Overview of Stablecoin Regulatory Developments in Major Regions Worldwide

In recent years, the rapid development of stablecoins has attracted significant attention from global regulatory agencies. As a type of cryptocurrency linked to fiat currencies or other assets, stablecoins are widely used in areas such as cross-border payments and decentralized finance due to their stable value characteristics. Particularly in the current market cycle, real-world assets (RWA) have stood out, drawing substantial attention from traditional financial institutions and Web3 native organizations, creating a trend of steady growth.

With the expansion of the stablecoin market, governments and international organizations around the world have begun to formulate relevant regulatory policies. This article will briefly outline the current regulatory dynamics of stablecoins in major regions globally.

United States

As one of the main markets for stablecoin development, the regulatory framework in the United States is relatively complex, implemented by multiple agencies, including the Department of the Treasury, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

The SEC may regard some stablecoins as securities, requiring them to comply with relevant regulations. The Office of the Comptroller of the Currency (OCC), under the Treasury Department, has proposed allowing national banks and federal savings associations to provide services to stablecoin issuers, but they must meet anti-money laundering and compliance requirements. Currently, the U.S. Congress is discussing legislative proposals such as the Stablecoin Transparency Act, aimed at establishing a unified regulatory framework. Recent political changes seem to be positively inclined towards overall cryptocurrency regulation.

European Union

The EU's stablecoin regulation is mainly based on the Markets in Crypto-Assets Regulation (MiCA). MiCA categorizes stablecoins into two types:

1. Asset Reference Token (ART): A token pegged to multiple assets (such as fiat currencies, commodities, or crypto assets).
2. Electronic Money Token (EMT): Tokens pegged to a single fiat currency, such as stablecoins pegged to the Euro or US Dollar.

MiCA has established corresponding regulatory requirements for these two types of stablecoins. Entities issuing stablecoins must obtain a license from EU member states and meet conditions such as capital reserves and transparency disclosures.

Hong Kong

The Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau released the main content of the stablecoin regulatory framework in July 2023. According to this framework, companies issuing or promoting fiat stablecoins to the public in Hong Kong are required to obtain a license from the Monetary Authority. The regulatory requirements cover areas such as reserve asset management, corporate governance, risk control, information disclosure, and anti-money laundering.

The Monetary Authority has also launched a "sandbox" program for stablecoin issuers to facilitate communication with the industry. The first batch of participants includes JD Coin Chain Technology (Hong Kong) Limited, Yuan Coin Innovation Technology Limited, and a consortium formed by Standard Chartered Bank (Hong Kong) Limited, Animoca Brands Limited, and Hong Kong Telecommunications Limited.

In December 2023, the Hong Kong government released the "Stablecoin Regulation Draft" aimed at improving the regulatory framework for virtual asset activities.

Singapore

Singapore classifies stablecoins as digital payment tokens, and their issuance and circulation require permission from the Monetary Authority of Singapore (MAS). MAS provides a regulatory sandbox for startups to test business models related to stablecoins.

Japan

In June 2022, Japan revised the Payment Services Act (PSA) to establish a regulatory framework for the issuance and trading of stablecoins. The revised PSA defines stablecoins that are fully backed by fiat currency as "electronic payment instruments" (EPI).

According to the new regulations, only banks, money transfer service providers, and trust companies can issue stablecoins. Institutions wishing to engage in stablecoin-related activities must register as Electronic Payment Instrument Service Providers (EPISP).

Brazil

Roberto Campos Neto, the president of the Central Bank of Brazil, stated in October 2023 that regulations on stablecoins and asset tokenization are planned for 2024. In November 2023, the central bank proposed a regulatory proposal that suggested prohibiting users from withdrawing stablecoins from centralized exchanges to self-custody wallets. However, in December, the deputy director of the central bank's financial system indicated that the central bank might lift this ban if key issues such as transaction transparency could be improved.

Conclusion

Regions around the world are actively formulating regulatory policies for stablecoins, with different approaches being taken. Some regions choose to set up regulatory sandboxes for crypto companies, while others develop rules based on the different characteristics of stablecoins. In the future, we expect to see more regulatory policies for stablecoins being introduced. At the same time, cross-border payments could become one of the most widely applied scenarios for stablecoins.