Comparison of Stablecoin Legislation in Hong Kong, China, the United States, and the European Union

The “Stablecoin Regulation Draft” in Hong Kong, China, was completed with its third reading in the Hong Kong Legislative Council on May 21, 2025. It still needs to be signed by the Chief Executive and published in the Gazette to take effect. The transition arrangements are expected to be completed within 2025, and the first batch of compliant stablecoins may debut in early 2026.

The U.S. stablecoin bill, known as the “GENIUS Act,” was officially introduced by Senator Bill Hagerty in February 2025, aiming to establish a dual-track regulatory framework at both the federal and state levels. On May 20, 2025, the U.S. Senate passed the “motion to terminate debate” with 66 votes in favor, moving into the formal legislative process, with the next step requiring a vote in the House of Representatives and the President’s signature. If both chambers pass it, it could be signed into effect by the President as early as the end of May 2025.

The EU stablecoin legislation, known as the Markets in Crypto-Assets Regulation (MiCA), was passed by the European Parliament in April 2023. It will take effect in phases: the first phase (regulations regarding stablecoins) will come into effect on June 30, 2024, covering regulatory rules for electronic money tokens (EMT) and asset-referenced tokens (ART). The second phase (regulations regarding other crypto asset services) will be fully implemented by December 30, 2024.

Based on the collected public information, we conduct a comprehensive comparative analysis of the stablecoin-related requirements of Hong Kong, the United States, and the European Union from the perspectives of legislative purpose, regulatory scope, regulatory entity, issuer, issuance procedure, regulatory requirements, usage scenarios, and extraterritorial supervision.

I. Purpose of Legislation

Hong Kong, China aims to strengthen the regulation of stablecoins, safeguard investor interests, and ensure the stability of the financial system. As an emerging digital asset, the widespread use of stablecoins may have potential impacts on Hong Kong’s financial system, such as affecting the transmission of monetary policy and the security of payment systems. The legislation aims to regulate the issuance and use of stablecoins and prevent financial risks.

The core objective is to balance financial stability and innovation, consolidate the status of an international financial center, promote offshore RMB stablecoin as a “digital bridge” for cross-border payments, and attract global Web3 projects to settle. The feature is to emphasize compatibility and openness, reserving space for future stablecoin innovations (such as interest yields and multi-currency pegs).

The United States aims to promote financial innovation while ensuring financial stability. The use and development of stablecoins in the United States provide new methods and tools for financial transactions, but there are also potential systemic risks. The bill seeks to find a balance between encouraging innovation and maintaining stability, providing a framework for the legitimate and safe operation of stablecoins.

The core goal is to maintain the hegemony of the US dollar, prevent systemic risks, and promote the payment stablecoin to become an extension of the “on-chain dollar” to serve the US fiscal financing needs (such as absorbing short-term US debt). It is characterized by the explicit exclusion of non-USD stablecoin compliance and the restriction of the financial attributes of stablecoins (e.g., the prohibition of interest attached).

The European Union aims to protect investors, maintain financial stability, and promote financial innovation through its legislation. As the trading and use of crypto assets, including stablecoins, become more frequent within the EU, this framework seeks to regulate market order through unified regulatory standards, prevent fraud and market manipulation, and create a favorable regulatory environment for legitimate crypto asset trading and stablecoin issuance.

The core objective is to establish a unified regulatory framework to protect consumers and market integrity, promote the application of Distributed Ledger Technology (DLT), maintain financial stability in the eurozone, and prevent the transmission of risks from crypto assets to the traditional financial system. The feature is to incorporate stablecoins into the existing financial services legislative framework under the principle of “responsible innovation.”

II. Regulatory Scope

Hong Kong stablecoin regulation mainly targets specific stablecoins, namely those pegged to fiat currencies or stable value mechanisms associated with fiat currencies. These stablecoins are typically used in payment, transaction medium, and other scenarios, and have a high correlation with the financial system, making them a focus of regulation. Scope of Coverage Fiat-pegged stablecoins (such as HKD, USD) cover activities like issuance, reserve management, and advertising. Algorithmic stablecoins are not explicitly prohibited but must meet reserve requirements.

The United States has a broad definition of stablecoins, including any digital assets that attempt to maintain a value linked to specific assets. This encompasses stablecoins pegged to fiat currencies, precious metals, and other assets. Additionally, it involves various aspects of stablecoin issuance, circulation, and related financial service providers. The scope is limited to payment-type stablecoins pegged to the U.S. dollar, requiring 1:1 redemption and no interest attributes; non-U.S. dollar stablecoins face compliance restrictions. Securities-type stablecoins are regulated separately by the SEC, and algorithmic stablecoins are not included in the framework.

The EU regulatory scope includes all types of crypto assets, among which stablecoins are an important category subject to stricter regulatory requirements. The regulation focuses not only on the stablecoins themselves but also on the issuance, trading, custody, and related market infrastructure of stablecoins. Coverage Electronic Money Tokens (EMT, such as euro stablecoins) and Asset-Referenced Tokens (ART, such as multi-currency stablecoins) are explicitly excluded from algorithmic stablecoins. Central Bank Digital Currencies (CBDC) and stablecoins issued by public institutions are not applicable.

3. Regulatory Authorities

Hong Kong is uniformly licensed and regulated by the Hong Kong Monetary Authority (HKMA), with the Securities and Futures Commission (SFC) collaborating on anti-money laundering reviews. The Hong Kong Monetary Authority (HKMA) is one of the main regulatory bodies, playing a key role in the regulation of stablecoins. At the same time, other financial regulatory agencies, such as the Hong Kong Securities and Futures Commission, may also participate in regulatory work based on the specific business activities of stablecoins, such as transactions involving the securities nature of stablecoins.

The regulatory bodies in the United States are relatively complex, including the Office of the Comptroller of the Currency (OCC), the Federal Reserve, etc. There is a dual-track regulatory system at the federal and state levels, where banking institutions are regulated by the Federal Reserve and the FDIC, while non-bank institutions can choose between federal (OCC) or state licenses. The OCC is primarily responsible for regulating financial institutions such as banks and has supervisory authority over situations involving banks participating in stablecoin businesses; the Federal Reserve regulates the systemic risks that stablecoins may pose from a macro-prudential perspective. In addition, the Securities and Exchange Commission (SEC) may also regulate activities related to stablecoins that have securities attributes.

European Union At the EU level, institutions such as the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) play a coordinating role in the regulation of stablecoins. At the level of individual member states, national financial regulatory agencies, such as the Federal Financial Supervisory Authority (BaFin) in Germany, are responsible for the specific implementation of regulations. National regulatory agencies are responsible for issuing licenses, allowing operations across the EU through a “passporting” system, with the European Securities and Markets Authority (ESMA) coordinating cross-border issues.

IV. Issuer

Hong Kong requires that the issuer must be a financial institution or enterprise that meets the financial regulatory requirements of Hong Kong. These entities need to have sufficient capital strength to deal with the risks that may be brought about by the issuance of stablecoins, such as ensuring the safety of stablecoin reserve assets. At the same time, it is also necessary to meet the standards of Hong Kong’s financial supervision in terms of corporate governance and risk management.

The United States has relatively strict requirements for issuers, generally speaking, the entity issuing stablecoins needs to obtain the appropriate financial licenses. For example, if the stablecoin involves banking-related activities, such as the custody of reserve assets for the stablecoin, the issuer may need to obtain a banking license or collaborate with a bank. Additionally, the issuer must satisfy Compliance requirements such as the United States Anti-Money Laundering (AML) regulations.

The European Union requires stablecoin issuers to register within the EU and comply with the EU’s prudential regulatory requirements. This includes regulations regarding the capital requirements, business rules, governance structure, and other aspects of the issuing entities. Only entities that meet these requirements can legally issue stablecoins within the EU.

V. Issuance Procedure

Hong Kong, China to issue stablecoins to HKMA to submit an application, including a white paper, reserve management plan, anti-money laundering measures, etc., and existing issuers need to re-apply for licenses during the transition period. During the application process, a detailed stablecoin issuance plan should be provided, including the value anchoring mechanism of the stablecoin, the management method of reserve assets, risk control measures, etc. The Hong Kong Monetary Authority will review the application materials, and the official issuance of stablecoins can only be carried out after the review is passed.

Entities issuing stablecoins in the United States need to register and apply in accordance with U.S. financial regulatory requirements. Banking institutions are directly subject to existing regulations, while non-bank entities must apply to the OCC or state regulatory agencies and undergo monthly compliance reviews. During the application process, relevant regulatory agencies must be provided with the stablecoin issuance plan, compliance program, and other related content. For example, if it involves banking-related activities, approval may need to be sought from the Office of the Comptroller of the Currency. Regulatory agencies will conduct a strict review of the application to ensure that the issuance of stablecoins aligns with U.S. financial regulatory objectives.

The issuer of EU stablecoin needs to prepare issuance documents in accordance with the regulatory requirements of the European Union and apply for registration and authorization with the relevant regulatory authorities. These documents include the stablecoin white paper, which details the stablecoin’s technical architecture, value stabilization mechanism, use cases, and other content. After receiving the application, the regulatory authority will evaluate it based on the unified regulatory standards of the European Union to decide whether to approve the issuance. Once approved in any member state, operations can commence throughout the EU; technical standards, reserve proof, and other documents must be submitted, and non-compliant projects must exit during the transition period.

Six, Regulatory Requirements

Hong Kong, China requires stablecoin issuers to have sufficient legal currency or other high-quality assets that meet regulations as reserves for stablecoins, to ensure the stability of the stablecoin’s value. At the same time, there are also requirements for the transparency of stablecoin transactions; issuers need to regularly disclose information about the reserves of stablecoins, transaction data, and other information. In addition, regarding anti-money laundering and combating the financing of terrorism, stablecoin issuers must establish a comprehensive Compliance system to identify and verify user identities.

The United States emphasizes the stability and security of stablecoin reserve assets, requiring issuers to properly manage and audit reserve assets. In terms of transparency, stablecoin issuers need to disclose to the public information such as the total amount of stablecoins issued, the composition and value of reserve assets, etc. At the same time, it is necessary to comply with the strict anti-money laundering and counter-terrorist financing regulations of the United States, and monitor and report suspicious transactions.

The European Union requires stablecoin issuers to ensure that the reserve assets of the stablecoin match the amount of stablecoin issuance, and that the reserve assets are independently audited. In terms of information disclosure, issuers are required to provide investors and regulators with accurate and complete information, including technical details of stablecoins, risk factors, etc. At the same time, it has strengthened the supervision of stablecoins in anti-money laundering and combating terrorist financing, requiring issuers to take effective measures to prevent related risks.

VII. Scenarios and Regulation

Hong Kong focuses on expanding cross-border trade settlement, DeFi compliance clearing, and retail payment scenarios, encouraging the integration of stablecoins with the real economy. The use cases for stablecoins are mainly concentrated in the legal and compliant fields such as financial transactions and cross-border payments. As an international financial center, stablecoins can be used for fund transfers between financial institutions and for corporate cross-border trade settlements. However, certain usage scenarios that may pose risks, such as those related to illegal financial transactions, will be subject to strict regulation and restrictions.

The United States promotes the use of stablecoins for on-chain payments, government bond financing, and cross-border remittances, restricting their entry into securities or commodity markets. Stablecoins are allowed to be used in various financial transaction scenarios, including retail payments and securities trading settlements. The use of stablecoins in the United States can improve the efficiency of financial transactions and reduce transaction costs. However, regulatory agencies will monitor the use of stablecoins to prevent them from being used for illegal activities such as money laundering and terrorist financing.

The European Union focuses on retail payments and financial infrastructure, supporting stablecoins as a supplement to the “digital euro.” The use cases for stablecoins in the European Union include payments, investments, and more. In the payment sector, stablecoins can be used for cross-border payments and e-commerce payments; in the investment sector, stablecoins can form part of an investment portfolio, but must be conducted in compliance with EU financial regulatory requirements. The EU emphasizes risk assessment of stablecoin use cases to ensure that they do not harm financial stability and consumer interests.

VIII. Strategic Intent

Hong Kong, China aims to attract global innovative projects through flexible regulation, promote the internationalization of the offshore RMB, and establish a Web3 hub in the Asia-Pacific region. For stablecoins issued overseas but traded and promoted in Hong Kong, the Hong Kong financial regulatory authorities will supervise them based on their potential impact on the Hong Kong financial system. If the activities of overseas stablecoins pose a threat to financial stability, investor interests, etc., Hong Kong regulatory authorities may take corresponding regulatory measures, such as requiring information disclosure, restricting transactions, etc.

The United States intends to consolidate the dominance of the dollar in the digital age, using stablecoins to absorb the demand for U.S. Treasury bonds and suppress competition from non-dollar stablecoins. U.S. regulators will advocate exercising regulatory authority over stablecoins issued abroad that involve U.S. investors or have a significant impact on the U.S. financial system. With its strong financial position and the principle of long-arm jurisdiction, the U.S. may require foreign stablecoin issuers to comply with relevant U.S. regulations or impose restrictions on their business activities within the United States.

The EU intends to maintain the financial sovereignty of the Eurozone through unified regulation, prevent the spillover of crypto risks, and balance innovation with safety. The EU will regulate stablecoins issued abroad but providing services within the EU or affecting the EU financial system according to their risk levels. If the operations of an overseas stablecoin do not meet the EU’s regulatory standards, EU regulatory authorities may take measures, such as prohibiting it from conducting business within the EU or requiring it to make corrections, to ensure the safety and stability of the EU financial market.

The stablecoin systems of the three major jurisdictions reflect different strategic orientations: Hong Kong emphasizes openness and compatibility, the United States strengthens dollar dominance, and the European Union pursues unification and security. In the future, compliant stablecoins will become the infrastructure of the on-chain economy, but their regulatory competition may also exacerbate the fragmentation of the global financial system. Enterprises need to choose compliance paths based on their business focus, for example, cross-border scenarios can opt for Hong Kong, dollar clearing focuses on the United States, and the European market must comply with MiCA standards.