The global digital asset market enters a new growth cycle driven by regulation

The global digital asset market has officially entered a new rise phase driven by regulation. The stablecoin-related legislation introduced successively by the United States and Hong Kong not only fills the regulatory gap for stablecoins pegged to fiat assets but also provides a clear compliance framework for the market. These regulations cover requirements such as reserve asset segregation, redemption guarantees, and anti-money laundering compliance, effectively reducing systemic risks such as run or fraud.

This article will deeply analyze the core framework of the two major bills, combining quantitative forecasts to systematically project the ten-year rise trajectory of compliant stablecoins and their restructuring effects on the public chain ecosystem.

1. The Rise of US Dollar Stablecoins under the GENIUS Act in the United States and Quantitative Deduction

The U.S. "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) was passed in the Senate in May 2025, marking a significant advancement in the regulation of stablecoins in the United States. The act establishes a detailed regulatory framework for stablecoin issuers, requiring them to maintain reserves backed by highly liquid assets such as cash in U.S. dollars, short-term U.S. Treasury securities, or government money market funds at a minimum ratio of 1:1, and to undergo regular audits in compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. Additionally, the act prohibits stablecoins from offering interest yields, restricts foreign issuers from entering the U.S. market, and clarifies that stablecoins are neither securities nor commodities, thus providing a clear legal position for digital assets. This legislation aims to enhance consumer protection, mitigate financial risks, and provide a stable regulatory environment for fintech innovation.

The implementation of the GENIUS Act is expected to have a profound impact on the global cryptocurrency market landscape. First, investing in high liquidity dollar assets that do not allow for interest will directly benefit the issuance of U.S. Treasury bonds, making stablecoins an important channel for distributing U.S. Treasury bonds. This mechanism not only alleviates the financing pressure of the U.S. fiscal deficit but also strengthens the international settlement position of the dollar through digital currency channels. Second, a clear regulatory framework may attract more financial institutions and technology companies into the stablecoin space, promoting innovation and efficiency in payment systems. However, the act has also sparked some controversies, such as the potential conflicts of interest arising from the Trump family's involvement in the cryptocurrency industry, as well as the international regulatory coordination issues that may arise from restrictions on foreign issuers. Nonetheless, the GENIUS Act provides institutional guarantees for the development of stablecoins and marks an important step for the U.S. in the global digital asset regulatory competition.

According to predictions, under the scenario of clearer regulatory pathways, the global stablecoin market value is expected to rise from $230 billion in 2025 to $1.6 trillion in 2030. Notably, this prediction implies two key assumptions: first, compliant stablecoins will accelerate the replacement of traditional cross-border payment channels, saving approximately $40 billion in international remittance costs each year; second, the amount of stablecoins locked in DeFi protocols will surpass $500 billion, becoming the foundational liquidity layer of decentralized finance.

2. The Differentiated Positioning of the Hong Kong Stablecoin Regulatory Framework

The recent release of the "Stablecoin Regulation" by the Hong Kong Special Administrative Region government marks an important progress in its systematic layout in the Web3.0 field. The regulation establishes a licensing system for the issuance of stablecoins, requiring issuers to obtain permission from the Hong Kong Monetary Authority (HKMA) and meet strict requirements in terms of reserve asset management, redemption mechanisms, and risk control. Additionally, Hong Kong plans to launch a dual licensing system for over-the-counter (OTC) and custody services within the next two years, further improving the full-chain regulatory system for virtual assets. These measures aim to enhance investor protection, increase market transparency, and consolidate Hong Kong's position as a global digital asset center.

The Hong Kong Monetary Authority plans to release operational guidelines on the tokenization of real-world assets (RWA) in 2025, promoting the on-chain tokenization process of traditional assets such as bonds, real estate, and commodities. By utilizing smart contract technology, functions such as automatic dividends and interest distribution will be realized. Hong Kong is committed to building an innovative ecosystem that integrates traditional finance and blockchain technology, opening up broader application space for the development of Web 3.0. Under Hong Kong's regulatory framework, the issuance of stablecoins is expected to show a prosperous development trend in multiple currencies and scenarios, further consolidating Hong Kong's position as a technology and financial hub.

The Hong Kong "Stablecoin Regulation Draft" draws on the regulatory logic of the United States, but presents significant differences in implementation details.

3. The Evolution of the Global Stablecoin Landscape Under Regulatory Competition

(1) The global reserve currency strengthening effect of the US dollar stablecoin

Under the regulatory framework established by the GENIUS Act, payment-based stablecoins must be backed by U.S. Treasury bonds as reserve assets. This regulation gives U.S. dollar stablecoins strategic significance that transcends the realm of digital currencies. Essentially, these stablecoins have become a new distribution channel for U.S. Treasury bonds, creating a unique capital circulation system on a global scale: when global users purchase stablecoins pegged to the U.S. dollar, the issuing institutions are required to allocate the corresponding funds into Treasury bond assets. This not only facilitates the return of funds to the U.S. Treasury but also invisibly strengthens the global use of the U.S. dollar. This mechanism can be seen as a global extension of the financial infrastructure of the dollar.

From the perspective of international settlement, the emergence of stablecoins marks a paradigm shift in the US dollar clearing system. Under the traditional model, the cross-border flow of the US dollar heavily relies on interbank settlement networks, while blockchain-based stablecoins are directly embedded in various compatible distributed payment systems in the form of "on-chain dollars." This technological breakthrough allows US dollar settlement capabilities to no longer be limited to traditional financial institutions. This not only expands the international use cases of the US dollar but also represents a modernization upgrade of US dollar settlement sovereignty in the digital age, further solidifying its core position in the global monetary system.

(2) Challenges of Regulatory Coordination in Asia between Hong Kong and Singapore

Although Hong Kong was the first to establish a stablecoin licensing system, the Monetary Authority of Singapore (MAS) concurrently launched a "stablecoin sandbox" that allows for the experimental issuance of tokens pegged to existing fiat currencies. Regulatory arbitrage between the two regions may trigger issuers' "regulatory site selection" behavior, necessitating the establishment of unified reserve audit standards and anti-money laundering information sharing mechanisms through the ASEAN Financial Regulatory Forum.

Although Hong Kong and Singapore have similar goals in stablecoin regulatory policies, their implementation paths show significant differences. Hong Kong adopts a prudent tightening regulatory approach, with the Monetary Authority planning to establish a legal stablecoin licensing system, positioning stablecoins as "virtual bank alternatives" and strictly adhering to traditional financial regulatory frameworks. In contrast, Singapore maintains an experimental regulatory concept, allowing innovative pilot projects that link digital tokens to fiat currency, reserving space for technological and business model innovation, and overall adopting a fault-tolerant and trial-and-error regulatory attitude.

These regulatory differences may lead issuers to selectively register to evade strict scrutiny, or to engage in arbitrage operations by taking advantage of regulatory standard discrepancies, thereby weakening the review effectiveness of the fiat currency peg mechanism. In the long term, if there is a lack of coordination, this fragmentation may undermine regulatory fairness and policy consistency, and even trigger regional regulatory competition risks, causing both regions to fall into a self-consuming competition. Furthermore, the lack of uniformity in regulatory standards may weaken Asia's voice in the global stablecoin system, which in turn could affect the competitiveness of Hong Kong and Singapore as international financial centers.

Regulatory agencies in both regions need to strengthen policy coordination, seeking a better balance between preventing systemic risks and encouraging financial innovation, in order to enhance Asia's overall influence in global digital financial governance.

Conclusion: Regulatory Clarity Opens a Golden Decade for Stablecoins

The joint implementation of the US GENIUS Act and the Hong Kong Ordinance Draft marks the transition of digital asset regulation from fragmentation to systematization. Compliant USD stablecoins will see a magnitude rise in quantity within the next decade, becoming the core bridge connecting traditional finance and the crypto ecosystem. The technological evolution of public chain infrastructure will determine whether it can capture the maximized value dividend within the regulatory framework. For issuers, building a multi-chain, multi-currency, and multi-regulatory compliant stablecoin system will be the key strategy to winning the competition in the next decade.