Stablecoins are regulated in different ways around the world, raising concerns about their viability and potentially creating barriers for new entrants.
The European crypto asset market (MiCA) framework significantly differs from the U.S. GENIUS Act. Both are distinct from Hong Kong's own stablecoin regulations, which were finalized just two weeks ago.
These three regulatory frameworks provide clear standards for stablecoins. Reserve requirements, issuer licensing, and licensing schemes now have explicit conditions, undoubtedly making it easier for stablecoins to thrive.
However, the differences among them are concerning. According to Krishna Subramanyan, CEO of banking liaison company Bruc Bond, stablecoins currently "face the risk of becoming jurisdictionally bound, with limited availability and trust outside specific regions."
MiCA, GENIUS, and Hong Kong's Stablecoin Regulations offer different models for regulating stablecoins.
Udaibir Saran Das, a member of the Bretton Woods Committee and a visiting professor at the National Economic Research Council, explained their differences to Cointelegraph. Essentially:
MiCA allows non-bank issuers to operate under the supervision of the European Banking Authority.
GENIUS grants stablecoin issuance rights to banks and federally licensed entities.
Hong Kong requires licensing from the Hong Kong Monetary Authority (HKMA) and imposes strict eligibility requirements.
These legal divergences mean that "issuers must establish parallel compliance structures for each jurisdiction. This includes independent legal entities, audits, and governance models, increasing costs and operational friction," Das explained.
"Operational friction arises from different reserve requirements, custody arrangements, and Hong Kong's holder-level Know Your Customer (KYC) requirements, forcing wallet providers to rebuild their infrastructure. These frameworks represent competitive models of currency control," he said.
All these legal entities and reporting systems are costly, and smaller stablecoin companies will find it more challenging to bear compliance costs, especially if they operate in multiple regions. This could push smaller players out of the market or force them to become part of larger acquisition deals.
According to Subramanyan, this "compliance asymmetry" could concentrate market power and limit innovation. She stated, "Over time, regulatory divergence will not only increase costs but will also define who can scale and who cannot."
Das noted that without mutual recognition of different stablecoin laws, the operational complexity of meeting multiple requirements—including multiple licensing processes, parallel audits, and decentralized technology—favors large, well-capitalized stablecoin issuers.
"The pressure for consolidation may be intentional," he said.
Much of the discourse around cryptocurrency regulation, whether concerning stablecoins, market framework laws, or Bitcoin (BTC) reserves, revolves around making any jurisdiction or country as competitive as possible.
As the cryptocurrency industry in different countries competes for dominance, Subramanyan said, "In the short term, competitive divergence may persist. Jurisdictions will position stablecoin regulation as a lever of economic diplomacy, seeking to attract capital, talent, and technological leadership."
She mentioned that regions like Hong Kong, the UAE, and Singapore have stablecoin frameworks that stimulate adoption, but in practice, they have unique licensing requirements in their respective jurisdictions, "providing much-needed initial protection for their citizens."
As stablecoin adoption grows, all of this could change, as predicted by prominent cryptocurrency executives like Ripple CEO Brad Garlinghouse. Subramanyan stated that as stablecoins become increasingly intertwined with payments, credit markets, and capital flows, "risks will drive convergence."
She continued, "As cross-border transaction volumes increase, regulatory gaps will begin to create real economic externalities, and the pressure for coordination will rise."
Coordinating on these issues is challenging but possible. Subramanyan said that coordinating stablecoin laws across multiple countries "requires a cooperative operational framework."
Major banks and financial institutions like the Financial Stability Board, the Bank for International Settlements, and the G20 "are fully capable of defining benchmark standards for reserves, disclosures, and risk mitigation."
Das stated that establishing a regulatory academy with shared anti-money laundering protocols for cross-border stablecoins is "complex but necessary."
"Without coordination, regulatory arbitrage will become the dominant business model," he said.
If regulation is both necessary and possible, the question remains which regulatory system will serve as a model for further regulation and cooperation.
Das mentioned that GENIUS will not overturn existing laws but "will shape global standards through market weight." The regulatory model of the bill—where the Office of the Comptroller of the Currency regulates non-bank stablecoin issuers, while existing regulatory agencies cover banks issuing stablecoins—serves as a template that other countries can replicate.
Subramanyan added, "GENIUS may influence regulatory thinking through its structured approach to reserves, redemption rights, and issuer accountability. Doing so will help shape global expectations and inform cross-border compatibility decisions."
Banks and payment systems also tend to choose the highest standards for cross-border business, which means that Hong Kong's "conservative approach may set global norms, despite the limited number of licenses issued," Das said.
Major financial centers have the potential to reach a consensus on stablecoin regulation, but this is unlikely to happen in the short term. Meanwhile, as stablecoin issuers face new regulations and consolidate, smaller players may be pushed out.
Related: U.S. banking groups call for closing "loophole" in stablecoin earnings under the GENIUS Act
Original article: Stablecoin laws are not aligned—big fish benefit
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
