Regulation of stablecoins in other countries

Globally, the regulatory framework for stablecoins varies by country, with different regulatory measures established based on each nation’s financial system, economic environment, and policy objectives. The following is a detailed analysis of the current regulatory status of stablecoins in major countries and regions, exploring the similarities and differences with regulations from other countries in the context of the GENIUS Act, as well as the potential impact on the global crypto market. The analysis is based on the latest information available up to July 2025. 1. European Union (EU) regulatory framework: The EU’s Markets in Crypto-Assets Regulation (MiCA) is the world’s first comprehensive regulation for crypto assets, which was passed in June 2023 and will be fully implemented by December 2024. Core requirements: Stablecoins are divided into Asset-Referenced Tokens (ART) and E-Money Tokens (EMT), and must meet strict requirements for reserves, transparency, and liquidity. Issuers must obtain a license from a European Union bank or Electronic Money Institution (EMI) and hold reserve assets within the EU. Large issuers (such as those with a market value exceeding 1 billion euros) are required to comply with stricter trading limits and capital requirements. Require regular disclosure of reserve composition and acceptance of audits to prevent events similar to the Terra/Luna crash. Case: Circle (the USDC issuer) applied for a French EMI license in March 2023 and obtained approval in May 2024, becoming a model of MiCA compliance. Market Impact: Positive: MiCA provides a clear legal framework for stablecoins, enhances investor confidence, and promotes the growth of cross-border payments and DeFi applications. Challenge: Strict regulatory requirements have increased compliance costs, potentially leading to small issuers exiting the market and an increase in market concentration. Comparison with the GEN Act: MiCA places more emphasis on unified regulation, while the GEN Act allows for state-level flexibility and lowers the entry barriers. The MiCA has stricter custody requirements for reserve assets (must be within the EU), while the GENIUS Act allows for a broader range of high-quality assets (such as U.S. Treasury bonds). MiCA has been fully implemented, while the GENIUS bill is still in the legislative stage, making slow progress. 2. Hong Kong Regulatory Framework: The “Stablecoin Regulation Bill” effective in August 2025 establishes Hong Kong’s position as a crypto-friendly hub in Asia. Core requirements: Stablecoin issuers must apply for a license from the Hong Kong Monetary Authority (HKMA), with only 3-4 institutions expected to be approved initially, while the number of applicants has reached 50-60. Stablecoins are primarily pegged to the Hong Kong Dollar or the US Dollar, encouraging their use in local and cross-border payments. Regulatory authorities adopt a “sandbox” model, allowing companies to test innovations in a controlled environment, while also needing to meet anti-money laundering (AML) and counter-terrorism financing (CFT) requirements. Hong Kong is also exploring the use of stablecoins to promote the digitalization and internationalization of the Renminbi, reducing dependence on the US dollar. Market Impact: Positive: Hong Kong’s open policy has attracted global issuers (such as Tether planning to relocate its headquarters to Hong Kong), propelling it to become a crypto center in Asia. Challenges: Strict initial licensing approvals may limit market competition; the promotion of the Renminbi stablecoin faces strong competition from the US dollar stablecoin. Comparison with the GENIUS Act: Hong Kong’s “sandbox” model is similar to the state-level flexibility of the GENIUS Act, but Hong Kong places more emphasis on rapid approval and innovation. The GENIUS bill focuses on the global dominance of the US dollar stablecoin, while Hong Kong balances the internationalization of the Hong Kong dollar and the Renminbi. The regulatory framework in Hong Kong has entered the implementation phase, progressing faster than the GEN law. 3. Singapore Regulatory Framework: The Monetary Authority of Singapore (MAS) regards stablecoins as Digital Payment Tokens, regulated under the Payment Services Act. Core requirements: The issuer must hold a payment institution license issued by MAS, ensuring 1:1 reserve support (cash or highly liquid assets). Emphasize compliance with anti-money laundering and counter-terrorism financing, and regularly report transaction data. Support innovative regulatory sandbox mechanisms that allow companies to be exempt from certain regulatory requirements during the testing phase. Market impact: Positive: Singapore’s regulation balances innovation and compliance, attracting issuers like Circle and Paxos to establish regional headquarters. Challenge: High compliance costs may limit the entry of small issuers, with the market primarily dominated by large players. Comparison with the GEN Act: Singapore’s regulation is more centralized around the central agency (MAS), while the GEN Act is decentralized to the state level, offering greater flexibility. Singapore has established a mature regulatory ecosystem, while the GENIUS bill still needs to overcome legislative hurdles. Both emphasize the transparency of reserves, but the GENIUS Act imposes stricter federal oversight on large issuers (such as those supervised by the Federal Reserve and OCC). 4. Japan’s Regulatory Framework: The Financial Services Agency (FSA) of Japan regulates stablecoins through the amended Payment Services Act, considering them as electronic payment instruments. Core requirement: Issuers must hold a bank or trust company license, and reserve assets must be stored at a Japanese bank. Stablecoins must be pegged to the Japanese yen, and USD stablecoins require additional compliance review. Strict anti-money laundering and anti-terrorism financing requirements, transactions must be traceable. Market Impact: Positive: Japan’s regulatory framework provides a legal status for stablecoins, promoting their use in the payment and DeFi sectors. Challenge: Additional scrutiny on USD stablecoins may limit their market penetration, and the domestic development of yen stablecoins is limited. Comparison with the GEN Act: Japan’s regulation tends to protect its currency (yen), while the GEN Act aims to consolidate the global dominance of the dollar. Japan’s regulations have matured and been implemented, while the GENIUS Act still faces political divisions and is unlikely to pass in the short term. Both emphasize 1:1 reserves and transparency, but the GENIUS Act has clearer research requirements for algorithmic stablecoins. 5. UK Regulatory Framework: The UK Financial Conduct Authority (FCA) requires all companies providing digital currency services to register and comply with anti-money laundering and counter-terrorism financing requirements. The UK is developing specific regulations for stablecoins, expected to be implemented by the end of 2025. Core requirements: Stablecoin issuers must obtain FCA authorization, and reserve assets must be transparent and subject to audit. The Bank of England has stated that it will ease restrictions on stablecoin issuers to promote payment efficiency and reduce costs while ensuring financial stability. Focus on supporting stablecoin applications in cross-border payment and retail scenarios. Market impact: Positive: A relaxed regulatory environment may attract issuers to enter the UK market, boosting London’s status as a crypto center. Challenge: Regulations are not yet fully formed, and there is uncertainty in the short term; regulation of non-pound stablecoins may be relatively strict. Comparison with the GEN Act: The UK’s regulation focuses more on innovation in payment scenarios, while the GEN Act emphasizes the global competitiveness of the USD stablecoin. Both allow for a certain degree of regulatory flexibility, but the state-level decentralization of the GENIUS Act is more distinctive. The regulatory framework in the UK is still being developed, similar to the legislative progress of the GENIUS Act. 6. Emerging markets (taking Brazil, Argentina, and Nigeria as examples) Brazil: Regulatory status: The Central Bank of Brazil views stablecoins as financial assets and plans to develop a dedicated regulatory framework to support their application in cross-border payments and remittances. In 2023, Brazil’s crypto market import volume increased by 45%, with a surge in demand for stablecoins. Market impact: Stablecoins are used in Brazil as tools for anti-inflation and cross-border payments, and regulatory advancements may further promote their adoption. Comparison with the GENIUS Act: Brazil’s regulations are still in the early stages, the framework of the GENIUS Act is more mature, but Brazil focuses more on local needs, while the GENIUS Act is centered on the globally dollar-dominated. Argentina: Regulatory Status: Due to high inflation and currency devaluation, the usage rate of stablecoins (especially USD stablecoins) is high in Argentina, but a specific regulatory framework has not yet been established. Market Impact: USD stablecoins provide residents with a means to preserve wealth, and the lack of regulation may lead to risks of illegal transactions. Comparison with the GEN Act: Argentina lacks systematic regulation, and the transparency requirements of the GEN Act may provide a reference for it. Nigeria: Regulatory Status: Nigeria launched its central bank digital currency (eNaira) in 2021, but consumers prefer private USD stablecoins, leading the government to strengthen its regulation of crypto exchanges. Market impact: The demand for stablecoins is strong in cross-border payments and wealth preservation, but regulatory crackdowns may limit their development. Comparison with the GENIUS Act: Nigeria tends to replace stablecoins with CBDC, while the GENIUS Act supports the development of private stablecoins. 7. China’s regulatory framework: China has implemented strict bans on stablecoins and cryptocurrencies, prohibiting their trading and issuance, while focusing on the development of central bank digital currency (digital yuan). Core requirement: Stablecoins are seen as a threat to monetary sovereignty, prohibiting any institution from issuing or trading them. The digital renminbi is positioned as an alternative to blockchain technology, emphasizing government control and financial stability. Market Impact: Restrictions: The stablecoin activities in the Chinese market have moved underground, limiting their application in payments and DeFi. Opportunity: The promotion of the digital renminbi may provide other countries with a case for competition between CBDC and stablecoins. Compared to the GENIUS Act: China completely bans stablecoins, while the GENIUS Act encourages the compliant development of private stablecoins. The transparency and audit requirements of the GENIUS Act stand in stark contrast to China’s strict controls. The regulation of stablecoins in Hong Kong (supporting the internationalization of the Renminbi) forms a differentiated strategy compared to mainland policies. 8. Other countries like Liechtenstein: Since 2020, the “Blockchain Act” (TVTG) has been implemented, providing a comprehensive regulatory framework for stablecoins, which will be further integrated after the implementation of MiCA. It requires reserve transparency, issuer licensing, and consumer protection. Dubai (UAE): The Dubai Financial Services Authority (DFSA) has recently approved the US dollar stablecoin, encouraging its use in payments and investments, with a regulatory framework similar to that of Hong Kong, focusing on innovation. India: A regulatory framework for stablecoins has not yet been established, viewing them as a threat to monetary sovereignty, which could lead to “dollarization.” The unclear regulatory environment has restricted market development. South Korea: Recently suspended its central bank digital currency pilot and shifted to support commercial banks in developing a won stablecoin, showing an open attitude towards private stablecoins. 9. Comparison of Global Trends and the GENIUS Act Common Points: Reserve Transparency: Most global regulatory frameworks (such as MiCA, Singapore, Japan) require stablecoins to be backed by 1:1 reserves and to undergo regular audits, which is consistent with the GENIUS Act. Anti-Money Laundering and Counter-Terrorism Financing: Countries emphasize compliance with AML/CFT, and the GENIUS Act requires issuers to comply with the U.S. Treasury’s FinCEN regulations. Consumer protection: Protecting users’ redemption rights and fund security is a global consensus, and the GENIUS Act reflects this through redemption mechanisms and audit requirements. Differences: Regulatory Flexibility: The state-level decentralization model of the GENIUS Act is relatively unique globally, while the EU and Japan tend to favor centralized regulation, and Hong Kong and Singapore adopt a sandbox model. Monetary Sovereignty: Countries like China and India are concerned that stablecoins lead to “dollarization,” while the GENIUS Act aims to strengthen the dollar’s status as the global reserve currency. Implementation progress: Regulations in regions such as the EU, Hong Kong, and Singapore have been implemented or are about to be implemented, while the GENIUS Act is still hindered by political differences and is unlikely to pass in the short term. Global Impact: 98% of stablecoins are pegged to the US dollar, but 80% of transactions occur overseas, demonstrating the global influence of US dollar stablecoins. If the GENIUS Act is passed, it may further solidify the United States’ leadership position in the stablecoin market. Other countries (such as Hong Kong and the EU) attract issuers through regulation, and the flexibility of the GENIUS Act may make it more competitive, but the legislative process needs to be accelerated to avoid falling behind. 10. Potential Impact on Global Crypto Market Growth: The global stablecoin market has exceeded a market value of $200 billion, and clearer regulation (such as MiCA and the GENIUS Act) will promote its use in payments, remittances, and DeFi. Regulatory competition: Countries attract issuers through loose or innovation-friendly regulations. If the U.S. passes the GENIUS Act, it may regain market dominance. Dollar Dominance: The passage of the GENIUS Act will enhance the global competitiveness of the dollar stablecoin, but caution is needed regarding the challenges from China (digital yuan) and the EU (euro stablecoin). Risk Management: Stricter global regulations will reduce market manipulation and fraud risks (such as Terra/Luna), but may increase compliance costs, affecting small issuers. 11. Conclusion and Outlook The global stablecoin regulation presents a diversified pattern, with the EU’s MiCA, the sandbox models in Hong Kong and Singapore, Japan’s yen-priority policy, and China’s ban each having their own characteristics. The GENIUS Act, as the core proposal for stablecoin regulation in the United States, emphasizes dollar dominance and state-level flexibility, aligning with global trends in transparency and consumer protection, but its legislative progress lags behind other regions. If the GENIUS Act is passed by the end of 2025 or early 2026, it will inject confidence into the US stablecoin market, attract global issuers, and consolidate the dollar’s global position. However, the US needs to accelerate its legislative pace to compete with regions like Hong Kong and the EU. Recommendations: Issuers: Closely monitor the compliance requirements of the GENIUS Act and MiCA, and prioritize regulatory-friendly regions (such as Hong Kong and Singapore) as operational bases. Investors: Pay attention to compliant stablecoin projects (such as USDC, PYUSD) and be wary of the short-term volatility brought by regulatory uncertainty. Policymakers: Learn from the experiences of the EU and Hong Kong, balance innovation and risk, and accelerate the review process of the GENIUS Act.