In a significant stride toward becoming a global Web3 leader, Hong Kong's Legislative Council has passed the “Stablecoins Bill,” establishing a comprehensive licensing framework for fiat-backed stablecoin issuers.
The legislation—approved following its third reading, as announced by Legislative Council member Johnny Ng Kit-Chong on 21 May—positions the city as a serious contender in the race to shape the future of digital finance.
Under the new regulatory regime, institutions can begin applying for stablecoin issuance licenses from the Hong Kong Monetary Authority (HKMA) by year’s end.
To qualify, stablecoins must be fully backed by fiat currencies, ensuring robust oversight, transparency, and investor confidence.
Ng emphasized that Hong Kong is actively inviting global enterprises to participate in this initiative, even offering personal support to facilitate introductions and collaboration:
“I am also happy to facilitate connections and collaborate with all stakeholders to advance the development of Web3 in Asia and globally, with Hong Kong at the center.”
Speaking on the development, Christopher Hui, the Secretary for Financial Services and the Treasury, noted:
“This is not only in line with international regulatory requirements, but also lays a solid foundation for Hong Kong’s virtual asset market, which, in turn, promotes the sustainable development of the industry, protects users’ rights and interests, and strengthens Hong Kong’s status as an international financial centre."
This bold move highlights Hong Kong’s commitment to advancing its digital asset ecosystem and comes just one day after the US advanced the GENIUS Act—its own long-awaited stablecoin framework—to the Senate.
Ng described the newly passed Stablecoins Bill as a foundational step in building Hong Kong’s Web3 infrastructure:
“The most crucial step is to develop more real-world applications."
He emphasized that stablecoins represent a transformative financial innovation with the potential to revolutionise retail payments, streamline cross-border trade, and enhance peer-to-peer transactions.
Ng voiced strong support for the development and adoption of stablecoins, arguing that their integration into the financial system could unlock new efficiencies and drive long-term growth.
To further bolster the sector’s competitiveness, he proposed distributing interest earnings to stablecoin holders—a move he believes would not only attract more users but also promote market stability and sustainable expansion.
Ng’s comments align with emerging data highlighting the rapid growth of yield-bearing stablecoins.
Their circulation has surged to $11 billion, now accounting for 4.5% of the total stablecoin market—up from just $1.5 billion and a 1% share at the beginning of 2024.
This momentum, he noted, reinforces the case for supporting interest-bearing models as a way to increase adoption and solidify stablecoins’ role in the broader financial ecosystem.
President Donald Trump’s top advisor on crypto and AI, David Sacks, announced Wednesday that the administration anticipates “significant bipartisan support” for the GENIUS Act—a landmark stablecoin bill now advancing in the US Senate.
Sacks framed the legislation not only as a regulatory milestone but as a strategic move to unlock demand for US Treasuries and reinforce American leadership in digital finance.
Sacks said:
“We already have over $200 billion in stablecoins — it’s just unregulated. If we provide the legal clarity and legal framework for this, I think we could create trillions of dollars of demand for our Treasuries practically overnight, very quickly.”
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act cleared a key procedural hurdle with a 66–32 Senate vote, overcoming a filibuster and setting the stage for a final floor vote on 22 May.
If passed, the bill would proceed to the House of Representatives before heading to President Trump’s desk for signature.
If enacted, it would establish the first comprehensive federal framework for regulating stablecoins.
Sen. Kirsten Gillibrand (D-NY) who co-sponsored the bill along with Sen. Bill Hagerty (R-TN), Chairman Tim Scott (R-SC), Sen. Cynthia Lummis (R-WY) and Sen. Angela Alsobrooks (D-MD), stated:
“The bipartisan GENIUS Act will provide regulatory clarity to this important industry, keep innovation on shore, add robust consumer protection, and reaffirm the dominance of the U.S. dollar.”
Sacks continued:
“Stablecoins offer a new, more efficient, cheaper, smoother payment system — new payment rails for the U.S. economy. It also extends the dominance of the dollar online.”
Backed aggressively by the White House, the GENIUS Act arrives at a pivotal moment for the digital asset market.
Stablecoins now represent the bulk of on-chain transaction volume, underscoring the urgency for a standardised legal structure.
The legislation lays out core regulatory requirements, including strict anti-money laundering (AML) rules, reserve standards, and new oversight mechanisms designed to ensure transparency and consumer protection.
However, the bill also includes controversial provisions—most notably, a proposed ban on yield-bearing stablecoins and limitations on large technology companies serving as issuers.
These clauses have sparked debate and will likely become focal points in the broader regulatory conversation.
As the ecosystem grows and scrutiny intensifies, the GENIUS Act could redefine the balance between innovation and oversight in the US digital asset economy.
Singapore has entered the stablecoin arena with the launch of XSGD—its Singapore dollar-backed stablecoin—on the XRP Ledger (XRPL), signalling a deeper partnership between StraitsX and Ripple aimed at transforming digital payments across Asia.
The integration brings XSGD to a blockchain purpose-built for large-scale tokenisation, enabling real-time payments and programmable financial flows for developers, fintech firms, and financial institutions alike.
Regulated by the Monetary Authority of Singapore (MAS) and fully backed 1:1 by reserves held with DBS Bank and Standard Chartered, XSGD offers a compliant and trusted alternative for on-chain transactions and real-time cross-border settlements.
The rollout, developed in collaboration with Ripple—an enterprise blockchain and crypto infrastructure provider—marks the first phase of a broader strategy to embed stablecoins into Asia’s payment ecosystem.
A second phase, expected in June 2025, will focus on institutional-grade capabilities such as programmable payouts, merchant settlements, and compliance-ready infrastructure.
As Asia’s cross-border commerce is projected to surpass US$4 trillion by 2030, regulated stablecoins like XSGD are poised to become critical infrastructure in the next wave of payment innovation.
Liu Tianwei, Co-Founder and Deputy CEO at StraitsX, noted:
“The availability of XSGD on the XRP Ledger is more than a deployment. It’s a marker of where financial infrastructure is heading. As digital money becomes embedded in the global economy, regulated stablecoins like XSGD will serve as the foundation for borderless, real-time, and compliant-ready financial services. Our milestone with Ripple reflects our broader vision to make trusted digital currencies central to the way value moves in tomorrow’s financial system.”
Ripple’s Asia-Pacific managing director, Fiona Murray, noted that bringing XSGD to the XRPL could serve as a pivotal development in advancing secure, transparent, and scalable payment solutions across the region.
She stated:
“StraitsX’s launch of XSGD on the XRP Ledger underscores that digital assets, including stablecoins, could play a pivotal role in payments. As institutions and developers seek to build real-world financial applications on-chain, we’re proud to collaborate with forward-looking partners like StraitsX to lay the groundwork for an open, enterprise-grade payments future in Singapore and beyond.”
The Senate vote on the GENIUS Act comes at a pivotal moment, as the global race to regulate stablecoins accelerates.
The European Union’s Markets in Crypto-Assets Regulation (MiCA) began enforcing its stablecoin rules in June 2024, while other key jurisdictions—Singapore, Hong Kong, the UAE, and Japan—have already rolled out their own regulatory frameworks.
Meanwhile, the US has faced mounting criticism for its regulatory uncertainty.
Last year’s Geography of Cryptocurrency report highlighted that this lack of clarity has pushed stablecoin activity toward offshore, lightly regulated markets—even as US adoption continues to climb.
Despite the regulatory lag, the United States still leads the world in stablecoin inflows, underscoring its central role in the evolving digital asset landscape.
Stablecoins, first introduced in 2014, were conceived as a bridge between the reliability of fiat currencies and the efficiency of blockchain technology.
Originally used to facilitate crypto trading, their role has since expanded dramatically.
Today, fiat-backed stablecoins are driving real-time cross-border payments, acting as a digital store of value, and broadening access to US dollar-denominated assets around the world.
Since 2020, the sector has experienced rapid growth, with the total stablecoin market cap nearing $232 billion as of May 2025.
But it is not just the size of the market that is evolving — it’s how stablecoins are being used.
Chainalysis data shows that stablecoins now function across three core use cases: as a store of value, a trading asset, and a payments instrument.
Trading usage remains the most reactive, spiking during major geopolitical events such as the 2024 US presidential election.
In contrast, the use of stablecoins as a store of value has gained steady momentum, underscoring their appeal amid ongoing macroeconomic uncertainty.
Payment-related usage is also on the rise, pointing to increasing adoption in everyday financial activity.
From Singapore’s regulated banking system to US legislative debates and innovations in zero-knowledge infrastructure, stablecoins are entering a new phase — one defined by regulatory clarity, enhanced programmability, and growing real-world utility.
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