The next battle for stablecoins: it's not about who issues the currency, but who controls the settlement channels.

Author: TECHUB NEWS Edited and Organized

Core Insights

Summary: The market is discussing the CLARITY Act as a U.S. crypto market structure bill, but deeper transactions are already happening on stablecoin infrastructure: licensing, banking channels, reserve trust, cross-border settlement, and software that makes regulated digital currencies truly usable.

Everyone is watching CLARITY, but it is not law yet. Records on Congress.gov show that H.R.3633 “Digital Asset Market Clarity Act of 2025” passed the U.S. House of Representatives on July 17, 2025, and entered the Senate on September 18, 2025. On May 14, 2026, Senator Kevin Cramer’s office stated that the Senate Banking Committee had approved the Clarity Act, and the bill would proceed to full Senate review.

This is enough to change market expectations, but not enough to change the law itself. This distinction is important. Markets often trade the pathway first, then the provisions.

More critically, CLARITY is not emerging in isolation. As early as July 18, 2025, the GENIUS Act became Public Law No.119-27, establishing a federal framework for U.S. payment stablecoins. One bill attempts to define the digital asset market structure, while the other has already opened legal pathways for “cash-like tools” in the market.

Together, the questions change. The issue is no longer whether stablecoins can survive regulation, but who can turn them into financial pipelines.

The U.S. is transforming stablecoins from trading balances into cash-layer assets

For a long time, stablecoins were confined to a narrow box: exchange balances, offshore liquidity, DeFi collateral, and USD exposure for crypto traders.

The GENIUS Act opened this box. According to Congress.gov summaries, licensed payment stablecoin issuers must maintain 1:1 reserves, publish redemption policies, disclose reserves monthly, and comply with the Bank Secrecy Act. Compliant payment stablecoins are not considered securities under securities law.

This combination is commercially critical. A stablecoin with a statutory issuer framework, reserve rules, and redemption obligations is no longer just a trading chip but could become a settlement tool. Of course, not all stablecoins will attain this status. The significance of the new system is precisely in distinguishing stablecoins that can enter the regulated financial system from those still stuck in offshore liquidity markets.

The foreign issuer clause makes this step more impactful for the U.S. The Public Law text of the GENIUS Act addresses the issue of foreign issuers entering the U.S. market, linking access to comparable regulation, registration, and reserve requirements. In other words, a global USD stablecoin operation must also incorporate jurisdictional considerations into product-market matching.

Market players like to discuss token design. But profits may be hidden in less glamorous areas: reserve custody, redemption operations, compliance reporting, banking relationships, and distribution channels.

Europe is not telling the same story

If the U.S. is paving the way for USD stablecoins to become regulated payment infrastructure, Europe is tackling a different issue: preventing private cryptocurrencies from weakening the single market.

Under the MiCA framework, the European Banking Authority (EBA) states that asset-referenced tokens and electronic money tokens must obtain relevant authorization to operate within the EU. EBA will also assess whether tokens are significant; once they meet significance standards, EBA can assume direct or joint supervision responsibilities.

This is not a matter of wording but of business environment differences. The U.S. discusses market structure and USD competitiveness, while Europe is more concerned with monetary sovereignty, consumer protection, market integrity, and regulatory transparency.

For entrepreneurs, Europe is not a market where you can scale first and then comply later. Products must be built with compliance from day one. Custody, disclosures, reserve monitoring, listing controls, wallet screening, and regulatory reporting are not backend details but core market access requirements.

In Europe, compliance is not a tax on the product but part of the product itself.

Hong Kong makes Chinese-language market opportunities concrete

Hong Kong is the most promising place for Chinese entrepreneurs to seriously consider stablecoins.

The Hong Kong Monetary Authority (HKMA) states that after the “Stablecoin Ordinance” takes effect on August 1, 2025, issuing fiat-backed stablecoins becomes a regulated activity requiring licensing. The HKMA registry shows two stablecoin issuer licenses effective from April 10, 2026: Anchorpoint Financial Limited and HSBC Hong Kong.

The list is short, but that’s the point—the scarcity will create a market around licenses.

Licensed issuers need reserve reports, redemption systems, transaction monitoring, wallet controls, merchant integrations, and exchange connectivity. Banks and brokerages will engage with stablecoins but cannot inherit all crypto risks. Tokenized funds and securities require cash legs. Exporters and regional SMEs need faster settlement and cleaner reconciliation.

Hong Kong’s value lies in bridging Chinese business networks and international financial rules. But it is not a backdoor into Mainland China. This distinction will determine which products are worth investing in and which are just regulatory illusions.

A more realistic Hong Kong opportunity is not retail speculation but offshore Chinese-language financial infrastructure.

Asia will not become a unified stablecoin market

Many entrepreneurs mistakenly see Asia as a single stablecoin market. Regulators are doing the opposite.

Singapore’s framework focuses on single-currency stablecoins issued in Singapore, pegged to SGD or G10 currencies. MAS materials show that reserve assets must be low-risk, highly liquid, at least equal in value to circulating stablecoins, and held by qualified custodians; redemption at face value must occur within five business days.

Japan leans more toward institutional pathways. The Japan Financial Services Agency (FSA) framework indicates that digital currency stablecoins can only be issued by banks, funds transfer service providers, and trust companies, with requirements for face-value redemption and price stability. JPYC completed its funds transfer service registration in August 2025, showing that Japan’s system can lead to real issuance paths but through a very conservative boundary.

UAE is more like building a payment corridor. The Central Bank announced Payment Token Services Regulation in June 2024, covering issuance, custody, transfer, exchange, and including AML, consumer protection, conduct standards, risk management, and technology-neutral principles.

The UK and Canada are not standing still. The Bank of England released a consultation on systemic stablecoins on November 10, 2025; Canada’s Ministry of Finance announced that its proposed framework will require non-bank fiat stablecoin issuers to register with the Bank of Canada, maintain 1:1 high-quality reserves, and offer face-value redemption, expected to take effect after rulemaking and consultation in 2027.

The result is not a single global stablecoin system but a patchwork of different payment corridors. Each corridor has its own currency, licensing, banking partners, redemption rules, and customer base.

This is more complex than a universal token story but closer to where real companies are born.

Issuers are not necessarily the best business

Visa data shows stablecoin supply grew from $186 billion in December 2024 to $274 billion in December 2025; after excluding high-frequency trading wallets, smart contract addresses, and bot activity, adjusted trading volume in 2025 is expected to exceed $10 trillion.

Big numbers attract issuers, but big numbers do not automatically mean a viable business model.

Issuing stablecoins requires capital, licenses, and strong operational capabilities. The less crowded opportunities may lie beneath issuers—in tools that make stablecoins accepted by enterprises.

This includes payment orchestration connecting multiple licensed partners, funds management software for exporters and platforms, reserve and attestation dashboards for issuers, wallet screening, sanctions controls, Travel Rule workflows, transaction monitoring, and infrastructure for tokenized funds, bonds, and RWA with cash legs.

Customers are not abstract “crypto users.” They are payment companies seeking faster settlement, brokerages supporting tokenized assets, SMEs paying suppliers, funds handling subscriptions and redemptions, or wallets within regulatory boundaries.

Chinese entrepreneurs may have an advantage here. Many teams understand cross-border trade, offshore structures, Asian payment fragmentation, and Chinese-language merchant networks. But products cannot just be “cheaper stablecoins.” They must solve workflows: save time, reduce capital lock-up, improve reconciliation, or open underbanked payment corridors.

Stablecoins can be behind the scenes, but benefits must be front and center.

The real challenge lies in banks and regulation

The least comfortable aspect of stablecoin opportunities is that crypto teams do not fully control the most critical resources.

They need bank accounts, reserve custody, payment partners, auditors, compliance staff, transaction monitoring, anti-fraud operations, legal advice, and local fiat liquidity. They need licenses or a licensed partner. Blockchains can change, but trusted banking relationships are hard to replace.

This is why the next cycle may reward “distribution with compliance capabilities.” Pure regulatory arbitrage is becoming less sustainable. Low-margin models that cannot afford compliance costs will struggle. Projects relying on fuzzy jurisdictional positioning will be harder to sell to institutions.

There is also a macro constraint. BIS has warned that stablecoins could trigger currency sovereignty concerns and weaken foreign exchange controls. BIS also notes that stablecoins currently mainly provide foreign currency access, primarily in USD; in high-inflation, capital control, or USD account-restricted countries, stablecoins are especially attractive to users and businesses.

This tension is the business itself. Users want better liquidity of USD, regulators want traceable funds. Winners will not ignore this tension but productize it.

Mainland China has clearer boundaries. The U.S. Library of Congress’s summary of documents from 2021 by the People’s Bank of China and other agencies states that virtual currencies do not have the same legal status as fiat currency and highlights risks of virtual currency trading speculation. For Chinese-language teams, a safer path is not to develop crypto products for retail users in Mainland China but to build compliant infrastructure within jurisdictions where rules permit.

What Chinese entrepreneurs should do

The best starting point is not a token white paper but a real customer with a painful payment or settlement process willing to pay for a solution.

Exporters need invoice-linked receivables, controlled conversions, and supplier payments. Market platforms need cross-currency, cross-jurisdiction seller settlement. Tokenized funds need subscription, redemption, and reporting channels. Wallets need screening and Travel Rule workflows. Licensed issuers need transparency in reserves and redemption operations. Acquirers need stablecoin settlement that looks like ordinary accounts receivable.

These businesses are less glamorous than issuing tokens but may be more sustainable.

Entrepreneurs should ask very specific questions: Where are the customers? Which currency? Which license is needed? Who are the banking partners? What are the compliance obligations? Which part of the workflow is painful enough to pay for?

If the answer is just “stablecoins are the future,” that’s not a business yet.

Conclusion: The new premium is legal operational capability

CLARITY is not law; GENIUS is law. MiCA is in effect. Hong Kong has issued stablecoin licenses. Singapore, Japan, UAE, UK, and Canada are defining their boundaries.

Looking at all these together, the market is moving away from pure offshore stages. Stablecoins are no longer just exchange balances but are becoming candidates for settlement infrastructure. This shift will not simplify the market; it will make it more institutional, fragmented, and license-dependent.

For entrepreneurs, opportunities remain large, but the focus has shifted. The next stablecoin cycle may not belong to the loudest issuers but to those who can access the right channels, earn trust from banks and regulators, and develop regulated digital currencies as seamlessly as traditional financial tools.

It’s harder to spread than issuing tokens, but it’s more valuable.

Risk Disclaimer

This article is for industry information and research analysis only and does not constitute any investment, legal, or tax advice. Policies, licensing, and market information related to virtual assets change rapidly; please refer to official disclosures from regulators, trading platforms, and projects.