Original title: (WOO X Research: Overview of New Dynamics in Stablecoin Regulation)

Original source: WOO

In recent years, the rapid development of stablecoins has attracted the attention of regulatory agencies worldwide. Stablecoins, as a type of cryptocurrency pegged to fiat currencies or other assets, have stable value characteristics and have been widely used in cross-border payments, DeFi, and other fields. Especially during this cycle, the performance of RWA has been impressive, attracting both traditional financial investment institutions (like BlackRock) and Web 3 entities/organizations (like Sky, formerly Maker DAO) to enter the market, with an increasing number of investors focusing on this sector. A trend of oscillating upward has gradually formed.

(Image source: https://defillama.com/stablecoins)

'Without rules, nothing can be accomplished.' Consequently, governments and international organizations worldwide have begun to introduce policies to regulate stablecoins. This article provides a brief summary of the current regulatory dynamics.

United States (North America)

The United States is one of the major markets for the development of stablecoins, and the regulatory policies are quite complex. The regulatory framework for stablecoins in the U.S. is mainly implemented by multiple agencies, including the Department of the Treasury, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

For some stablecoins, the SEC may consider them to have securities attributes and require compliance with related provisions of the (Securities Act). The Office of the Comptroller of the Currency (OCC), under the Department of the Treasury, previously 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. Recently, the U.S. Congress is discussing legislative proposals such as the (Stablecoin Transparency Act) in an attempt to establish a unified regulatory framework for stablecoins. After the election of Donald Trump, who is known as the 'crypto president,' although policies have not yet been introduced, crypto regulation seems to be generally moving in a positive direction.

European Union (Europe)

The EU's regulation of stablecoins primarily relies on the (Regulation on Markets in Crypto-Assets) (MiCA).

MiCA classifies stablecoins into asset-referenced tokens (ART) and electronic money tokens (EMT). Electronic money tokens (EMTs) refer to tokens pegged to a single fiat currency, such as stablecoins pegged to the euro or the U.S. dollar. Asset-referenced tokens (ARTs) refer to tokens pegged to certain assets (such as fiat currencies, commodities, or crypto assets). MiCA sets corresponding regulatory requirements for each. Entities issuing stablecoins must obtain permission from EU member states and meet requirements such as capital reserves and transparency disclosures.

Hong Kong (Asia)

On July 17, 2024, the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau jointly released a consultation summary introducing the main content of the upcoming stablecoin regulatory system. According to this system, companies wishing to issue or promote fiat stablecoins to the public in Hong Kong must first obtain a license from the Monetary Authority. This regulatory requirement includes the management of reserve assets, corporate governance, risk control, information disclosure, and measures against money laundering and terrorist financing.

(Image source link: https://www.hkma.gov.hk/gb_chi/news-and-media/press-releases/2024/07/20240717-3/?utm_source=chatgpt.com)

In addition, the Monetary Authority has launched a 'sandbox' program for stablecoin issuers to exchange views with the industry on proposed regulatory requirements. The first batch of participants was announced on July 18, 2024, including JD Coin Chain Technology (Hong Kong) Ltd., Round Coin Innovation Technology Ltd., and a consortium formed by Standard Chartered Bank (Hong Kong) Ltd., Animoca Brands Limited, and Hong Kong Telecommunications Limited.

(Image source link: https://www.hkma.gov.hk/gb_chi/key-functions/international-financial-centre/stablecoin-issuers/?utm_source=chatgpt.com)

Recently, on December 6, 2024, the government published the (Stablecoin Ordinance Draft) in the Gazette, aimed at introducing a regulatory system for fiat stablecoin issuers in Hong Kong to improve the regulatory framework for virtual asset activities.

Singapore (Asia)

According to Singapore's (Payment Services Act), stablecoins are regarded as a type of digital payment token, and their issuance and circulation require the approval of the Monetary Authority of Singapore (MAS). MAS provides regulatory sandboxes for startups to test business models related to stablecoins.

Japan (Asia)

In June 2022, Japan amended the (Payment Services Act) (PSA) to establish a regulatory framework for the issuance and trading of stablecoins. According to the amended PSA, stablecoins fully backed by fiat currency are defined as 'Electronic Payment Instruments' (EPI), which can be used to pay for goods and services. There are specific requirements for issuing entities: only three types of entities can issue stablecoins: banks, money transfer service providers, and trust companies. Entities wishing to engage in stablecoin-related business must first register as Electronic Payment Instrument Service Providers (EPISP) to obtain the necessary licenses to provide services.

Brazil (South America)

BCB President Roberto Campos Neto stated in October 2024 that there are plans to regulate stablecoins and asset tokenization in 2025. In November 2024, BCB proposed a regulatory proposal suggesting a ban on users withdrawing stablecoins from centralized exchanges to self-custody wallets. It is reported that in December, the Deputy Head of BCB's Financial System stated that if key issues such as transaction transparency could be improved, the central bank might lift the ban.

Summary

Additionally, Russia's BRICS countries are also considering the use of cryptocurrencies as a settlement method for cross-border financing. Overall, whether it's establishing regulatory sandboxes for crypto companies or defining categories based on the different characteristics of stablecoins, more and more regulatory policies for stablecoins will be introduced in the future. Cross-border payments also seem to become one of the most widely used scenarios for stablecoins.

This article is from a submission and does not represent BlockBeats' views.