Table of Contents#
Overview of Major Countries' Attitudes Towards Stablecoins
United States
Europe
Singapore
Japan
Hong Kong, China
What Are Compliant Stablecoins?
US Dollar Stablecoins
Euro Stablecoins
Japanese Yen Stablecoins
Conclusion
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Currently, the total market capitalization of crypto stablecoins has surpassed $206 billion. In the face of growing market demand, the attitudes of countries around the world towards stablecoins are also changing, with more requirements for compliance. This article will delve into the current state of the stablecoin market, the attitudes of major countries towards stablecoins, and briefly outline the compliant stablecoin projects at this stage for user reference.
As a type of cryptocurrency aimed at maintaining stable value, stablecoins have made significant progress over the past decade and play an increasingly important role in cross-border payments, decentralized finance (DeFi), and value storage. With the gradual increase in market demand, the attitudes of countries around the world towards stablecoins are also changing, with more requirements for compliance.
Overview of Stablecoins#
The cryptocurrency market is known for its high volatility. To combat and reduce this volatility while still retaining the advantages of cryptocurrencies, such as global accessibility and fast transactions, stablecoins have emerged. Their value is typically pegged to a fiat currency (like the US dollar) or other valuable assets (like gold or oil) to ensure price stability.
Based on their mechanisms for maintaining price stability, stablecoins can generally be categorized into four main types: fiat-backed, crypto-backed, algorithmic, and commodity-backed, with fiat-backed stablecoins being the most prevalent.
The first stablecoin to appear was USDT, issued by Tether in 2014. Over the past decade, the stablecoin market has experienced rapid development. According to data from DeFiLlama, the total market capitalization of stablecoins has now surpassed $206 billion, with USDT leading the market with a 66.69% market share, followed by USDC, USDe, and DAI with market capitalizations of $45.7 billion, $5.8 billion, and $4.4 billion, respectively.
A Review of Global Compliant Stablecoins#
(Source: DeFiLlama)
Most stablecoins, such as USDT, USDC, and TUSD, support multiple chains, while a few stablecoins, like USR, DEUSD, and USDB, currently support only a single blockchain. Among all blockchains, the number of stablecoins circulating on the Ethereum network is the highest, with a market capitalization of $113.4 billion, accounting for a significant share, followed by Tron, BNBChain, Solana, and Arbitrum with market capitalizations of $59.2 billion, $6.9 billion, $5.9 billion, and $3.8 billion, respectively.
Overview of Major Countries' Attitudes Towards Stablecoins#
The rapid development of the stablecoin market, especially its widespread adoption in cross-border payments and financial innovation, has garnered significant attention from regulatory agencies worldwide. In recent years, countries and regions such as the United States, Europe, Singapore, Japan, and Hong Kong have introduced relevant policies and regulations to further regulate the stablecoin market and create a healthier market environment for participants.
United States#
As of now, there is no specific federal law in the United States targeting stablecoins, but the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission) are strengthening their oversight in this area. For example, in February 2023, the SEC deemed BUSD to be an unregistered security and planned to sue its issuer, Paxos, and may take enforcement action. In November of the same year, PayPal also received a subpoena from the SEC regarding its launched US dollar stablecoin, PYUSD.
Additionally, the regulatory attitudes towards stablecoins vary by state, but some state governments require stablecoin issuers to obtain compliant cryptocurrency licenses, such as the Money Transmitter License and the BitLicense introduced by the New York State Department of Financial Services (NYDFS).
Europe#
Europe's stablecoin regulatory policy is primarily based on the Markets in Crypto-Assets Regulation (MiCA), which was proposed in September 2020, approved at the EU meeting in April 2023, and will take effect on June 30, 2024, with full applicability by December 30, 2024.
In summary, MiCA categorizes stablecoins into Asset-Referenced Tokens (ART) and Electronic Money Tokens (EMT), where the former refers to stablecoins backed by a basket of assets, and the latter refers to stablecoins pegged 1:1 to fiat currencies. This means that algorithmic stablecoins, which lack physical backing and rely on market mechanisms to maintain value, are completely prohibited under MiCA. Furthermore, MiCA clarifies the issuance requirements for stablecoins, including institutional licensing, asset reserves, and information disclosure.
In fact, the formal implementation of MiCA has had a certain impact on the current stablecoin market. For instance, since USDT has not yet met the series of requirements set by MiCA, the well-known exchange Coinbase has decided to temporarily delist USDT in Europe, with a future decision to be made after reassessment. Meanwhile, stablecoins that meet MiCA requirements, such as EURC issued by Circle and EURCV issued by Société Générale, are more likely to be promoted and used.
However, MiCA has reserved an 18-month transition period. If stablecoins like USDT wish to continue developing in the European market, they must meet compliance requirements by June 30, 2026.
Singapore#
Singapore has a clear regulatory framework for stablecoins. In 2019, authorities passed the Payment Services Act, classifying stablecoins as digital payment tokens. In August 2023, regulatory regulations were finalized, requiring stablecoin issuers to obtain licenses from the Monetary Authority of Singapore (MAS) and to maintain 1:1 asset reserves, regularly disclose reserve status, and other requirements.
It is reported that the digital asset payment infrastructure StraitsX has received preliminary approval from MAS for a Singapore dollar stablecoin, XSGD, to be launched on Hedra. In November 2024, Paxos also announced a partnership with DBS Bank to launch a compliant Singapore stablecoin, Global Dollar (USDG).
Japan#
Japan's regulation of stablecoins is primarily based on the revised Payment Services Act (PSA) of June 2022, which officially came into effect in June 2023. It classifies fiat-backed stablecoins as electronic payment instruments (EPI) and limits stablecoin issuers to three types: banks, registered transfer agents, and trust companies. Additionally, entities must register as electronic payment instrument service providers (EPISP) and obtain relevant licenses to conduct stablecoin-related business in Japan.
Hong Kong, China#
According to the latest developments, the Hong Kong government has submitted the "Stablecoin Bill" to the Legislative Council for its first reading. If it passes three readings, it will be officially signed into law. The bill mainly involves licensing and requirements for stablecoin issuers, marketing restrictions, and broader consumer protection, such as requiring stablecoin issuers in Hong Kong to obtain licenses from the Hong Kong Monetary Authority (HKMA).
At the same time, the HKMA is also steadily advancing a sandbox program for stablecoin issuers, with institutions like JD Coin Chain Technology, Standard Chartered Bank (Hong Kong), and Anxin Group being among the first participants.
Overall, from the current attitudes of regulatory agencies towards stablecoins, there is a gradual shift from observation to active regulation. By managing and supervising details such as asset reserves and information disclosure of stablecoin issuers, the market environment can be further regulated, better protecting consumer interests and achieving financial stability, while the gradual compliance of stablecoins can greatly promote the healthy development of the overall crypto market.
What Are Compliant Stablecoins?#
Regulatory policies in various countries are still evolving, and more targeted regulations will be introduced in the future. According to incomplete statistics, the currently compliant stablecoins mainly include:
US Dollar Stablecoins#
USD Coin (USDC)
USDC is jointly issued by Coinbase and Circle. Coinbase places great emphasis on compliance and has obtained operational licenses from the SEC and FCA (Financial Conduct Authority in the UK), while Circle also holds multiple compliance licenses, including virtual currency licenses from New York and Louisiana, as well as relevant international licenses from Singapore, the UK, and Bermuda.
USDC is 100% backed by cash and high-quality liquid cash equivalent assets and can always be exchanged 1:1 for US dollars. Additionally, USDC is highly transparent, regularly undergoes independent audits, and publishes relevant reports. Currently, the circulating market capitalization of USDC has exceeded $45 billion, second only to USDT. USDC primarily circulates on the Ethereum network, accounting for 64.67%, followed by Solana and Base at 10.54% and 7.47%, respectively.
Binance Peg BUSD (BUSD)
BUSD is issued by the trust company Paxos, with brand support from the exchange Binance, and has received approval from NYDFS. BUSD is 1:1 backed by US dollars and is regularly audited and reported. It is important to note that Paxos has stopped issuing new BUSD tokens since February 2023, and users can exchange BUSD for US dollars or convert it to USDP. Currently, the circulating market capitalization of BUSD is approximately $300 million, with 98.73% circulating on BNBChain.
Global Dollar (USDG)
USDG is launched in collaboration between Paxos and DBS Bank, supported by 1:1 US dollar reserves, which include US dollar deposits, short-term US government bonds, and other cash equivalents. USDG received security approval from MAS in July 2024 and initially operates on the Ethereum network, with plans to issue on other blockchains approved by MAS in the future.
Lift Dollar (USDL)
USDL is issued by Paxos on the Ethereum network and is regulated by the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA). USDL reserves consist of cash and cash equivalents, and users can always redeem it at a 1:1 US dollar rate, with audit reports published monthly. Unlike other stablecoins, USDL is also a yield-bearing stablecoin, with the income generated from its cash and cash equivalent reserves distributed to all eligible holders. Currently, USDL's APY is 3.8%, and it is not applicable in the US, EU, Canada, and other regions.
Pax Dollar (USDP)
USDP is issued by Paxos and complies with NYDFS regulatory requirements. USDP can be exchanged 1:1 for US dollars, with reserves fully held in cash and cash equivalents, and audit reports are published periodically. Currently, USDP circulates only on the Ethereum and Solana networks, with a circulating market capitalization of approximately $93.12 million on Ethereum and about $450,000 on Solana.
PayPal USD (PYUSD)
PYUSD is issued in collaboration between Paxos and PayPal and is a stablecoin designed specifically for payments, meeting NYDFS regulatory requirements. PYUSD reserves are 100% held in the form of US dollar deposits, US Treasury bonds, and cash equivalents, supporting a 1:1 exchange for US dollars. Currently, PYUSD circulates on the Ethereum and Solana networks, with Ethereum being the primary network, having an issuance volume of approximately $353 million and a circulating market capitalization of about $169 million on Solana. Institutions and users need to buy, sell, hold, or transfer PayPal USD on PayPal, while developers can also use the Paxos API for purchases.
Gemini Dollar (GUSD)
GUSD is issued by Gemini Trust Company and has received approval from NYDFS. GUSD supports a 1:1 exchange for US dollars, fully backed by cash or cash equivalents held in bank accounts, money market funds, and US Treasury bills, with reserve proof published monthly by an independent CPA firm, BPM LLP. GUSD currently circulates only on the Ethereum network, with the latest data showing a circulating market capitalization of approximately $58.57 million, with 20,036 holding addresses, and the top 100 holding addresses cumulatively holding 89.45% of the total.
Euro Stablecoins#
EURC (EURC)
EURC is issued by Circle and is pegged 1:1 to the euro, compliant with MiCA standards. EURC adopts full reserves and publishes proof monthly.
EURC supports multiple blockchain networks. The latest data shows that EURC has a circulating market capitalization of approximately €85.89 million, primarily circulating on Ethereum, Solana, and Base networks, accounting for 34.83%, 33.34%, and 28.34%, respectively. Due to MiCA compliance requirements, EURC has also become the largest euro stablecoin by market capitalization.
EUR CoinVertible (EURCV)
EURCV is issued by Société Générale and has obtained an ACPR electronic money institution license, compliant with MiCA standards. EURCV is fully backed by cash deposits. EURCV currently circulates only on the Ethereum network, with a circulating market capitalization of approximately €39.86 million. However, the number of holding addresses for EURCV is only 37.
Eurite (EURI)
EURI is issued by Banking Circle S.A and has obtained authorization as a credit institution under the supervision of the Luxembourg Financial Supervisory Authority (CSSF), compliant with MiCA regulatory requirements. EURI is pegged 1:1 to the euro and fully backed by euro cash reserves, with regular audits. EURI is currently issued on the Ethereum and BNBChain networks, and users can exchange it for free.
Quantoz EURD (EURD) / Quantoz EURQ (EURQ)
EURD and EURQ are both issued by Quantoz Payments, a payment subsidiary of the Dutch blockchain company Quantoz, which has obtained an electronic money institution (EMI) license under the supervision of the Dutch Central Bank, compliant with MiCA requirements. EURD and EURQ support a 1:1 exchange for euros and are fully backed by fiat reserves and government bonds. Currently, EURD only supports the Algorand network, with a circulating market capitalization of approximately $940,000. EURQ is issued only on the Ethereum network, with a current circulating market capitalization of approximately $1.54 million.
Japanese Yen Stablecoins#
So far, there are no fully compliant Japanese yen stablecoins that can circulate domestically, as no company has completed EPISP registration. However, there are some Japanese yen stablecoin projects worth noting:
JPY Coin (JPYC)
JPYC is issued by the Japanese company JPYC Inc. and is currently classified as a prepaid payment instrument, not as a stablecoin. JPYC is always supported for a 1:1 exchange with the yen and is fully backed by yen reserves, allowing users to use it to redeem V-Preca gifts and other daily shopping items. It is reported that JPYC is applying for licenses for fund transfer services and electronic payment instrument exchange services. JPYC supports multiple blockchains, including Ethereum, Polygon, Gnosis, Shiden, Avalanche, and Astar. Data shows that JPYC's largest issuance is on Polygon, with a circulating market capitalization of approximately $13.35 million and 7,859 holding addresses. The second largest is on Ethereum, with a circulating market capitalization of approximately $620,000 and 395 holding addresses.
GMO Japanese Yen (GYEN)
GYEN is issued by GMO Trust, a subsidiary of the Japanese internet giant GMO Group, and complies with NYDFS regulatory requirements. It is important to note that GYEN does not meet Japanese regulatory requirements and cannot circulate domestically in Japan. GYEN is 100% backed by yen reserves and can be exchanged 1:1 for yen, with regular audits and reports published. GYEN supports multiple blockchains, with a total circulating market capitalization of approximately $9.5 million, primarily on the Ethereum network, accounting for 92.37%, followed by Stellar at 6.55%.
Compliant stablecoin projects are not limited to those mentioned above, but considering adoption rates and popularity, further elaboration is not provided here. Currently, although regulatory compliance for stablecoins is steadily advancing, the number of compliant projects among the top-ranking stablecoin projects by market capitalization remains relatively low, with stablecoins like USDT, USDe, DAI, and USDS needing more efforts in compliance.
Conclusion#
Compliance has always been one of the key development directions in the crypto industry. As the industry continues to expand, the ability to meet regulatory requirements largely determines a project's market acceptance and implementation level, and stablecoins are no exception.
Overall, the regulatory policies of various countries regarding stablecoins are being discussed in an orderly manner. Although the regulations that have been implemented propose relatively strict requirements, they provide tangible protections for consumer rights, which will be more conducive to the sustainable development of the industry and broader adoption. While waiting for more regulations to be introduced, users should remain vigilant about relevant regulatory dynamics and potential risks when using these stablecoins.