New Era of Stablecoin Regulation: US and Hong Kong Bills Leading Global Digital Asset Market Reform

With the United States and Hong Kong successively introducing regulations related to stablecoins, the global digital asset market has officially entered a new growth cycle driven by regulation. These regulations not only fill the regulatory gap for stablecoins pegged to fiat assets but also provide a clear compliance framework for the market, including reserve asset segregation, redemption guarantees, and anti-money laundering compliance requirements, effectively reducing systemic risks such as bank runs or fraud.

This article will deeply analyze the core framework of these two important bills, combining quantitative forecasts to systematically project the growth trajectory of compliant US dollar stablecoins over the next decade and their reconstructive effects on the public chain ecosystem.

1. The US GENIUS Act: Growth Drivers and Quantitative Analysis of the US Dollar Stablecoin

The U.S. "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) 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 hold 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, undergo regular audits, and comply 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, providing a clear legal positioning 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 crypto market landscape. Firstly, investing in high-liquidity US dollar assets that do not allow interest will directly benefit the issuance of US Treasuries, making stablecoins an important channel for the distribution of US Treasuries. This mechanism not only alleviates the financing pressure of the US fiscal deficit but also strengthens the international settlement position of the dollar through digital currency channels. Secondly, a clear regulatory framework may attract more financial institutions and technology companies into the stablecoin field, promoting innovation and efficiency in payment systems. However, the bill has also sparked some controversies, such as potential conflicts of interest arising from the Trump family's involvement in the cryptocurrency industry, and international regulatory coordination issues that may arise from restrictions on foreign issuers. Nevertheless, the "GENIUS Act" provides institutional guarantees for the development of stablecoins, marking an important step for the United States in the global digital asset regulatory competition.

According to predictions from a financial institution, under a scenario where regulatory pathways are clarified, the global stablecoin market capitalization will grow from $230 billion in 2025 to $1.6 trillion by 2030. It is worth noting that this prediction implies two key assumptions: first, compliant stablecoins will accelerate the replacement of traditional cross-border payment channels, saving about $40 billion in international remittance costs each year; second, the locked amount of stablecoins in DeFi protocols will exceed $500 billion, becoming the foundational liquidity layer of decentralized finance.

2. The Differentiated Positioning of Hong Kong's 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 areas such as reserve asset management, redemption mechanisms, and risk control. In addition, Hong Kong also plans to launch a dual licensing system for over-the-counter (OTC) trading and custodial services within the next two years, further improving the comprehensive 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, as Hong Kong strives to build an innovative ecosystem that integrates traditional finance and blockchain technology, paving the way for broader application spaces in the development of Web 3.0. Under Hong Kong's regulatory framework, the issuance of stablecoins will show a prosperous development trend of multi-currency and multi-scenario, further consolidating Hong Kong's position as a technological financial hub.

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

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

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

Under the regulatory framework established by the GENIUS Act, payment stablecoins must be backed by U.S. Treasury securities 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 securities, creating a unique capital circulation system on a global scale: when global users purchase stablecoins denominated in U.S. dollars, the issuing institution must allocate the corresponding funds as U.S. Treasury assets. This not only facilitates the flow of funds back to the U.S. Treasury but also, in an intangible way, strengthens the global usage of the U.S. dollar. This mechanism can be seen as a globalization extension of the U.S. dollar's financial infrastructure.

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

(2) The 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) simultaneously launched the "stablecoin sandbox" allowing experimental issuance of tokens pegged to existing fiat currencies. Regulatory arbitrage between the two places may lead issuers to engage in "regulatory site selection" behavior, necessitating the establishment of unified reserve auditing 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 licensing system for fiat-backed stablecoins, positioning stablecoins as "substitutes for virtual banks" and strictly adhering to the traditional financial regulatory framework. In contrast, Singapore maintains an experimental regulatory concept, allowing innovative pilot programs that link digital tokens to fiat currencies, reserving flexible space for technological and business model innovations, and generally adopting a tolerant and trial-error regulatory attitude.

These regulatory differences may lead issuing institutions to selectively register to evade strict scrutiny or exploit differences in regulatory standards for arbitrage operations, thereby undermining the effectiveness of the review of fiat currency pegging mechanisms. In the long term, if there is a lack of coordination, this divergence may undermine regulatory fairness and policy consistency, and even trigger regional regulatory competition risks, causing the two regions to fall into self-consuming competition. Furthermore, the lack of uniform regulatory standards may weaken Asia's voice in the global stablecoin system, thus affecting the competitiveness of Hong Kong and Singapore as international financial centers.

Regulatory agencies in both regions need to strengthen policy coordination to seek 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 regulatory draft marks the transition of digital asset regulation from fragmentation to systematization. Compliant USD stablecoins are expected to achieve exponential growth within the next decade, becoming the core bridge connecting traditional finance and the crypto ecosystem. The technological evolution of public chain infrastructure will determine its ability to capture maximized value dividends within the regulatory framework. For issuers, building a multi-chain, multi-coin, and multi-regulatory compatible stablecoin system will be the key strategy to win the competition in the next decade.