Stablecoin Regulation in 2025: Who’s Doing it Best? Experts Weigh In

Without a doubt, stablecoins have become the cryptocurrency of 2025. According to data published on DefiLlama, the total market capitalization of this asset class has surged by over 89% since the start of the year, surpassing $248.4 billion as of the start of June 2025.

One of the largest cryptocurrency conferences in the United States, Bitcoin 2025, which took place from May 27 to 29 in Las Vegas, was also dominated by discussions about stablecoins.

Vice President JD Vance endorsed the topic in an opening keynote speech, stating that the current US administration does “not think that stablecoins threaten the integrity of the United States dollar; quite the opposite”.

The rising popularity of stablecoins, possibly attributed to their unique ability to combine the speed and programmability of digital assets with the price and stability of traditional currencies, has led to a number of countries enforcing stablecoin legislation. So, who is doing it best?

Table of Contents Table of Contents

1. Key Takeaways
2. What Stablecoin Regulation Looks Like in the US, EU & Asia
3. Asia & Europe Are Leading Stablecoin Regulation
4. Stablecoins Without Borders: The Cross-Jurisdiction Challenge
5. Are Stablecoin Regulations Built to Last
6. FAQs
7. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What Stablecoin Regulation Looks Like in the US, EU & Asia
3. Asia & Europe Are Leading Stablecoin Regulation
Show Full Guide
4. Stablecoins Without Borders: The Cross-Jurisdiction Challenge
5. Are Stablecoin Regulations Built to Last
6. FAQs
7. References

What Stablecoin Regulation Looks Like in the US, EU & Asia

The current US administration does not shy away from showing its support for the cryptocurrency industry.

In mid-May 2025, the Senate voted 66-22 in favor of the GENIUS Act 2025, a bill that aims to regulate payment stablecoins and other cryptocurrencies.

Similarly, the US also reintroduced the STABLE Act earlier this year, which focuses on enhancing oversight of stablecoin issuers by requiring them to obtain banking charters and comply with stricter regulatory standards.

The Hong Kong Monetary Authority was another jurisdiction that introduced stablecoin regulation earlier in May 2025. Hong Kong’s Stablecoins Bill requires issuers of fiat-referenced stablecoins (FRS) to obtain a license from the Monetary Authority and meet standards around reserve management, redemption at par, asset segregation, and anti-money laundering.

Other stablecoin laws that have received significant praise over the years include Singapore’s stablecoin regulatory framework, which was introduced in 2023, and set clear requirements around reserve assets, redemption rights, and capital requirements.

Similarly, the European Union’s Markets in Crypto-Assets (MiCA) regulation, which came into effect in 2024, introduced a licensing regime for stablecoin issuers across member states.

Asia & Europe Are Leading Stablecoin Regulation

According to experts, Asia and Europe continue to lead the stablecoin regulation race with some of the clearest stablecoin rules.

Sid Sridhar, the founder and CEO of Bima, the decentralized finance (DeFi) ecosystem focused on Bitcoin-backed stablecoins and yield strategies, told Techopedia:

“MiCA sets clear requirements around reserves, transparency, and KYC/AML compliance, and it’s quickly becoming a global benchmark for regulators and builders. Hong Kong’s Stablecoin Ordinance… is just as strong. It requires licensing for all issuers, including those offering HKD-pegged coins from abroad. Issuers also need to maintain full reserves and keep customer funds in segregated custody.”

Sid Powell, the co-founder and CEO of Maple Finance, added that Singapore’s stablecoin legislation is also standing at the top as one of the more “advanced” regulatory frameworks.

He noted that the country has been “strong in terms of licensing and clarity for digital payment tokens,” giving operators more flexibility.

On the other hand, experts unanimously agree that while the US has made improvements with the GENIUS Act, the bill is still operating in a gray area.

Hon Ng, Bitget’s chief legal officer, explained:

“The US GENIUS Act features strong core provisions but needs resolution on interagency conflicts and alignment with other new Acts, including the new STABLE Act. This ambiguity means that exchanges operating in the US must prepare for competing frameworks leading to higher legal costs and delayed integration.”

Maple Finance’s Powell added that the GENIUS Act is still a proposal, unlike the MiCA stablecoin regulation in Europe, for example, and getting something from a proposal to law in the United States can take a significant amount of time.

He said:

“MiCA is already in motion, and even though it has operational challenges, it gives issuers something to work with today. Hong Kong’s new law is interesting because it’s trying to attract Web3 capital while still signaling to banks that the space will be supervised.

If the US can’t move quicker, it risks losing issuers and infrastructure builders to these more agile jurisdictions.”

Stablecoins Without Borders: The Cross-Jurisdiction Challenge

One of the biggest perks that stablecoins offer is their ability to conduct cheap and quick cross-border transactions, making them an increasingly attractive tool for international payments and remittances.

Unfortunately, most current stablecoin regulations only focus on specific jurisdictions and have yet to fully address the cross-border nature of stablecoin usage.

Kevin He, the co-founder of Bitlayer, explained:

“MiCA includes some provisions for passporting across EU states, but global coordination is limited. This gap creates regulatory arbitrage and compliance challenges, especially for stablecoins issued in one country but used across multiple jurisdictions without unified oversight.”

Bima’s Sridhar added that the United States’ GENIUS Act is “in a more fragmented spot.” According to Sridhar, while the GENIUS Act tries to promote bilateral agreements to improve cross-border compatibility, it does not effectively regulate foreign issuers. This means that non-compliant stablecoins can circulate freely, while US-based issuers face stricter rules.

“On top of that, US accounting treatment of stablecoins remains a major hurdle. Because they don’t qualify as cash or cash equivalents under GAAP [Generally Accepted Accounting Principles], companies are forced to treat them as financial assets, complicating their use in corporate and institutional settings,” he added.

Are Stablecoin Regulations Built to Last

One of the most popular ideas in web3 is that the blockchain industry is one of the fastest-moving and most innovative sectors in tech. As new use cases, financial primitives, and token models continue to emerge, there’s growing concern that even the most forward-thinking regulations risk becoming quickly outdated.

According to Maple Finance’s Powell, most stablecoin regulations are designed around traditional models of finance that assume a single issuer, a reserve in a bank, and a clear corporate structure. He told Techopedia:

“But that’s not how DeFi works. We’re seeing algorithmic and collateralized models evolve, as well as on-chain governance playing a role in how stablecoins function. If the laws don’t evolve to account for that complexity, they’ll either exclude those models or force innovation into regulatory gray zones. Regulation shouldn’t freeze the industry in place. It should give it room to grow responsibly.”

A prominent example is how MiCA bans algorithmic stablecoins, an aftereffect following the collapse of the Terra UST in 2022. And while such harsh regulation might reduce certain risks, it also limits innovation, Bima’s Sridhar said.

“In the US, the GENIUS Act focuses almost entirely on fiat-backed stablecoins. It overlooks crypto-collateralized or hybrid models that are becoming more common in DeFi. Some interpretations even exclude money market funds from qualifying as reserve assets, which could make it harder for issuers to adapt as new financial tools emerge,” he added.

The Bottom Line

While 2025 has undoubtedly become the year of stablecoins, global regulatory bodies are still playing catch-up. The clearest and most functional frameworks, like MiCA in Europe, Hong Kong’s Stablecoin Bill, and Singapore’s 2023 guidance, offer immediate compliance pathways for issuers.

But even these laws are built around relatively traditional financial systems. US stablecoin regulation, while progressing through proposals like the GENIUS and STABLE Acts, still faces fragmentation and uncertainty that may hinder broader adoption.

To stay ahead, experts suggest that regulators move toward more flexible, principles-based frameworks that can accommodate all types of stablecoins. Tools such as blockchain analytics for real-time monitoring and compliance could be a big help. While technologies like on-chain KYC and zero-knowledge proofs could help meet regulatory goals without sacrificing decentralization.

FAQs