Source: GUOTAI JUNAN I Macro
Authors: Zhou Hao, Sun Yingchao
With the formal enactment of the Hong Kong Stablecoin Regulation on May 30, the development of stablecoins and related markets in Hong Kong has entered the "fast lane." Hong Kong Secretary for Financial Services and the Treasury Christopher Hui recently stated that the Hong Kong Securities and Futures Commission is considering introducing virtual asset derivatives trading for professional investors and will formulate robust risk management measures. Moreover, due to the latest developments in the virtual asset market, the Financial Services and the Treasury Bureau will issue a second declaration on the development of virtual asset policies, outlining the future policy vision and direction.
Globally, with the rapid development of blockchain technology and encrypted assets, stablecoins serve as a key bridge connecting traditional finance and the crypto ecosystem, with their market size and systemic importance continuing to rise. However, the fast-paced development of stablecoins has also brought a series of risks and regulatory challenges.
Currently, global stablecoin regulation is characterized by both accelerated standardization and regional differentiation. Major financial jurisdictions such as the United States, Hong Kong, the European Union, and Singapore have intensified the rollout or implementation of regulatory regimes for stablecoins in the past two years, marking a new phase in global digital asset regulation. The establishment of these regulatory frameworks not only reshapes the compliance requirements for stablecoin issuance and operation but also directly impacts the landscape of the crypto asset market.
The improvement of the stablecoin regulatory framework is reshaping the global digital asset ecosystem, having a profound impact on market structure, institutional behavior, and financial innovation. First, the rising compliance barriers and market concentration are inevitable trends, where stringent regulatory requirements are raising industry entry barriers, pushing the market structure towards institutionalization and concentration. Second, the space for cross-border payments and currency internationalization has been opened, with the improved regulatory framework clearing obstacles for stablecoins' application in cross-border payment fields; this presents an opportunity for the rapid development of real-world asset tokenization (RWA).
The derivatives market's importance in the virtual asset field is increasingly significant, with its share in overall crypto market trading exceeding 70%, indicating that most crypto asset trades are completed through Futures contracts, perpetual contracts, or other derivatives. Hong Kong's clear stance on introducing virtual asset derivatives will bring greater opportunities to its virtual asset market, facilitating its rapid integration with the modern financial system, while further diversification of the virtual asset product system will noticeably enhance the attractiveness of virtual assets.
With the formal enactment of the Hong Kong Stablecoin Regulation on May 30, the development of stablecoins and related markets in Hong Kong has entered the "fast lane." Hong Kong Secretary for Financial Services and the Treasury Christopher Hui recently stated that the Hong Kong Securities and Futures Commission is considering introducing virtual asset derivatives trading for professional investors and will formulate robust risk management measures. Moreover, due to the latest developments in the virtual asset market, the Financial Services and the Treasury Bureau will issue a second declaration on the development of virtual asset policies, outlining the future policy vision and direction, including exploring how to combine the advantages of traditional financial services with technological innovations in virtual assets and enhancing the safety and flexibility of real economic activities, and will encourage local and international businesses to explore innovations and applications of virtual asset technology.
Globally, with the rapid development of blockchain technology and crypto assets, stablecoins have become a key bridge connecting traditional finance and the crypto ecosystem, and their market size and systemic importance continue to rise. However, the rapid development of stablecoins has also brought a series of risks and regulatory challenges. The collapse of TerraUSD in 2022 exposed issues such as insufficient reserve assets, flaws in redemption mechanisms, and systemic risk transmission, raising significant concerns among global regulatory agencies.
Comparative analysis of regulatory frameworks.
Currently, the global regulation of stablecoins is characterized by accelerating standardization alongside regional differentiation. Major financial jurisdictions like the USA, Hong Kong, the EU, and Singapore have intensively launched or implemented regulatory systems for stablecoins in the past two years, marking a new phase in global digital asset regulation. The establishment of these regulatory frameworks not only reshapes the compliance requirements for the issuance and operation of stablecoins but also has a direct impact on the market landscape of crypto assets.
Through a detailed analysis of the regulatory frameworks in four regions, commonalities and differences in regulatory logic, system design, and implementation effectiveness can be systematically summarized.
Regulatory logic and objectives: Each of the four regions has its own focus in terms of regulatory goals. The USA, through the Genius Act, clearly positions stablecoins as 'payment tools,' emphasizing the maintenance of the dollar's leadership in the digital economy, making USD stablecoins a global digital payment tool. Hong Kong focuses on enhancing its competitiveness as an international financial center, regulating the market to attract institutional participation, and reserving space for future issuance of offshore RMB stablecoins. The EU MiCA framework centers around single market rules to eliminate regulatory differences among member states while emphasizing financial stability and consumer protection. Singapore focuses on ensuring value stability, imposing high standards to guarantee the reliability and security of single currency stablecoins.
Regulatory scope and classification methods: There are significant differences in how regions define and classify stablecoins. Hong Kong adopts the concept of 'designated stablecoins,' focusing regulation on stablecoins pegged to fiat currencies or officially designated value units. The EU uses a binary classification, distinguishing between electronic money tokens (EMT) and asset-referenced tokens (ART), each subject to different rules. Singapore limits its regulatory scope to single currency stablecoins, excluding algorithmic stablecoins or multi-currency basket stablecoins. The USA's Genius Act uniformly defines 'payment stablecoins' but expressly excludes them from the categories of securities and commodities.
Licensing and entry requirements: The four regions exhibit different characteristics in their licensing system design. Hong Kong implements a unified licensing management system, with the Monetary Authority responsible for centralized approval, requiring a minimum paid-up capital of 25 million Hong Kong dollars, significantly higher than in other regions. The USA employs a dual-track system with federal and state regulations, with federal oversight of large issuers (market cap over 10 billion USD) and state-level oversight for smaller issuers. The EU relies on member state authorization, requiring EMT issuers to be electronic money institutions or credit institutions. Singapore does not have a licensing system but effectively creates entry barriers through high standard requirements.
Reserve assets and redemption guarantees: There is a strong consensus among the four regions regarding core risk control measures. Hong Kong, the EU (EMT) and Singapore all require 100% reserve support and asset isolation. The USA requires support by high-quality liquid assets but does not specify a ratio. Regarding redemption rights, Hong Kong requires licensed entities to redeem under 'reasonable conditions'; the EU mandates that EMT must be redeemable at face value for free; Singapore requires redemption within five working days; the USA's Genius Act requires face value redemption but does not specify a timeframe.
Extrajudicial effects and cross-border coordination: The regulatory framework in Hong Kong and the EU has significant extrajudicial effects. Hong Kong's regulation covers offshore issuers anchored to the Hong Kong dollar and the stablecoin activities that are "actively promoted" to the public in Hong Kong. MiCA, as a unified regulation of the EU, applies to the entire single market. The United States promotes cross-border cooperation through a reciprocity agreement mechanism. Singapore mainly regulates domestic activities, with limited extrajudicial applicability.
Detailed analysis of stablecoin regulatory frameworks in various regions.
United States: Dual-track regulation and legislative innovation.
The stablecoin regulatory framework in the United States is undergoing a significant transformation, shifting from the previous multi-regulatory approach to unified legislation. After the Trump administration took office, the process for developing cryptocurrency regulatory policies was noticeably accelerated, aiming to change the earlier situation of overlapping regulatory agencies and unclear regulatory frameworks. In early 2025, the U.S. proposed two key bills at the federal level — the "Stablecoin Transparency and Accountability for Better Ledger Economy Act" (STABLE Act) and the "Guiding and Establishing U.S. Stablecoin National Innovation Act" (GENIUS Act), establishing a new paradigm for U.S. stablecoin regulation.
Regulatory framework design: The United States adopts a dual regulatory model at the federal and state levels. According to the Genius Act, the regulatory responsibility for "federally qualified non-bank issuers" lies with agencies such as the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. State-level regulators are responsible for "state-qualified issuers," but must demonstrate to the Treasury that their regulatory frameworks are "substantially similar" to federal frameworks; otherwise, issuers must shift to federal regulation. Notably, this act establishes a scale threshold — stablecoin issuers with a market cap exceeding $10 billion will be mandatorily included in the federal regulatory framework. This design aligns with the traditional state-level financial regulatory authority in the U.S. while ensuring that large stablecoin systems are subject to unified regulation.
Issuer restrictions: The act clearly states that only licensed payment stablecoin issuers can issue stablecoins pegged to fiat currencies (such as the U.S. dollar); issuance by other entities is considered illegal. The act also clarifies the legal attributes of stablecoins, specifying that payment stablecoins do not fall under securities or commodities, thus avoiding their applicability to other financial regulatory laws. This clarification of legal attributes resolves the long-standing regulatory uncertainties in the U.S. stablecoin market, paving the way for compliant issuance.
Cross-border reciprocity mechanism: The act supports signing reciprocity agreements with countries that have similar regulatory frameworks to promote the international trading and circulation of stablecoins. This mechanism provides institutional support for the global expansion of U.S. dollar stablecoins, aligning with the U.S. strategic goal of maintaining the international dominance of the dollar.
Current regulatory practices: Before the full implementation of the new act, the U.S. continues to follow the existing regulatory framework. Stablecoin issuers are primarily regulated by three aspects: the U.S. Securities and Exchange Commission (SEC) determines whether certain stablecoins qualify as securities based on the "Howey Test"; the Commodity Futures Trading Commission (CFTC) regulates cryptocurrencies as commodities; and the Financial Crimes Enforcement Network (FinCEN) is responsible for overseeing money laundering activities related to cryptocurrencies. In addition, issuers must apply for a "money services business license" or "cryptocurrency license" (such as New York's BitLicense) at the state level, complying with different regulatory requirements across states.
Hong Kong: A Risk-Based Licensing System.
The Hong Kong Special Administrative Region officially passed the Stablecoin Ordinance on May 21, 2025, marking a milestone in Hong Kong's regulatory landscape for digital assets. The ordinance aims to create a robust regulatory environment based on the principle of 'same activities, same risks, same regulation', protecting financial stability while supporting the sustainable development of the Industry.
Definition of Regulatory Targets: The ordinance innovatively introduces the concept of 'specified stablecoins', which are stablecoins that maintain stable value by referencing one or more official currencies, or a calculation unit or form of economic value storage designated by the Monetary Authority. Regulation focuses on two types of activities: issuing specified stablecoins in Hong Kong; or issuing specified stablecoins outside of Hong Kong that claim to be pegged to the value of the Hong Kong dollar. This design ensures that stablecoins pegged to the Hong Kong dollar are regulated while leaving some space for other stablecoins.
Core of the Licensing System: Any institution engaged in 'regulated stablecoin activities' in Hong Kong must apply for a license from the Financial Commissioner. License applicants must be registered companies in Hong Kong or recognized institutions with a registered office in Hong Kong and must meet a series of strict conditions:
Financial Requirements: Maintain a minimum paid-in capital of 25 million Hong Kong dollars and hold sufficient high liquidity reserve Assets (such as government Bonds, bank deposits) to ensure a 1:1 redemption capability for stablecoins.
Reserve Isolation: Customer Assets must be properly segregated and not used for other purposes.
Management Capability: Possess a sound corporate governance structure; the management team must demonstrate expertise in blockchain technology, financial regulation, and risk management.
Technical Security: The distributed ledger technology platform must undergo third-party security audits to ensure system security and processing capability.
Redemption guarantee: Under reasonable conditions, stablecoin holders' redemption requests will be processed at face value, without imposing excessively stringent conditions.
Retail investor protection: The regulation stipulates that only fiat stablecoins issued by licensed institutions can be sold to retail investors, and only licensed stablecoins are allowed to advertise. This design significantly reduces the risk of retail investors encountering fraud or improper sales, making it one of the stricter investor protection measures in global stablecoin regulation.
Transition arrangements: To ensure a smooth market transition, the regulation establishes a flexible mechanism: within the first 3 months of effectiveness, institutions that have already conducted regulated activities in Hong Kong can continue to operate; if a license application is submitted and accepted within the first 6 months, the transition period can be extended to 6 months; the Monetary Authority can also approve temporary licenses. Currently, five institutions, including JD.com Coin Chain, Round Coin Technology, and Standard Chartered Bank, have entered the Monetary Authority's "sandbox" program and can continue to operate during the transition period.
European Union: Classification supervision under the MiCA framework.
The European Union's Markets in Crypto-Assets Regulation (MiCA) establishes the world's first systematic regulatory framework for the crypto asset market, with provisions regarding stablecoins set to take effect in June 2024. The MiCA framework covers 27 EU member states as well as Norway, Iceland, and Liechtenstein, aiming to address the issue of regulatory fragmentation.
Classification regulatory system: MiCA classifies stablecoins into two categories for differentiated regulation:
Electronic money tokens (EMT): Pegged to a single fiat currency (such as the euro) and used as a payment instrument. Issuers must issue at par 1:1 and are prohibited from paying interest. Holders can redeem at par for free at any time.
Asset-referenced tokens (ART): Pegged to multiple assets (such as currencies, commodities, crypto assets, etc.), considered as investment instruments. Issuers must ensure reserve assets are isolated, but the redemption time and value protection are weaker than EMT.
Access and exemptions: EMT issuers must be EU-authorized electronic money institutions or credit institutions; ART issuers need to establish a legal entity in the EU and obtain authorization from their home country's regulatory authorities. To alleviate the burden on small issuers, MiCA has set exemption clauses: amounts outstanding below 5 million euros or stablecoins issued to qualified investors may be exempt from certain authorization requirements.
Reserve Asset Requirements: EMT must be 100% backed by fiat cash or cash equivalents; ART must be supported by diversified assets but must meet minimum liquidity requirements. All reserve assets must be strictly segregated and not mixed with the issuer's own assets.
Cross-border impact and enforcement: MiCA has implemented strict delisting measures for non-compliant stablecoins. On March 31, 2025, Binance delisted USDT, FDUSD, TUSD, DAI, and other stablecoins that do not comply with MiCA regulations across the EU. Subsequently,$Coinbase (COIN.US)$, exchanges like Kraken also followed suit, resulting in a significant decline in liquidity for certain stablecoins in the EU market. This enforcement demonstrates the EU regulatory authorities' serious attitude toward compliance requirements.
Singapore: Robust Regulation of Single-Currency Stablecoins
The Monetary Authority of Singapore (MAS) established a stablecoin regulatory framework on August 15, 2023, reflecting characteristics of "early intervention and precise regulation." This framework focuses on single-currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency, aiming to ensure the value stability of stablecoins through high-standard requirements. Core regulatory requirements: Although the Singapore framework is relatively concise, it establishes critical protective measures:
Reserve Asset Protection: Reserve assets must be high-quality, high-liquidity assets (such as cash or cash equivalents), with a value equal to at least 100% of the circulating stablecoin's face value.
Asset Isolation: Reserve assets must be effectively separated from the issuer's own assets and managed by independent custodians.
Redemption Rights: Holders have the right to redeem the stablecoin at face value within five business days.
Audit Transparency: Reserve assets must be published monthly and verified by independent auditors to ensure public transparency.
Capital Requirements: Issuers must maintain a minimum base capital of 0.5 million SGD or 50% of annual operating expenses, whichever is higher, and liquid assets to reduce insolvency risks and support an orderly business winding down.
Regulatory Scope Definition: Unlike Hong Kong and the EU, Singapore's framework explicitly limits itself to single-currency stablecoins, specifically those pegged to a single fiat currency (such as SGD or USD). More complex forms like algorithmic stablecoins or multi-currency basket-supported stablecoins are not included in this regulatory framework, reflecting Singapore's regulatory philosophy of 'stabilize first, advance later.'
Market Impact and Development Trends
The improvement of the stablecoin regulatory framework is reshaping the global digital asset ecosystem, having a profound impact on market structure, institutional behavior, and financial innovation.
The rise of compliance thresholds and market centralization is an inevitable trend. Strict regulatory requirements are raising industry entry barriers, driving the market structure towards institutionalization and centralization. The minimum paid-up capital requirement of 25 million HKD in Hong Kong, the authorized institution threshold in the EU, and the federal licensing system in the US pose challenges for small startups. Traditional financial institutions and large technology companies are accelerating their entry into the stablecoin market by leveraging capital and compliance advantages. The market expects that the first compliant stablecoins in Hong Kong will be launched by the end of 2025, potentially forming a new market landscape dominated by licensed institutions.
The space for cross-border payment and currency internationalization has opened up. The improvement of the regulatory framework has cleared obstacles for the application of stablecoins in the cross-border payment field. Stablecoins can achieve real-time transactions, significantly shortening the transaction cycle, while reducing transaction fees to 1/10 to 1/100 of traditional banking systems. In Emerging Markets, stablecoins are gradually replacing local fiat currencies for daily payments and salary disbursements. Notably, stablecoins are becoming a new tool for currency internationalization. Hong Kong actively promotes the development of stablecoins, which may facilitate the exploration of offshore RMB stablecoins, enhancing competitiveness by relying on the vast market in mainland China.
The tokenization of real-world assets (RWA) is expected to develop rapidly. Compliant stablecoins are viewed as the key "engine" and "cornerstone" of the real-world asset tokenization ecosystem. In the tokenization process of traditional assets such as trusts, Real Estate, and CSI Commodity Equity Index, stablecoins provide value anchoring and trading medium functions, effectively promoting the expansion of RWA scale.
Overall, although there are certain commonalities in regulatory frameworks across jurisdictions, regulatory differences and policy competition remain significant. The United States, Hong Kong, the European Union, and Singapore exhibit differences in the classification of stablecoins, reserve requirements, licensing standards, etc., which may lead to regulatory arbitrage and cross-border coordination challenges. The key to future international regulatory coordination lies in establishing cross-border mutual recognition mechanisms and principles of regulatory equivalence, avoiding market fragmentation. International organizations such as the Financial Stability Board (FSB) are actively promoting the formation of global consensus on stablecoin regulation, but specific implementation still faces national interests and regulatory sovereignty challenges.
The development of virtual assets in Hong Kong has entered the "fast lane".
Since 2017, the Hong Kong Securities and Futures Commission (SFC) has emphasized the high volatility of virtual assets and the risks associated with trading their derivatives through multiple statements, and in the early stages, issued risk warnings and strict restrictions on virtual asset derivatives trading. In December 2017, the SFC published a circular on "Futures Contracts and Cryptocurrency Related Investment Products for Licensed Corporations and Registered Institutions," requiring financial institutions that offer cryptocurrency-related products to comply with existing financial regulations and to begin exploring the inclusion of virtual assets and their derivatives into regulatory oversight.$Bitcoin (BTC.CC)$In November 2018, the Hong Kong Securities and Futures Commission released a statement regarding the regulatory framework for management companies, fund distributors, and trading platform operators targeting virtual asset investment portfolios, clarifying the regulatory framework for virtual asset portfolio management and trading platform operation, one of the core regulatory contents is the prohibition of virtual asset leverage and derivatives.
In November 2018, the Hong Kong Securities and Futures Commission announced a regulatory framework statement for management companies, fund distributors, and trading platform operators targeting virtual asset investment portfolios, outlining the regulatory framework for virtual asset portfolio management and trading platform operations, with a core regulatory component prohibiting leverage and derivatives of virtual assets.
In November 2019, the SFC issued a warning regarding virtual asset futures contracts, cautioning investors about the risks associated with purchasing virtual asset contracts. In the position statement released on the same day, it clearly stated that operators of virtual asset trading platforms should not engage in any sales, trades, or transactions related to virtual asset futures contracts or derivative instruments, and indicated that platforms selling virtual asset futures contracts may violate Hong Kong legislation. In June 2023, the SFC officially implemented the "Guidelines for Virtual Asset Trading Platforms," launching the VASP licensing regime, while in this guideline, the sale, trading, or transaction of futures contracts or related derivative instruments remains strictly prohibited.
Until February 2025, the SFC officially released the newly formulated "ASPIRe" roadmap, which detailed the regulatory planning for the virtual asset market in Hong Kong. The core objective of product innovation includes "launching more complex products for professional investors, such as new coin placements, derivatives trading, and margin financing tools," marking the first time the Hong Kong regulatory authority indicated it would consider introducing virtual asset derivatives trading in the future.
The regulation and development of the virtual asset derivatives market in the United States started relatively early, allowing virtual asset derivatives to be traded on exchanges and trading platforms, while Hong Kong currently only permits investment in compliant listed virtual asset futures ETF products.
Since 2017, major exchanges in the United States have sequentially sold crypto futures, options, and other derivatives, all of which are regulated by the U.S. Commodity Futures Trading Commission. Since the end of 2024, exchanges including $Coinbase (COIN.US)$ 、$Robinhood (HOOD.US)$Kraken and the CME Group have already begun launching new cryptocurrency derivatives. Currently, the U.S. Bitcoin futures market is primarily dominated by the Chicago Mercantile Exchange, Bakkt, and Cboe Digital, while Deribit holds nearly 85-90% of the global market share for Bitcoin and Ethereum options.
In addition, the United States has a large number of products based on cryptocurrency derivatives, such as Bitcoin Futures ETFs. Compared to the United States, Hong Kong emphasizes compliance and risk control more, taking a cautious and gradual regulatory approach to virtual asset derivatives, although it still allows for some ETFs based on virtual asset Futures. In December 2023, the Monetary Authority and the SFC jointly released an updated version of the "Circular on Intermediaries' Activities Related to Virtual Assets," which clearly states for the first time that virtual asset spot and Futures ETFs can be sold in compliance, marking the first time the SFC has allowed intermediaries to sell related ETFs for virtual asset derivatives, and it is currently the compliant way to trade products with derivatives as the underlying asset in Hong Kong.
The position of the derivatives market in the virtual asset field is becoming increasingly important; virtual asset derivatives will not only become ideal trading tools for highly volatile virtual assets but also accelerate the integration of virtual assets into the modern financial system.
Currently, in the realm of virtual assets, derivatives occupy an increasingly important position; derivatives account for over 70% of the trading in the entire crypto market, which means that most crypto asset transactions are completed through Futures contracts, perpetual contracts, or other derivatives. Centralized platform Futures contracts dominate the virtual asset derivatives market, but decentralized derivatives platforms cover a wider variety of derivative types, indicating that the development of virtual asset derivatives is a trend and an indispensable part of the future development of virtual assets.
Virtual asset derivatives will not only provide professional investors with more risk hedging and yield enhancement tools but will also expand the overall market's liquidity, offering a wider range of risk-return combinations for different types of target investors. At the same time, this will enrich the variety of structured products linked to virtual asset derivatives, opening up greater opportunities in the wealth management market for virtual assets.
Hong Kong has clearly stated that it will introduce virtual asset derivatives, which will bring greater opportunities to the virtual asset market in Hong Kong, helping it to rapidly align with the modern financial system. Additionally, the further diversification of the virtual asset product system will significantly enhance the attractiveness of virtual assets.
Editor/rice
