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For years, stablecoins have been marketed as crypto’s potential bridge to normal, everyday payments — or at least what most people consider to be normal.

In 2025, they seemed to have made the jump from a promising prospect to a tool increasingly used by institutions, banks, and even previous crypto non-believers.

Total transaction volumes for stablecoins surged by 72% last year, reaching a massive $33tr (€28tr), according to data from Artemis Analytics.

Stablecoins are crypto assets designed to maintain a stable value by pegging their worth to a real-world asset such as the US dollar. Essentially, they represent a digital copy of a circulating currency.

Since cryptocurrencies are not typically controlled by regular banking institutions and their circulation is not regulated by the monetary policies of governments, monetary institutions were reluctant to use them in their transactions.

Unlike other crypto assets, stablecoins aim to maintain a fixed value relative to a government-issued currency and are backed by that currency, as well as other reserves like treasury bills, to guarantee the token can be redeemed on a 1:1 basis.

Over 90% of stablecoins in circulation today are pegged to the US dollar. The two largest are Tether’s USDT, with a market cap of $186bn (€160bn), and Circle’s USDC, with a market cap of $75bn (€65bn). In 2025, Circle facilitated $18.3tr (€15.7tr) worth of transactions, while USDT racked up $13.3tr (€11.4tr) in transaction volume.

Back in October, a report by a16z, a California-based venture capital firm, also attempted to measure organic stablecoin payments in 2025. The fund concluded that on an adjusted basis, stablecoins had done at least $9tr (€7.7tr) in “real” user payments. This value indicates an 87% increase from 2024 and the report states “it is more than five times PayPal’s throughput and more than half of Visa’s”.

As financial institutions turn their attention to stablecoins, key institutions like the International Monetary Fund are advocating for cooperation among economic blocs to build an international framework for the sector.

However, the current approach to stablecoin issuance and regulation differs significantly among governments in the EU, US, China, and other parts of the world.

What are CBDCs?

Besides stablecoins that are issued and supported by private entities and reserves, central bank digital currencies (CBDCs) have emerged.

These are also digital versions of government-issued currencies, backed by the issuing central bank. However, they do not use decentralised blockchain technology in their core transaction system.

According to McKinsey, cash still accounts for 46% of payments worldwide as of 2025, but non-digital transactions are declining, particularly in developed countries with greater digital infrastructure and financial inclusion.

Governments and central banks understand these changing payment trends, and in many countries, CBDCs offer a viable solution.

China launched its digital yuan (e-CNY) as part of a pilot project in 2019 and the roll-out has since expanded.

As for the EU, the European Central Bank is currently working on a digital euro. In October 2025, the ECB announced that the preparation phase had concluded.

The President of the ECB, Christine Lagarde, stated that “we have done our work, we have carried the water, but it’s now for the European Council and certainly later on for the European Parliament to identify whether the Commission’s proposal is satisfactory”.

The Eurosystem is aiming for a first issuance in 2029.

Trump’s stablecoin strategy

Under the Trump administration, the US has taken the exact opposite approach to CBDCs, in favour of stablecoins.

In his first week in office, back in January 2025, President Trump signed an executive order “prohibiting agencies from undertaking any action to establish, issue or promote CBDCs in the US or abroad”.

This cleared the way for USDT, USDC, and all other privately issued US dollar stablecoins to continue to dominate the market without having to compete with an “official” version.

In July 2025, Trump also signed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), creating a comprehensive regulatory framework for stablecoins.

Among other provisions, the law requires stablecoin issuers to maintain full reserve backing of their token, on a 1:1 basis, with liquid assets such as US dollars, treasury bills, and bonds.

For the Trump administration, if a US dollar stablecoin issuer is successful, that means they will progressively increase their supply, which requires them to constantly purchase US debt for their reserves.

Stablecoin regulation in the EU

In China, the introduction of the digital yuan also meant the explicit prohibition of stablecoins in the mainland.

However, in the EU, the looming launch of the digital euro has not translated into stablecoin bans.

For now, stablecoin adoption is growing in Europe and stablecoin issuers, together with other crypto firms, have a compliance framework under the EU’s Markets in Crypto-Assets (MiCA) regulation.

By July of this year, the transition period ends for securing a Crypto-Asset Service Provider (CASP) licence, required to operate legally.

The France-based multinational payments provider, Ingenico, announced a partnership with WalletConnect, a protocol that connects crypto wallets with applications, enabling stablecoin payments at scale.

Through a new payment solution called WalletConnect Pay, merchants can accept USDC and EURC, among other stablecoins, using existing Ingenico payment terminals.

WalletConnect’s CEO, Jess Houlgrave, told Euronews that “MiCA is not perfect, nor is it the end-state of crypto regulation in the EU, but some regulatory clarity is better than none”.

Additionally, the CEO underlined that uniform enforcement is important to stop “regulatory shopping” between different jurisdictions, where crypto firms simply choose the version of the rules that suits them best.

Euronews also spoke with the general counsel of Crossmint, Miguel Zapatero. The company provides stablecoin infrastructure for businesses.

With a key base in Spain, Crossmint secured a MiCA licence with the Spanish regulator (CNMV) this week. When asked about the procedure, the general Zapatero said that “the barriers to entry are difficult and costly for small businesses, as the requirements are the same for a major bank or a crypto startup”.

Zapatero added that “once you acquire a CASP licence, businesses trust you more, and other regulators around the world tend to expedite their own procedures with you, as the MiCA is one of the most strict crypto regulations globally”.

These statements echo the EU’s touted doctrine of “regulating by example”, although the risk of overcomplexity looms — threatening to stifle innovation.

WASHINGTON — President Trump’s administration on Wednesday sought to assert its control over Venezuelan oil, seizing a pair of sanctioned tankers transporting petroleum and announcing plans to relax some sanctions so the U.S. can oversee the sale of Venezuela’s petroleum worldwide.

Trump’s administration intends to control the distribution of Venezuela’s oil products globally following its ouster of President Nicolás Maduro in a surprise nighttime raid. Besides the United States enforcing an existing oil embargo, the Energy Department says the “only oil transported in and out of Venezuela” will be through approved channels consistent with U.S. law and national security interests.

That level of control over the world’s largest proven reserves of crude oil could give the Trump administration a broader hold on oil supplies globally in ways that could enable it to influence prices. Both moves reflect the Republican administration’s determination to make good on its effort to control the next steps in Venezuela through its vast oil resources after Trump has pledged the U.S. will “run” the country.

Secretary of State Marco Rubio suggested that the oil taken from the sanctioned vessels seized in the North Atlantic and the Caribbean Sea would be sold as part of the deal announced by Trump on Tuesday under which Venezuela would provide up to 50 million barrels of oil to the U.S.

“One of those ships that was seized that had oil in the Caribbean, you know what the interim authorities are asking for in Venezuela?” Rubio told reporters after briefing lawmakers Wednesday about the Maduro operation. “They want that oil that was seized to be part of this deal. They understand that the only way they can move oil and generate revenue and not have economic collapse is if they cooperate and work with the United States.”

Seizing 2 more vessels

U.S. European Command said on social media that the merchant vessel Bella 1 was seized in the North Atlantic for “violations of U.S. sanctions.” The U.S. had been pursuing the tanker since last month after it tried to evade a blockade on sanctioned oil vessels around Venezuela.

Homeland Security Secretary Kristi Noem revealed U.S. forces also took control of the M Sophia in the Caribbean Sea. Noem said on social media that both ships were “either last docked in Venezuela or en route to it.”

The two ships join at least two others that were taken by U.S. forces last month — the Skipper and the Centuries.

The Bella 1 had been cruising across the Atlantic nearing the Caribbean on Dec. 15 when it abruptly turned and headed north, toward Europe. The change in direction came days after the first U.S. tanker seizure of a ship on Dec. 10 after it had left Venezuela carrying oil.

When the U.S. Coast Guard tried to board the Bella 1, it fled. U.S. European Command said a Coast Guard vessel had tracked the ship “pursuant to a warrant issued by a U.S. federal court.”

As the U.S. pursued it, the Bella 1 was renamed Marinera and flagged to Russia, shipping databases show. A U.S. official, who spoke on the condition of anonymity to discuss sensitive military operations, said the ship’s crew had painted a Russian flag on the side of the hull.

The Russian Foreign Ministry said it had information about Russian nationals among the Marinera’s crew and, in a statement carried by Russia’s state news agencies Tass and RIA Novosti, demanded that “the American side ensure humane and dignified treatment of them, strictly respect their rights and interests, and not hinder their speedy return to their homeland.”

Separately, a senior Russian lawmaker, Andrei Klishas, decried the U.S. action as “blatant piracy.”

The Justice Department is investigating crew members of the Bella 1 vessel for failing to obey Coast Guard orders and “criminal charges will be pursued against all culpable actors,” Atty. Gen. Pam Bondi said.

“The Department of Justice is monitoring several other vessels for similar enforcement action — anyone on any vessel who fails to obey instructions of the Coast Guard or other federal officials will be investigated and prosecuted to the fullest extent of the law,” Bondi said on X.

The ship had been sanctioned by the U.S. in 2024 on allegations of smuggling cargo for a company linked to Lebanese militant group Hezbollah, which is backed by Iran.

Easing sanctions so U.S. can sell oil

The Trump administration, meanwhile, is “selectively” removing sanctions to enable the shipping and sale of Venezuelan oil to markets worldwide, according to an outline of the policies published Wednesday by the Energy Department.

The sales are slated to begin immediately with 30 million to 50 million barrels of oil. The U.S. government said the sales “will continue indefinitely,” with the proceeds settling in U.S.-controlled accounts at “globally recognized banks.” The money would be disbursed to the U.S. and Venezuelan populations at the “discretion” of Trump’s government.

Venezuelan state-owned oil company PDVSA said it is in negotiations with the U.S. government for the sale of crude oil.

“This process is developed under schemes similar to those in force with international companies, such as Chevron, and is based on a strictly commercial transaction, with criteria of legality, transparency and benefit for both parties,” the company said in the statement.

The U.S. plans to authorize the importation of oil field equipment, parts and services to increase Venezuela’s oil production, which has been roughly 1 million barrels a day.

The Trump administration has indicated it also will invest in Venezuela’s electricity grid to increase production and the quality of life for people in Venezuela, whose economy has been unraveling amid changes to foreign aid and cuts to state subsidies, making necessities, including food, unaffordable to millions.

Ships said to be part of a shadow fleet

Noem said both seized ships were part of a shadow fleet of rusting oil tankers that smuggle oil for countries facing sanctions, such as Venezuela, Russia and Iran.

After the seizure of the now-named Marinera, which open-source maritime tracking sites showed was between Scotland and Iceland earlier Wednesday, the U.K. defense ministry said Britain’s military provided support, including surveillance aircraft.

“This ship, with a nefarious history, is part of a Russian-Iranian axis of sanctions evasion which is fueling terrorism, conflict, and misery from the Middle East to Ukraine,” U.K. Defense Secretary John Healey said.

The capture of the M Sophia, on the U.S. sanctions list for moving illicit cargos of oil from Russia, in the Caribbean was much less prolonged.

The ship had been “running dark,” not having transmitted location data since July. Tankers involved in smuggling often turn off their transponders or broadcast inaccurate data to hide their locations.

Samir Madani, co-founder of TankerTrackers.com, said his organization used satellite imagery and surface-level photos to document that at least 16 tankers had left the Venezuelan coast since Saturday, after the U.S. captured Maduro.

The M Sophia was among them, Madani said, citing a recent photo showing it in the waters near Jose Terminal, Venezuela’s main oil export hub.

Windward, a maritime intelligence firm that tracks such vessels, said in a briefing to reporters the M Sophia loaded at the terminal on Dec. 26 and was carrying about 1.8 million barrels of crude oil — a cargo that would be worth about $108 million at current price of about $60 a barrel.

The press office for Venezuela’s government did not immediately respond to an Associated Press request for comment on the seizures.

Toropin, Boak, Lawless and Biesecker write for the Associated Press. Lawless reported from London.

U.S. President Donald Trump’s sweeping April 2025 tariff measures sent shockwaves through financial markets while upending decades of carefully built trade relationships worldwide, marking the most significant U.S. trade policy shift in at least a century. Economic experts immediately warned that raising the average effective U.S. tariff rates from just under 1.0% to between about 22.5% and 24%, the highest since 1910, could be catastrophic for an economy that was among the few to show significant growth coming out of the pandemic.

Since “the tariff increases were significantly larger than expected,” U.S. Federal Reserve Chair Jerome Powell said in a speech two days after their announcement, “the same is likely to be true of the economic effects, which will include higher inflation and slower growth.” George Pearkes, a macro analyst at Bespoke Investment Group, and Justin Wolfers, professor of public policy and economics at the University of Michigan, both told Investopedia the size of the tariffs significantly increased the likelihood of a recession, with JPMorgan forecasters raising their risk of a global recession to 60%.

Tariffs and the Potential for a Recession

The rationale economists give is based on several mutually reinforcing outcomes they view as likely:

1. Direct consumer impact: “These tariffs are going to hurt. A lot,” Wolfers wrote in a piece for the New York Times, adding that “they are going to reshape your life in much more fundamental ways”—more akin to a “crash” than a “jolt”—compared with those from the first Trump administration. The tariffs are expected to raise consumer prices by 2.3% in 2025, an average loss of about $3,800 per U.S. household, with the proportional effects growing worse for those lower on the income scale. Higher costs will come, too, from knock-on effects beyond the price tags for foreign goods. For example, “higher prices for auto parts will raise insurance costs,” Wolfers pointed out to Investopedia.
2. Business investment and supply chain disruptions: Half of U.S. imports are production inputs, meaning tariffs directly increase manufacturing costs for American companies that need them to make finished products. On the heels of the April tariff changes, many analysts projected it would decrease real gross domestic product (GDP) growth by about 0.9% in 2025, with exports projected to fall 18.1%.
3. Global retaliation: Trading partners are sure to counter with their own tariffs, causing blowback for the world’s economy: the World Trade Organization warns of a potential 1% contraction in global trade volumes.
4. Problems facing any U.S. Federal Reserve response: Specific sectors are expected to see major price increases (see the table on this page), potentially creating a combination of rising inflation and economic contraction called stagflation—something that the U.S. Federal Reserve would find difficult to address since its primary tool, interest rates, can’t address both prices and growth at the same time.

If the tariffs do lead to an economic contraction, how you prepare depends on your circumstances:

Long-term investors: “Your focus right now should be structured by your time frame. For anyone in the long term—10-plus years, like retirement accounts—today’s headlines don’t matter,” Pearkes said. “Don’t try and time the market, you won’t be successful.”

Short-term investors: “For shorter-term investors, it’s hard to see a positive catalyst in the near term,” Pearkes said. “The better entries to step in and buy are likely going to come later.” In other words, those with shorter time horizons might consider maintaining higher cash positions until the markets stabilize.

Consumers: With projected price increases of 2.3% across the board and significantly higher in categories like food (2.8%) and apparel (17%), households should consider doing the following:

• Review your budget to account for higher prices on imported goods.
• Consider accelerating major purchases in categories facing steep tariffs before they arrive, then switching to delaying, if you can, those purchases once they are in force.
• Build emergency savings.

The Bottom Line

“Few propositions command as much consensus among professional economists as that [free] world trade increases economic growth and raises living standards,” noted Harvard economist Greg Mankiw has written. Economists now worry the April 2025 U.S. tariffs could trigger a recession. With global markets in turmoil and businesses beginning to implement layoffs, the question is how severe and widespread the pain will be. “No one wins a trade war,” Wolfers said.