U.S. Regulation

Why the US Must Regulate Stablecoins to Compete with China

Editorial Team
2 min read
Published: November 19, 2025
Updated: November 19, 2025

Competing with China’s digital payment scale demands clear stablecoin rules and interoperability.

U.S. crypto regulationChinastablecoinsSection:Stablecoins

Why the U.S. Must Regulate Stablecoins to Compete with China

Strategic framing: China’s digital finance stack (super‑apps, QR payments, instant settlement) sets a high bar for user experience and scale. For the U.S. to compete, it needs compliant stablecoin rails with bank/clearing integrations, transparent reserves, programmable logic, and cross‑border corridors. This piece contrasts playbooks, outlines policy needs, and defines success metrics.

1) China’s digital stack vs U.S. rails

China:

  • Super‑apps with embedded finance; QR ubiquity; instant P2P and merchant settlement
  • Centralized data flows; integrated KYC and risk systems

U.S. (status quo):

  • Fragmented rails (cards, ACH, wires); batch settlement; higher fees
  • Disconnected identity and compliance vendors; latency and reconciliation costs

2) Why stablecoins are the U.S. response

  • 24/7 programmable settlement with refunds/chargebacks
  • Transparent FX for cross‑border; ERP/tax connectors
  • Reserve dashboards and audited flows build trust

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3) Policy requirements

  • Clear issuer rules (reserves, audits, redemption SLAs)
  • Bank/clearinghouse interop standards; corridor policy maps
  • Suitability and education for retail; fee caps and transparency

4) Cross‑border competitiveness

  • Dollar preference where local rails are weak; merchants favor transparent fees
  • Stablecoin corridors improve settlement reliability and trade finance

5) KPIs to track competitiveness

  • Corridor volumes; settlement latency; rejection/refund cycles
  • Reserve audit cadence; dashboard uptime; incident MTTR
  • Merchant adoption and retention; B2B treasury usage

6) Risks and mitigations

  • Geopolitical friction and local compliance → interop, local reporting, outreach
  • Peg stress → diversified reserves, stress tests, transparent communication

7) Action checklist

  • Regulate audited fiat‑backed issuers; enforce dashboards and SLA redemptions
  • Integrate banks and clearinghouses; publish corridor maps and tax connectors
  • Support merchant SDKs and enterprise ERP integrations

8) Internal link network

9) Conclusion

Competing with China is not about copying super‑apps; it’s about upgrading the dollar’s settlement fabric. Regulated stablecoin rails, integrated with banks and clearinghouses, deliver instant, programmable, and auditable flows — a competitive response grounded in U.S. strengths: transparency, rule of law, and market choice.

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