sequencing infrastructure), and Digital Currency Group (multi-line holding company).
Cobo's Take: Circle's IPO success demonstrates that public markets will reward crypto-native companies with real cash flows, predictable revenue, and clear compliance pathways. The infrastructure layer—rather than speculative tokens—represents the most viable path to public market acceptance.
Traditional Finance Integration Acceleration
Snail Games Stablecoin Development: US gaming company SNAL is considering launching its own USD stablecoin, bringing on AscendEX founder George Cao as advisor, signaling stablecoin expansion beyond traditional finance into gaming economies.
UK Government Blockchain Strategy: The UK government is aggressively positioning itself as a global crypto hub by backing DLT and asset tokenization in wholesale financial markets through cross-market working groups and digital securities sandboxes.
Citi Stablecoin Confirmation: Citi CEO Jane Fraser confirmed the bank is exploring a "Citi stablecoin" while prioritizing tokenized deposits as their main digital asset strategy, building comprehensive capabilities across reserves, conversion, and custody.
JPMorgan Stablecoin Expansion: JPMorgan CEO Jamie Dimon confirmed the bank will pursue stablecoin development, including expanding "JPM Coin" despite his personal crypto skepticism, recognizing blockchain payments as faster and cheaper than legacy systems.
Bank of America Development: Bank of America CEO Brian Moynihan confirmed active stablecoin capability development, putting BofA alongside JPMorgan and Citi in the emerging Wall Street stablecoin race.
New Blockchain Infrastructure Launches
Privacy Pools Multi-Asset Expansion: Privacy Pools launched multi-asset expansion with Sky's USDS stablecoin integration, using zero-knowledge proofs to ensure regulatory compliance while maintaining privacy features.
RippleX Metadata Standard: RippleX introduced the XLS-0089d draft standard for structured metadata on XRP Ledger, enhancing token discoverability and interoperability across stablecoins and Real World Assets.
Dakota Digital Bank: Ex-Coinbase executive Ryan Bozarth launched Dakota, a stablecoin-powered digital bank that raised $12.5 million Series A, processing $1.6 billion in transactions with 500+ business clients.
Plasma Token Sale: Plasma launched a public token sale targeting $50 million at $500 million valuation to build zero-fee stablecoin payment network combining Bitcoin security with Ethereum smart contracts.
Regulatory Compliance and Policy Developments
FSB G20 Stablecoin Priority: FSB Chair Andrew Bailey elevated stablecoins to top G20 priority, pushing for accelerated implementation of agreed-upon regulations and assessment of their payments role.
Federal Banking Crypto Custody: The Federal Reserve, FDIC, and OCC jointly confirmed banks can offer crypto custody services under existing laws with robust risk management frameworks.
Ripple MiCA License Application: Ripple is preparing to apply for MiCA license through newly established Ripple Payments Europe S.A. in Luxembourg, positioning for European Economic Area expansion.
Circle OCC Banking License: Circle applied to the OCC for the first US digital currency bank license, focused exclusively on USDC trust functions, reserve management, and institutional crypto custody.
Trump Crypto Tax Exemption: The Trump administration continues pursuing de minimis tax exemption for crypto transactions, aiming to eliminate tax friction on everyday purchases.
Wyoming Stable Token Pilot: Wyoming is piloting Wyoming Stable Token (WYST) on Avalanche to enable real-time payments to government contractors, cutting processing times from 45 days to seconds.
China Industrial Digital Assets: China's Ministry of Industry and Information Technology held seminars on stablecoins and industrial digital assets, exploring integration into industrial internet alongside Real World Asset tokenization.
Market Analysis and Future Projections
Treasury Market Transformation Standard Chartered's Geoff Kendrick predicts stablecoins will fundamentally reshape US Treasury markets once they hit $750 billion, up from today's $240 billion. He expects the market to triple by end-2026 as regulatory clarity emerges, potentially forcing Treasury to adjust bond issuance strategies.
International Payment Infrastructure Chinese researcher Zhu Taihui suggests that while stablecoins may indirectly increase demand for US treasuries, they're primarily designed as alternative international payment infrastructure rather than debt financing solutions, potentially bypassing traditional SWIFT and CHIPS payment rails.
Cobo's Take: The convergence of regulatory clarity, banking integration, and institutional adoption suggests stablecoins are transitioning from experimental cryptocurrency to essential financial infrastructure. The companies building compliant, scalable infrastructure layers are positioned to capture significant value as this transformation accelerates.
The Banking Infrastructure Revolution
The regulatory breakthrough represents a fundamental shift in stablecoin market dynamicas. Congressional passage of comprehensive digital asset legislation, combined with coordinated entry from major banking institutions, validates stablecoins as essential financial infrastructure rather than speculative cryptocurrency experiments.
Traditional banks' defensive positioning through tokenized deposits and proprietary stablecoin development demonstrates recognition that digital payment rails are becoming competitive necessities. The infrastructure providers building compliant, API-driven solutions for embedded finance are positioning themselves as the foundational layer for this transformation.
As regulatory frameworks crystallize globally and institutional adoption accelerates, the competitive landscape is evolving from token speculation to comprehensive service platforms that make programmable money invisible and ubiquitous across traditional business operations.
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