Overview of Stablecoin Regulatory Developments in Major Global Regions

In recent years, the rapid development of stablecoins in the cryptocurrency field has attracted significant attention from global regulatory agencies. As a type of digital currency pegged to fiat currencies or other assets, stablecoins are widely used in cross-border payments and decentralized finance due to their stable value characteristics. It is noteworthy that in this market cycle, real-world assets (RWA) have stood out, attracting active participation from traditional financial institutions and Web3 native organizations, and investors' attention to this sector is also continuously increasing.

With the growing influence of stablecoins, governments and international organizations around the world have introduced relevant policies to regulate and supervise the stablecoin market. This article will briefly outline the current regulatory dynamics of stablecoins in major regions globally.

United States

As one of the important markets for the development of stablecoins, the regulatory system in the United States is quite complex, involving multiple regulatory agencies, including the Department of the Treasury, the Securities and Exchange Commission ( SEC ), and the Commodity Futures Trading Commission ( CFTC ).

The SEC may classify certain stablecoins as securities, requiring them to comply with relevant provisions of the Securities Act. The Office of the Comptroller of the Currency ( OCC ), under the Treasury Department, has proposed to allow national banks and federal savings associations to provide services to stablecoin issuers, but must strictly adhere to anti-money laundering and compliance requirements. Currently, the U.S. Congress is discussing proposals such as the Stablecoin Transparency Act, aimed at establishing a unified regulatory framework for stablecoins.

European Union

The EU's stablecoin regulation is mainly based on the Regulation on Markets in Crypto-Assets (MiCA). MiCA categorizes stablecoins into two types: electronic money tokens (EMTs) linked to a single fiat currency and asset-referenced tokens (ARTs) linked to multiple assets. The regulation establishes different regulatory requirements for these two types of stablecoins, covering aspects such as issuance licenses, capital reserves, and information disclosure.

Hong Kong

In July 2023, the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau jointly published the main content of the stablecoin regulatory framework. This framework requires companies issuing or promoting fiat stablecoins in Hong Kong to obtain a license from the Monetary Authority and to meet relevant requirements in areas such as reserve asset management, corporate governance, risk control, and information disclosure.

Hong Kong has also launched a "sandbox" program for stablecoin issuers to facilitate communication between regulators and the industry. In December 2023, the Hong Kong government published the "Stablecoin Bill" in the gazette, aiming to further improve the regulatory framework for virtual assets.

Singapore

Singapore classifies stablecoins as digital payment tokens, and under the Payment Services Act, their issuance and circulation require approval from the Monetary Authority of Singapore ( MAS ). MAS also provides a regulatory sandbox for innovative enterprises to test business models related to stablecoins.

Japan

In June 2022, Japan revised the Payment Services Act (PSA) to establish a legal framework for stablecoin regulation. The revised PSA defines stablecoins fully backed by fiat currency as "electronic payment instruments" (EPI). Only three types of institutions can issue stablecoins: banks, money transfer service providers, and trust companies, and institutions engaged in stablecoin-related businesses must register as electronic payment instrument service providers (EPISP).

Brazil

The Central Bank of Brazil ( BCB ) plans to regulate stablecoins and asset tokenization by 2025. In November 2023, BCB proposed a regulatory proposal suggesting to prohibit users from transferring stablecoins from centralized exchanges to self-custody wallets. However, it has been reported that the central bank may consider lifting this ban if key issues such as transaction transparency can be improved.

Conclusion

Globally, regulatory agencies in various countries are taking different approaches to regulate the stablecoin market. Whether it's establishing regulatory sandboxes or formulating classified regulations based on the characteristics of stablecoins, an increasing number of stablecoin regulatory policies will be introduced in the future. It is noteworthy that cross-border payments seem to be becoming one of the most widely used scenarios for stablecoins, which may also become a key area of regulatory focus in the future.