In recent years, the rapid development of stablecoins has attracted the attention of regulatory agencies in various countries. As a type of cryptocurrency linked to fiat currencies or other assets, stablecoins have stable value characteristics and are widely used in cross-border payments, DeFi, and other fields. Particularly in this cycle, RWA has performed impressively, attracting participation from both traditional financial investment institutions (such as BlackRock) and web 3-based organizations (such as Sky, formerly Maker DAO), with more and more investors focusing on this sector, gradually forming a trend of oscillating upward.
Image source:
https://defillama.com/stablecoins
"Without rules, nothing can be established," which has led governments and international organizations to begin implementing 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 main markets for stablecoin development, and its regulatory policies are relatively complex. The regulatory framework for stablecoins in the U.S. is mainly implemented by several agencies, including the Department of 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 properties, requiring compliance with relevant provisions of the Securities Act. 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 for stablecoin issuers, but compliance with anti-money laundering and compliance requirements is necessary. Recently, the U.S. Congress is discussing legislative proposals such as the Stablecoin Transparency Act, attempting to establish a unified regulatory framework for stablecoins. Following the election of Donald Trump, known as the 'Crypto President,' although policies have not yet been implemented, crypto regulation seems to be moving in a positive direction overall.
European Union (Europe)
The EU's regulation of stablecoins primarily relies on the Markets in Crypto-Assets Regulation (MiCA).
MiCA categorizes stablecoins into Asset-Referenced Tokens (ART) and Electronic Money Tokens (EMT). Electronic Money Tokens (EMTs) refer to tokens linked to a single fiat currency, such as stablecoins pegged to the euro or dollar. Asset-Referenced Tokens (ARTs) refer to tokens linked to certain assets (such as fiat currencies, commodities, or crypto assets). MiCA establishes corresponding regulatory requirements. Entities issuing stablecoins must obtain permission from EU member states and meet capital reserve, transparency disclosure, and other requirements.
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 framework. According to this framework, companies wishing to issue or promote fiat-backed stablecoins to the public in Hong Kong must first obtain a license from the Monetary Authority. The regulatory requirements include 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 the proposed regulatory requirements. The list of first participants was announced on July 18, 2024, including JD Coin Chain Technology (Hong Kong) Limited, Round Coin Innovation Technology Limited, and a consortium formed by Standard Chartered Bank (Hong Kong) Limited, Animoca Brands Limited, and Hong Kong Telecom 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 Regulation Draft in the Gazette, aiming to introduce a regulatory framework for fiat-backed stablecoin issuers in Hong Kong to enhance the regulatory environment 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 permission from 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. Under 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, namely: 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 plans are in place 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 has been reported that in December, the Deputy Director of BCB's financial system indicated that if key issues like transaction transparency could be improved, the central bank might lift the ban.
Summary
Additionally, the BRICS countries, including Russia, are considering using cryptocurrencies as a settlement method for cross-border financing. Overall, whether by establishing regulatory sandboxes for crypto companies or by categorizing stablecoins based on their different characteristics, more regulatory policies for stablecoins will emerge in the future. Cross-border payments also seem to be one of the most widely applied scenarios for stablecoins.