The Bitcoin (CRYPTO: BTC) price is back in focus today after the United States Congress passed a landmark new bill to regulate stablecoins.
If you're not familiar with the term, stablecoins are cryptocurrencies that are intended to hold a stable value. Though many are pegged to the US dollar, which means they won't be immune to inflationary pressures.
As for the Bitcoin price, the world's original and biggest crypto is currently trading for US$120,509, according to data from CoinMarketCap. That's up 1.9% over the past 24 hours.
And it's closing back in on Monday's all-time high of US$123,092.
Despite the modest retrace since Monday, investors who bought Bitcoin 12 months ago will still be sitting on 86.8% gains today.
Image source: Getty Images
What's happening with the US stablecoin regulation?
After passing through the US Senate, Congress just voted 308 to 122 in favour of the bill, which will provide federal and state government oversight to US dollar-linked digital tokens.
US President Donald Trump's pending approval is all but guaranteed, with Trump being a verbal advocate of the bill.
While that doesn't have a direct impact on the Bitcoin price, the world's top crypto has been catching tailwinds amid the broader adoption of cryptocurrencies by the world's top economy.
Eswar Prasad, a senior fellow at the Brookings Institution, said the bill "provides the stablecoin industry with the degree of legitimacy they have been craving" (quoted by Bloomberg).
"And the bonus is that it comes with what I view as relatively light-touch regulation," Prasad added.
Stablecoins' potential to offer lower-cost, faster forms of payment, particularly internationally, hasn't gone unnoticed by the banking industry.
As Bloomberg reported, JPMorgan's Jamie Dimon, Bank of America's Brian Moynihan, and Citigroup's Jane Fraser all view the broader adoption of stablecoins as a potential threat to their own payment businesses.
The banks are preparing to respond, possibly by getting involved with stablecoins themselves.
What else is spurring the Bitcoin price to new heights?
Atop the US embracing stablecoins, the fast-rising Bitcoin price has been supported by increasing institutional adoption around the world.
"Institutional adoption is growing, and this is the first real bull market where institutional participation is front and centre," eToro market analyst Josh Gilbert said.
Gilbert added:
Publicly traded companies are now adopting Bitcoin as part of their treasury strategy, with some making multi-billion-dollar allocations. At the same time, retirement funds and sovereign wealth funds are starting to gain exposure through ETFs, adding to the wave of demand chasing a fixed supply.
Taking a step back, the Bitcoin price has now rocketed 1,181% over the past five years.
