Top companies vie for dominance in Asia’s stablecoin race, testing policy direction

Asia’s stablecoin race is becoming polarized between bank-backed national currencies and the US dollar’s legacy, as Japan, Singapore and Hong Kong formalize new frameworks that could shape how cryptocurrencies coexist with monetary policy across the region.

Over the past week, there have been two important developments that indicate the intensification of stablecoin competition in Asia. These include Japan’s megabank consortium project and China’s blockade of a Hong Kong project that exposed regulatory caps on private issuers.

Observers say the stablecoin race across Asia will test the extent to which governments will allow private infrastructure to reshape national monetary systems without losing control of capital flows.

“Most legislators and regulators across Asia are working to facilitate the introduction of crypto- and stablecoin-specific laws and frameworks,” said John Cho, Vice President of Partnerships at Kaia DLT Foundation. decryption. “The enthusiasm for the potential efficiencies and optimizations brought to legacy infrastructure through stablecoins is real and consistent across the region.”

But it also points to a “gap” between Asian lawmakers and regulators, with one side “arguing that stablecoin issuance and reserve management should only be in the realm of existing traditional institutions,” and the other “arguing that this limits the speed of innovation, growth and adoption,” Cho noted.

In the Japanese project, MUFG, SMBC and Mizuho have announced that they will be working together to issue a yen-pegged currency through MUFG’s Progmat platform by March next year. report from Nikkei.

This comes as Japan moves to expand its financial rulebook to cover digital assets. Cryptocurrency insider trading That would give securities regulators the power to investigate illegal activity.

Across the ocean, China is moving in the opposite direction, ordering big tech companies to: Canceling stablecoin plans Companies including Standard Chartered, Animoca Brands and HKT Group formed Anchorpoint Financial in August. Stablecoin issuer license Under the City’s newly established Digital Asset Framework.

In Singapore, StraitsX operates under the full supervision of the Monetary Authority of Singapore and currently uses the SGD-backed XSGD token. listed On Coinbase as of late September. Meanwhile, Tether continues to expand across Asia. Introduction of USDT In July, Kaia blockchain will be introduced for Korean ATMs and integrated with LINE’s regional ecosystem.

convergence and divergence

Dermot McGrath, co-founder of venture capital firm Ryze Labs, said Asia was moving “from policy making to controlled deployment”. decryption.

For Japan, progress will be “steady but cautious,” while Hong Kong will remain “sensitive to Beijing’s red lines.” Meanwhile, Singapore is considering “acquiring a small number of reference issuers” to use trust benchmarks to bring stablecoin products to market.

McGrath said regulators “don’t want to lose control, but financial institutions also don’t want to stay in a neutral position for too long.”

“We’re seeing three different approaches emerge: the megabank consortium model, the laissez-faire or ‘Swiss’ model, and the traditional conservative model,” Stable CEO Brian Mehler said. decryption.

“Given its head start and the momentum of its banking consortium, Japan could emerge as an institutional leader,” Mr Mailer said, adding that Singapore was likely to remain “an innovation hub, leveraging its infrastructure and regulatory clarity to attract global players.” Meanwhile, Hong Kong is “establishing itself in enterprise-centric applications where compliance is paramount.”

More broadly, these developments appear to be “a natural modernization forced in part by the impending implementation deadline for ISO 20022 structured and hybrid addresses,” said Kevin O’Brien, founder and CEO of Verdicti Ventures. decryption.

He said that while “each jurisdiction will have its own nuanced considerations and approaches,” the technical “adaptability” around these may still be “in the early stages of innovation” compared to what is currently available for “universal public stablecoins.”