US vs EU vs Asia:
Stablecoin Regulations

On July 18, 2025, U.S. President Donald Trump signed the GENIUS Act, marking a new phase in the global stablecoin regulatory competition. The U.S., European Union, and major Asian countries are fiercely competing for leadership in the digital currency market with differentiated regulatory strategies. This is becoming a pivotal turning point that determines financial hegemony in the 21st century, beyond just a regulatory contest.

The global stablecoin market is expected to reach approximately $200 billion by 2025, with U.S. dollar-based stablecoins making up over 90% of that. However, as the regulatory frameworks of various countries are implemented, changes to this landscape are anticipated. Which region's regulatory model will become the global standard?

1. United States: GENIUS Act and Dollar Hegemony Enhancement Strategy

Core Provisions of the GENIUS Act

The U.S. GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) recognizes stablecoins as fully institutional financial products while introducing a strict regulatory framework. This bill is the first federal cryptocurrency legislation in U.S. history, passing in the House with overwhelming support of 308 to 122 votes.

Key features include requirements for stablecoin issuers to maintain 100% reserves backed by liquid assets such as U.S. dollars and short-term treasury securities. A pre-approval system by federal or state regulatory agencies has been established, and supervisory powers of major agencies such as the OCC (Office of the Comptroller of the Currency) and the Federal Reserve have been reinforced. Notably, the law will be fully enforced after an 18-month grace period, with early enforcement applicable 120 days after enactment.

The most noteworthy aspect is a complete ban on the domestic circulation of unlicensed stablecoins after three years. This will also apply to stablecoins issued by foreign companies, which is expected to impose U.S. standards on the global stablecoin market. Moreover, non-backed algorithmic stablecoins have been completely banned, and anti-money laundering (AML) provisions have been significantly strengthened.

Intent to Strengthen Dollar Hegemony

U.S. Treasury Secretary Scott Vessenet has emphasized that stablecoins can serve as a means to enhance the global standing of the U.S. dollar. He has analyzed that U.S. dollar-pegged stablecoins could increase demand for U.S. treasury securities by up to $2 trillion. Currently, the dollar is the only reserve currency representing over 44.2% of global trade settlement currencies, and the intent is clear to extend this status into the digital realm through the GENIUS Act.

Advantages and Limitations of the U.S. Model

However, the limitations are also apparent. Excessively U.S.-centric regulations could provoke backlash from other countries and may hinder innovation. Particularly, the barriers to entry for small issuers may increase the concentration of the market.

The biggest advantage of the U.S. model is its perfect connectivity with the existing dollar system. Extending the dollar's status in the global financial system into the digital realm enhances network effects and liquidity acquisition. Furthermore, strict regulations can increase market credibility and facilitate institutional investor participation.

2. European Union: MiCA and Balanced Innovation Policy

Comprehensive Approach of MiCA

The **MiCA (Markets in Crypto-Assets Regulation)** of the European Union is the world's first comprehensive regulatory framework for virtual assets that will be fully implemented by December 30, 2024. MiCA differentiates itself from the U.S. by proposing an integrated regulatory system that encompasses not only stablecoins but all types of virtual assets.

MiCA classifies virtual assets into three categories: utility tokens, asset-referenced tokens (stablecoins), and e-money tokens, applying differentiated regulations. Stablecoin issuers must obtain a license within the EU, and must deposit at least 30% of reserves in banks located in the EU. This reflects the intention to regulate U.S. dollar-based stablecoins.

Notably, the CASP (Crypto Asset Service Provider) licensing system applies to all 27 EU member states, allowing businesses to operate in any member state once the license is obtained. This represents an innovative approach leveraging the advantages of the European single market.

Strict Implementation and Practical Difficulties

However, unexpected difficulties have emerged during the implementation of MiCA. Only about 50 companies across the EU have obtained the CASP license, with only 4 in Germany and 1 in France. Even the world's number one stablecoin, Tether (USDT), has failed to comply with MiCA, causing restrictions on its utilization in the European market.

A representative from a Spanish law firm stated, "Startups are facing significant challenges in obtaining licenses under the MiCA law, and it is difficult to hire enough compliance experts, while the rigorous requirements of MiCA distract from actual technology development and business efforts."

Philosophy and Characteristics of the European Model

MiCA features an emphasis on consumer protection, market integrity, and environmental impacts simultaneously. It includes provisions for mandatory energy usage disclosures during cryptocurrency mining, and clauses to prevent market manipulation and insider trading. This reflects the European Union's values of sustainability and social responsibility.

Additionally, MiCA seeks to balance innovation and regulation. While allowing experimentation with new technologies through regulatory sandboxes, it aims to protect consumers with strict guardrails. However, in practice, the complexity of regulation has resulted in side effects that suppress innovation.

3. Asia: Innovation Playground Amidst Diversity

Japan: A Benchmark for Leading Institutionalization

In June 2022, Japan became the first in the world to complete comprehensive institutional arrangements for stablecoins through the amendment of the Payment Services Act. The core of the Japanese model is defining stablecoins as **Electronic Payment Instruments**, thereby integrating them naturally into the existing financial system.

Japan classifies stablecoins into digital currency-type and crypto asset-type based on the method of value preservation. Digital currency-type stablecoins are backed by cash and cash-equivalent assets, with each token valued at 1 yen, classified as electronic payment instruments. In contrast, crypto asset-type stablecoins maintain their value through collateralized crypto assets according to algorithms, subject to existing crypto asset regulations.

The issuing entities are limited to banks, money transfer companies, and trust companies, each subject to different regulations. Banks can issue stablecoins based on deposits, money transfer companies can issue them based on claims to unsettled debts, and trust companies can issue them based on trust revenue rights. In all cases, maintaining 100% reserves is mandatory.

Regulation of intermediaries is also systematic. Once a license for electronic payment instrument transactions is obtained, it allows for transactions involving not only electronically issued instruments within Japan but also those issued abroad. However, foreign-issued stablecoins must meet stringent conditions.

The Japanese model's achievements are limited but significant. In April 2025, SBI VC Trade began handling USDC, and several money transfer service providers are considering issuing yen-pegged stablecoins. The existence of regulation itself acts as an important factor in alleviating entrepreneurs' uncertainties.

Singapore: Pragmatic Balance Seeking

In August 2023, Singapore announced a Single Currency Stablecoin (SCS) Regulatory Framework, showcasing a unique approach. The Monetary Authority of Singapore (MAS) defines stablecoins as "digital payment tokens designed to maintain a certain value against one or more specified currencies."

The Singapore model's characteristic is its pragmatic approach. Only stablecoins pegged to the Singapore dollar or G10 currencies are allowed, and issuers must meet specific requirements. Key requirements include asset management for value stability, maintaining a minimum of 100% reserves, and ensuring composition with stable and liquid assets.

The Director of MAS, Chia Tai Keong, stated, "Stablecoins have the characteristic of providing value stability and, if well-regulated, could become a widely used payment method." At the same time, MAS has expressed no immediate need to issue retail CBDCs, indicating that stablecoins are seen as a practical alternative to CBDCs.

Singapore has also introduced Extraterritorial Regulation, requiring businesses incorporated in Singapore to obtain licenses when conducting cryptocurrency-related operations abroad. This aims to prevent regulatory arbitrage and maintain consistent oversight.

South Korea: Digital Asset Basic Law and Won Stablecoin Strategy

South Korea is pushing for a comprehensive digital asset ecosystem through the Digital Asset Basic Law, proposed by Congressman Min Byung-deok in June 2025. This bill contains a vast content comprising 171 articles and 10 chapters, aiming for an integrated legislative framework covering the entire lifecycle of digital assets.

Most notably, it allows for the issuance of won stablecoins. Only companies with capital of over 500 million won can issue won stablecoins with approval from the Financial Services Commission. The initially discussed capital standard of 5 billion won has been significantly lowered to ease market entry barriers. Issuers are required to maintain over 100% reserves, and insolvency protection provisions have also been applied to enhance investor protection.

Establishing a Presidential Digital Asset Committee is also a key aspect. It will serve as a national control tower to deliberate and decide policies for fostering and promoting the digital asset industry, as well as market management and supervision. This aims to enable consistent policy execution by establishing an inter-agency cooperation system.

The regulatory framework differentiates between licensing, registration, and reporting systems to customize entry regulations. Asset-linked digital assets (stablecoins) are classified under the licensing system, while general digital assets fall under the reporting system. The establishment of the Korean Digital Asset Industry Association, a self-regulatory organization, aims to institutionalize the industry’s self-correction efforts, including provisions for punishing unfair trading and enhancing investor protection to secure market soundness.

Congressman Min Byung-deok emphasized, "This is not merely about enacting legislation, but a foundational institutional effort for our country to stand as a leading country in the global competition of the digital economy." Particularly noteworthy is its design to support the activation of won stablecoins from the perspective of monetary sovereignty.

4. Comparative Analysis of Three Regulatory Models

Differences in Regulatory Philosophy

The regulatory philosophies of the three regions are clearly distinguishable. The United States focuses on enhancing dollar hegemony. The GENIUS Act has a strategic intent to extend the global spread of dollar-based stablecoins into the digital realm of U.S. financial leadership. It aims to increase market credibility through strict regulations while clearly intending to set U.S. standards as the global norm.

Europe pursues a balanced innovation and protection approach. MiCA promotes technological innovation while incorporating consumer protection, environmental protection, social responsibility, and other European values into its regulations. The aim is also to reduce dependence on the U.S. dollar and secure financial autonomy for Europe.

Asia is characterized by a pragmatic approach. Japan values harmony with the existing financial system, while Singapore focuses on leveraging its position as a financial hub. South Korea is preparing to capture both monetary sovereignty protection and leadership in the digital economy.

Entry Barriers and Market Accessibility

In terms of entry barriers, the three regions adopt different strategies. The United States has set relatively high entry barriers. Due to requirements such as pre-approval from federal or state regulatory agencies, 100% reserve maintenance, and strict audits, the structure favors larger firms. However, once entered, there is access to the world's largest financial market.

Europe's MiCA theoretically sets reasonable entry barriers, but in practice, it operates as a higher barrier than expected due to complex compliance requirements and varying interpretations among the 27 member states. However, successfully entering allows access to the 500 million EU market.

Asia shows significant differences by country. Japan allows limited entry focused on existing financial institutions, while Singapore is relatively open but applies strict criteria. South Korea’s Digital Asset Basic Law sets a relatively low entry barrier of 500 million won to stimulate market activation.

Promoting Innovation vs. Securing Stability

The balance between promoting innovation and securing stability also varies by region. The United States tends to prioritize stability. It aims to secure market stability through a complete ban on algorithmic stablecoins and stringent reserve requirements. However, this may constrain experimentation with innovative stablecoin models.

Europe pursues a balance between innovation and stability but practically leans more towards stability. Side effects that suppress innovation have emerged due to complex regulatory systems and high compliance costs. However, the long-term goal is to establish a sustainable innovation ecosystem.

Asia displays a relatively pragmatic approach to innovation. Japan seeks stable innovation within the existing system while managing risks through limited participation from established financial institutions. Singapore allows active experimental innovation while applying strict criteria to maintain balance.

South Korea is finding a balance between the intent to innovate and caution. The relatively low entry barrier of the Digital Asset Basic Law (500 million won) and the establishment of a presidential committee can be seen as innovation-friendly elements. However, the limited use of regulatory sandboxes and the still-strong conservative approach among existing financial institutions indicate differences between policy intent and implementation processes.

5. Global Impact and Interaction

Regulatory Arbitrage and Shopping Phenomenon

Due to differing regulatory systems, the phenomenon of regulatory arbitrage is occurring. Companies are relocating their operations or establishing entities in regions with favorable regulatory environments. Tether's presence in Europe and Circle's strength are examples of this phenomenon.

An increasing number of companies are relocating to Singapore or other Asian countries to evade strict U.S. regulations, and cases of moving to the UK or Switzerland to avoid the complexities of Europe’s MiCA regulations are emerging. This poses a risk of weakening the regulatory effectiveness that each country intends to achieve.

If South Korea’s Digital Asset Basic Law provides a relatively low entry barrier and an innovation-friendly environment, it may rise as a new hub in the Asian region. However, the risk of being misused as a means of regulatory evasion also needs management.

Pressure for Standardization and Global Harmony

As the regulations in each region mature, the pressure for global standardization increases. The U.S. seeks to establish its standards as global ones, while Europe aims to spread MiCA to other regions. Asian countries are also working to demonstrate the effectiveness of their practical models.

International organizations are also exploring harmonization measures. The **FATF (Financial Action Task Force)** provides international standards related to virtual assets, and G20 and FSB (Financial Stability Board) are pursuing policy coordination on a global scale. However, the sharp clash of interests among countries makes it difficult to reach consensus.

Impact on Technological Innovation

Diverse regulatory environments also influence the direction of technological innovation. The U.S.’s strict reserve requirements are fostering the development of more efficient collateral management technologies. European environmentally-friendly regulations are expected to accelerate the development of energy-efficient blockchain technologies.

Various experiments in Asia are promoting the emergence of new stablecoin models. Japan's yen-pegged stablecoins, Singapore's multi-currency stablecoins, and South Korea's won stablecoins are all attempting different technological approaches.

Interoperability technology is also an important area of development. The need for technical standards that allow stablecoins issued under different regulatory systems to trade smoothly is increasing.

6. Future Prospects and Scenario Analysis

Scenario 1: U.S.-led Dollar Unification Scenario

The first scenario is one where the U.S. further strengthens dollar-based stablecoins' global dominance through the GENIUS Act. In this case, dollar stablecoins like USDC and USDT that comply with U.S. regulations are likely to become global standards. Stablecoins based on sovereign currencies from other countries will likely remain in niche markets or be limited to regional uses.

In this scenario, U.S. financial hegemony becomes stronger, but there is a risk of undermining other countries' monetary sovereignty. Especially, rising capital outflow pressures on emerging countries can be expected, along with an increased global impact of U.S. monetary policy.

Scenario 2: Multipolar Regional Block Scenario

The second scenario is where each region builds its own stablecoin ecosystems. The U.S. forms a dollar block, Europe forms a euro block, and Asia forms various national currency blocks, competing against one another. In this case, the complexity of cross-border payments increases, but the monetary sovereignty of each country can be protected.

If South Korea's won stablecoin succeeds, it could emerge as a new alternative in the Asian region, especially as the influence of the Korean Wave and the excellence of K-tech increase demand for won stablecoins in Southeast Asia.

Scenario 3: Global Standard Integration Scenario

The third scenario is the emergence of global level integrated standards through international organization mediation. IMF's SDR (Special Drawing Rights) based stablecoins or multinational central banks' joint CBDCs could be adopted as global standards. In this scenario, competition among countries' regulations may ease, but a complex international coordination process is likely required.

7. Success Factors of Each Country's Regulatory Model

Core Success Factors of the United States

The U.S. model's success hinges on the utilization of existing financial infrastructure. If it can extend the status of the dollar as a reserve currency, a developed capital market, and strong regulatory bodies into the digital realm, it could gain overwhelming advantages. Additionally, the network effects could significantly amplify first-mover advantages.

However, managing innovation suppression due to overly strict regulations and international backlash will be crucial. Particularly, how it responds to other countries' movements to issue sovereign currency-based stablecoins will be important.

Core Success Factors of Europe

The success of the European model depends on ensuring the effectiveness of regulations. It is necessary to resolve the complex compliance issues currently emerging and to establish practical, operable regulatory frameworks. Additionally, it is important to provide a consistent regulatory environment through policy coordination among the 27 member countries.

It will also be noteworthy how the European value-centered approach receives global responses. If combined with the ESG (Environmental, Social, Governance) trends, it could secure new competitiveness.

Core Success Factors of Asia

The success of Asian countries relies on differentiated innovation. They must provide new value by penetrating the niches left by the U.S. and Europe. It is important to develop unique models that leverage each country's strengths, such as Japan's stability, Singapore's efficiency, and South Korea's innovation.

In particular, if they can build a regional stablecoin ecosystem through cooperation within the Asian region, they could present an alternative model to the U.S. and Europe. Strategies linked to existing economic cooperation frameworks such as ASEAN+3 and RCEP are necessary.

8. Conclusion: The Direction of the Three-way Competition and Korea's Strategic Choice

Current State of Competition

As of 2025, the global stablecoin regulatory competition is in its early stages. The U.S. has made proactive moves with the GENIUS Act, but Europe’s MiCA is already in effect, and various Asian countries are pushing their own strategies. It remains uncertain which model will dominate.

However, several trends are clear. First, being a country that secures regulatory clarity is advantageous. Clear but strict regulations are more welcomed by businesses compared to an uncertain regulatory environment. Second, the connectivity with existing financial infrastructure is crucial. Models that harmoniously integrate with existing systems are more likely to succeed than completely new frameworks.

Strategic Opportunities for Korea

South Korea has a unique position in this three-way competition. While its market size is smaller compared to the U.S. or Europe, it has the opportunity to secure a first mover advantage based on its high technological level and rapid decision-making capability. Particularly, once the Digital Asset Basic Law is passed, it is expected to have the most comprehensive and innovative legislation in the Asian region.

The won stablecoin represents a unique opportunity for South Korea. Based on the influence of the Korean Wave, such as K-pop and K-dramas, interest in the won is increasing in Southeast Asia. Connecting this interest with stablecoins could secure new growth momentum.

Additionally, South Korea’s digital technology capabilities are among the world's best. If it can leverage its advantages in core technologies such as 5G, AI, and blockchain for building the stablecoin ecosystem, it can achieve technological differentiation.

Key Tasks for Success

To succeed in the global stablecoin competition, South Korea must address several key tasks. First, swift legislation is essential. Rapid passage of the Digital Asset Basic Law is needed to quickly establish a foundational institutional framework. Second, strengthening international cooperation is crucial. Building a regional stablecoin ecosystem through cooperation in Asia and actively participating in global standard-setting processes is necessary.

Third, there is a need for continuation of technological innovation. It must not just follow regulations, but be able to set new standards based on technological advantages. Fourth, enhancing risk management will be essential. It is important to find a balance between pushing for innovation while ensuring investor protection and financial stability.

Final Outlook

The three-way competition in global stablecoin regulation is expected to continue for a long time. In the short term, the U.S. dollar stablecoins are likely to maintain their dominance, but in the medium to long term, differentiated ecosystems will likely form by region. How South Korea strategically responds during this process will determine its position in the global digital economy.

The passage of the Digital Asset Basic Law in the latter half of the year will be a crucial turning point that could determine South Korea’s fate. If this opportunity is missed, South Korea risks falling behind in the global stablecoin competition forever. Conversely, if successfully pursued, it could seize the chance to leap to the hub of Asian digital finance.

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