On August 1, Hong Kong's "Stablecoin Issuance and Reserve Management Ordinance" officially came into effect. This time, the Hong Kong Monetary Authority's intention is very clear: only stablecoins anchored to the Hong Kong dollar are allowed to be issued. Issuers must obtain a regulatory license, asset reserves are limited to local currency cash and bonds, and strict audit and custody processes are required. At the same time, it also further defines the nature of stablecoins: no longer a simple market-driven product, but officially becoming an on-chain financial instrument that extends sovereign currency. In mainland China, relevant policy exploration of stablecoins is also quietly advancing. From Hong Kong to mainland China, stablecoins are no longer a fringe financial innovation topic; they have entered the arena of monetary policy and sovereign governance, and the real focus has shifted. Three Paths to Stablecoin Regulation When stablecoins enter the regulatory landscape, they become more than just a technical issue; they become part of institutional design. While regulatory approaches in different countries and regions may appear to be either loosening or tightening, they actually address three key questions: the choice of anchor asset, issuance rights, and clearing logic within the operating system. Currently, the United States, the European Union, and Hong Kong are having a significant impact on the direction of global stablecoin regulation. They represent three distinct institutional models. The United States has chosen a market-driven, institutionally backed approach. In 2025, with the passage of the GENIUS Act, stablecoins officially came under federal regulation. However, regulation does not take over issuance, but rather defines the anchoring method and backing requirements: You can issue coins, but they must be anchored to the US dollar, maintain compliant reserves, and be audited by the financial system. This means that the right to issue is ceded to the market, while the right to anchor remains in the hands of the system. From USDC and PYUSD to more soon-to-be compliant dollar stablecoins, the United States has actually established an operating logic of "open front-end and back-end support." As long as you peg to treasury bonds or cash, as long as your account is traceable and audited, you can issue a "dollar interface" on the chain. The advantage is that the United States does not need to be at the forefront itself, but can allow the dollar to naturally penetrate every corner of Web3. Stablecoins have become a kind of "dollar clearing API." But this also presents a risk: US dollar issuance isn't handled by the central bank, but by companies like Circle and PayPal. If any of these issues arise, such as a loss of reserves, delayed disclosure, or a gap in interstate regulation, the stablecoin's anchor isn't to the dollar, but to trust itself. The European Union has chosen a path of internal regulation and reduced authority. MiCA has placed stablecoins under extremely strict oversight. In particular, once a token's circulation reaches a certain threshold (such as 10 million users or a market capitalization of €10 billion), it is categorized as a "significant token" and subject to intervention by higher-level financial institutions such as the European Central Bank, or even restrictions. This is a typical "permission-and-regulate" structure: it allows for existence but not expansion. More notably, both the ECB and ESMA have expressed concerns about the widespread use of dollar-pegged stablecoins in the eurozone in multiple policy statements, arguing that they could erode the euro's monetary sovereignty within the region. Against this backdrop, MiCA's strong regulatory approach to stablecoins can be understood as a form of institutional protection: it allows limited room for innovation while also controlling their widespread penetration in cross-border settlement and local payments. However, high-intensity regulation will also limit the use cases of stablecoins in the EU and increase issuance costs, making it difficult to stimulate market vitality and even more difficult to support the development of business models centered on stablecoins in the EU. Hong Kong has chosen the path of pre-licensing and closed-scenarios. Unlike the US's "open peg" and the EU's "institutional framework," Hong Kong's regulatory approach is more like a "pre-set boundary" from the outset: only stablecoins pegged to the Hong Kong dollar (HKD) are permitted to be issued. Pegs to other currencies like the RMB and USD are prohibited, and multi-currency, commodity-pegged, or algorithmic stablecoins are also prohibited. Issuers must be registered in Hong Kong and obtain a stored value facility (SVF) license, and circulation is limited to local payment scenarios approved by regulators.
This "pre-set boundary" institutional design reflects the three intentions of the Hong Kong regulatory authorities:
First, the sovereignty of the anchored currency is clarified, and only the Hong Kong dollar is recognized as a stable anchor to avoid the infiltration of foreign stablecoins into local monetary policy;
Second, the licensing of issuance qualifications, using the SVF framework to incorporate stablecoins into the existing financial regulatory system, and manage them on par with local payment tools such as Alipay Hong Kong and Octopus;
Third, the closed usage scenarios, only allowing small-scale pilot projects in specific payment ecosystems, and temporarily not opening up on-chain cross-border payments, DeFi circulation or exchange uses. This system is essentially a governance model of "embedded regulation of financial instruments," emphasizing that issuance and use must be locked within a regulatory controllable space from the outset, first ensuring technical verification and risk control of on-chain payments, and then gradually evaluating the path to liberalization. Anchoring to the Hong Kong dollar and restricting its use in certain scenarios can ensure that on-chain funds are highly bound to the local financial order, allowing Hong Kong to gain a proactive position in Asia's stablecoin infrastructure. However, precisely because of the tightened design of currency and use, the openness and spillover effects of Hong Kong's stablecoin are limited, making it difficult to attract cross-border projects or become a key node in the mainstream Web3 payment network. The world of stablecoins after institutional adjustments: The US's "market peg + institutional backstop," the EU's "institutional lock + prudent approval," and Hong Kong's "pre-licensing + local currency anchoring"—these three models may seem vastly different, but they all respond to the same reality: the right to issue and circulate stablecoins will ultimately return to the hands of sovereigns and regulators. As these institutional paths gradually take shape, the competitive logic of the global stablecoin market will also be rewritten. In the future, the competition will no longer be based on "who runs faster or who has the largest market capitalization," but rather on "whose stablecoin can be embedded in more compliant payment systems." This means that the cross-border payment landscape, digital currency settlement networks, and even the liquidity distribution of the public blockchain ecosystem may be undergoing a structural reshuffle.
But now, the market's enthusiasm has reached the other extreme: projects are crowded, concepts are overheated, and hype is taking precedence over construction. The closer the system is to being implemented, the more necessary it is to cool down and self-examine—because sprinting outside the rules is likely to be eliminated on the first day the new system takes effect.
The real opportunities lie not in rushing ahead in the frenzy, but in the hands of those with a compliant position and real-world scenarios when the policy is implemented.
Miyuki
Weiliang
Brian
Weatherly
Alex
Catherine
Anais
Kikyo