Overview of New Developments in Stablecoin Regulation in Key Global Regions

In recent years, the rapid development of stablecoins 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. Particularly in the current market cycle, physical assets (RWA) have performed exceptionally well, attracting the interest of traditional financial institutions and Web3 native organizations, with more and more investors turning their attention to this field.

With the rapid development of the stablecoin market, governments and international organizations around the world have introduced relevant policies to regulate and supervise the issuance and use of stablecoins. 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 policies in the United States are quite complex, primarily 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 consider certain stablecoins as securities, requiring them to comply with the relevant provisions of the Securities Act. The Office of the Comptroller of the Currency (OCC), a bureau of the Treasury, has proposed allowing national banks and federal savings associations to provide services to stablecoin issuers, but they must comply with 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 for stablecoins. Although new policies have not yet been introduced, the overall regulatory attitude seems to be becoming more positive.

European Union

The EU's stablecoin regulation is primarily based on the Markets in Crypto-Assets Regulation (MiCA). MiCA categorizes stablecoins into two types: Asset-Referenced Tokens (ART) and Electronic Money Tokens (EMT).

EMT refers to tokens pegged to a single fiat currency, such as stablecoins pegged to the euro or the US dollar. ART refers to tokens pegged to certain assets (such as fiat currencies, commodities, or crypto assets). MiCA has established corresponding regulatory requirements for these two types of stablecoins, including obtaining permission from EU member states, meeting capital reserve requirements, 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 aspects 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 regarding regulatory requirements. The first batch of participants includes JD Coin Chain Technology (Hong Kong) Limited, Yuan Coin Innovation Technology Limited, and a consortium composed of Standard Chartered Bank (Hong Kong) Limited, Animoca Brands Limited, and Hong Kong Telecommunications Limited.

In December 2023, the Hong Kong government published the "Stablecoin Ordinance Draft" in the Gazette, aiming to improve the regulatory framework for virtual asset activities.

Singapore

According to Singapore's Payment Services Act, stablecoins are considered digital payment tokens, and their issuance and circulation require approval 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 amended PSA defines stablecoins fully backed by fiat currency as "electronic payment instruments" (EPI).

According to regulations, only three types of institutions can issue stablecoins: banks, money transfer service providers, and trust companies. Institutions that wish to engage in stablecoin-related business must first register as Electronic Payment Instrument Service Providers (EPISP) to obtain the licenses required to provide services.

Brazil

Roberto Campos Neto, the president of the Central Bank of Brazil (BCB), stated in October 2023 that plans are in place to regulate stablecoins and asset tokenization in 2024. In November 2023, BCB proposed a regulatory measure that suggests prohibiting users from withdrawing stablecoins from centralized exchanges to self-custody wallets. However, it was reported that in December, the deputy director of the BCB financial system indicated that if key issues such as transaction transparency could be improved, the central bank might consider lifting this ban.

Summary

Major countries and regions around the world are actively formulating regulatory policies for stablecoins, ranging from the establishment of regulatory sandboxes to the development of classified regulatory measures based on the different characteristics of stablecoins. In the future, we expect to see more regulatory policies related to stablecoins being introduced. Notably, cross-border payments seem to be becoming one of the most widely used scenarios for stablecoins, and this trend may influence the future direction of regulation.