The global digital asset market welcomes a new rise driven by regulation.

With the introduction of stablecoin-related legislation in the United States and Hong Kong, the global digital asset market has officially entered a new rise phase driven by regulation. The implementation of these regulations not only fills the regulatory gap for stablecoins pegged to fiat currency but also provides the market with a clear compliance framework, including asset reserve segregation, redemption guarantees, and anti-money laundering compliance requirements, effectively reducing systemic risks such as run risks or fraud.

This article will delve into the core framework of these two important bills, combining quantitative forecasts to systematically project the rise trajectory of compliant USD stablecoins over the next decade and their impact on the restructuring of public chain ecosystems.

1. The Rise of Stablecoins and Quantitative Analysis under the US GENIUS Act

The "GENIUS Act" (full name: the American Stablecoin National Innovation and Establishment Act) passed by the U.S. Senate in May 2025 marks a significant advancement in the regulation of stablecoins in the United States. The act establishes a detailed regulatory framework for stablecoin issuers, requiring issuers to hold high-liquidity assets such as cash in U.S. dollars at a ratio of at least 1:1, short-term U.S. Treasury bonds, or government money market funds as reserves, and to undergo regular audits while complying with anti-money laundering and know-your-customer requirements. Furthermore, the act prohibits stablecoins from providing interest returns, restricts foreign issuers from entering the U.S. market, and clearly states that stablecoins are neither securities nor commodities, providing a clear legal positioning for digital assets. This legislation aims to enhance consumer protection, mitigate financial risks, and create a stable regulatory environment for financial technology innovation.

The implementation of the GENIUS Act is expected to have a profound impact on the global cryptocurrency market landscape. Firstly, investing funds in high liquidity dollar assets that do not allow interest will directly promote the issuance of U.S. Treasury bonds, making stablecoins an important channel for the distribution of U.S. bonds. This mechanism not only helps alleviate the financing pressure of the U.S. fiscal deficit but also strengthens the international settlement position of the dollar through digital currency channels. Secondly, a clear regulatory framework may attract more financial institutions and technology companies to enter the stablecoin field, promoting innovation and efficiency in payment systems. However, the bill has also sparked some controversies, such as the potential conflict of interest that may arise from the Trump family's involvement in the cryptocurrency industry, as well as international regulatory coordination issues that may arise from restrictions on foreign issuers. Nevertheless, the GENIUS Act provides institutional guarantees for the development of stablecoins and marks an important step for the U.S. in the global competition for digital asset regulation.

According to a prediction by a certain financial institution, under a clear regulatory path, the global stablecoin market value will rise from 230 billion USD in 2025 to 1.6 trillion USD in 2030. It is worth noting that this prediction is based on two key assumptions: first, compliant stablecoins will accelerate the replacement of traditional cross-border payment channels, saving about 40 billion USD in international remittance costs each year; second, the locked amount of stablecoins in decentralized finance protocols will exceed 500 billion USD, becoming the foundational liquidity layer of decentralized finance.

2. The Unique Positioning of Hong Kong's Stablecoin Regulatory Framework

The recent release of the "Stablecoin Regulation" by the Hong Kong Special Administrative Region government marks significant progress in its systematic layout in the Web 3.0 field. The regulation establishes a licensing system for the issuance of stablecoins, requiring issuers to obtain permission from the Hong Kong Monetary Authority and meet strict requirements in areas such as reserve asset management, redemption mechanisms, and risk control. In addition, Hong Kong plans to introduce a dual licensing system for over-the-counter trading and custody services within the next two years, further perfecting the full-chain regulatory system for virtual assets. These measures aim to strengthen investor protection, enhance market transparency, and solidify Hong Kong's position as a global digital asset center.

The Hong Kong Monetary Authority plans to release operational guidelines on the tokenization of real-world assets in 2025, promoting the on-chain tokenization process of traditional assets such as bonds, real estate, and commodities. By leveraging smart contract technology, functions such as automatic dividends and interest distribution will be realized. Hong Kong is committed to building an innovative ecosystem that integrates traditional finance with blockchain technology, opening up broader application space for the development of Web 3.0. Under Hong Kong's regulatory framework, the issuance of stablecoins will show a prosperous development trend of multi-currency and multi-scenario, further consolidating Hong Kong's position as a technology and finance hub.

The Hong Kong "Stablecoin Regulation Draft" draws on the regulatory logic of the United States, but shows significant differences in implementation details:

• Reserve requirement: The United States requires 100% reserves, while Hong Kong allows for some non-cash assets.
• Issuer: The United States restricts foreign issuers, while Hong Kong is open to global issuers.
• Interest Policy: The United States prohibits the provision of interest, while Hong Kong has not made a clear regulation.
• Regulators: In the U.S., it is the OCC; in Hong Kong, it is the Monetary Authority.
• Regulatory Scope: The U.S. focuses on payment-type stablecoins, while Hong Kong covers a broader range of virtual assets.

Three, the evolution of the global stablecoin landscape under regulatory competition

(1) The strengthening effect of the US dollar stablecoin as a global reserve currency

Under the regulatory framework established by the GENIUS Act, payment stablecoins must be backed by U.S. Treasury securities as reserve assets. This provision gives dollar stablecoins strategic significance that transcends the realm of digital currencies. Essentially, these stablecoins have become a new distribution channel for U.S. Treasury securities, creating a unique capital circulation system globally: when global users purchase stablecoins denominated in dollars, the issuing institution must allocate the corresponding funds as Treasury securities. This not only facilitates the flow of funds back to the U.S. Treasury but also, in an intangible way, strengthens the global usage breadth of the dollar. This mechanism can be seen as a globalization extension of the dollar's financial infrastructure.

From the perspective of international settlement, the emergence of stablecoins marks a paradigm shift in the dollar clearing system. Under the traditional model, the cross-border flow of dollars relies heavily on interbank settlement networks, while blockchain-based stablecoins directly embed "on-chain dollars" into various compatible distributed payment systems. This technological breakthrough allows dollar settlement capabilities to no longer be limited to traditional financial institutions. This not only expands the international use scenarios of the dollar but also represents a modernization upgrade of dollar settlement sovereignty in the digital age, further consolidating its core position in the global monetary system.

(2) Challenges of Regulatory Coordination in Asia between Hong Kong and Singapore

Although Hong Kong took the lead in establishing a stablecoin licensing system, the Monetary Authority of Singapore simultaneously launched a "stablecoin sandbox" that allows for experimental issuance of tokens pegged to existing fiat currencies. Regulatory arbitrage between the two regions may trigger issuers' "regulatory site selection" behavior, and a unified reserve audit standard and anti-money laundering information sharing mechanism should be established through the ASEAN Financial Regulatory Forum.

Although Hong Kong and Singapore have similar goals in stablecoin regulatory policies, their implementation paths show significant differences. Hong Kong adopts a prudent tightening regulatory approach, with the Monetary Authority planning to establish a legal stablecoin licensing system, positioning stablecoins as "virtual bank alternatives" and strictly adhering to traditional financial regulatory frameworks. In contrast, Singapore adheres to an experimental regulatory philosophy, allowing innovative pilot projects that link digital tokens to fiat currencies, retaining flexibility for technological and business model innovation, and overall adopting a regulatory attitude of tolerance for trial and error.

This regulatory discrepancy may lead issuing institutions to selectively register to circumvent strict scrutiny, or to engage in arbitrage operations by exploiting differences in regulatory standards, thereby undermining the effectiveness of the fiat currency peg mechanism's review. In the long term, if there is a lack of coordination, this divergence may compromise regulatory fairness and policy consistency, and even trigger regional regulatory competition risks, causing both regions to fall into a wasteful competition. Furthermore, the lack of uniformity in regulatory standards may weaken Asia's voice in the global stablecoin system, thus affecting the competitiveness of Hong Kong and Singapore as international financial centers.

Regulatory agencies in both regions need to strengthen policy coordination, seeking a better balance between preventing systemic risks and encouraging financial innovation, in order to enhance Asia's overall influence in global digital financial governance.

Conclusion: Regulatory Clarity Opens a Golden Decade for Stablecoins

The joint implementation of the U.S. GENIUS Act and the Hong Kong regulatory draft marks the transition of digital asset regulation from fragmentation to systematization. Compliant USD stablecoins are expected to experience a magnitude rise within the next decade, becoming the core bridge connecting traditional finance and the crypto ecosystem. The technological evolution of public chain infrastructure will determine its ability to capture maximized value dividends within the regulatory framework. For issuers, building a multi-chain, multi-currency, and multi-regulatory compatible stablecoin system will be the key strategy to win the competition in the next decade.