Written by: Cobo
Stablecoins are accelerating their establishment as an infrastructure in the digital financial system. As the circulation scale rises, major jurisdictions are also speeding up regulatory arrangements, attempting to seize dominance in the institutional reshaping. Although the US, Europe, and Hong Kong all emphasize “compliance first,” they have gradually diverged into three regulatory paradigms in terms of institutional design, market positioning, and technological integration. This differentiation not only concerns local financial governance logic but will also profoundly impact the evolution of the global stablecoin market and its institutional boundaries.
Core Comparative Analysis: Institutional Differences and Strategic Intent of Regulatory Pathways in Three Major Jurisdictions
Major judicial jurisdictions around the world are forming three typical strategies: the European Union is attempting to promote market unity and institutional integration through the MiCA framework; the United States is focusing on financial dominance by legislating to incorporate stablecoins into the federal financial infrastructure; while Hong Kong, China is advancing limited openness and tokenization experiments under prudent regulation. The following compares the core differences among the three in terms of regulatory concepts, institutional frameworks, and market goals.
European Union: Building a Unified Internal Market for Cryptocurrencies through Institutional Integration
The European Union has passed the Markets in Crypto-Assets Regulation (MiCA), attempting to bring the crypto asset market into the existing financial order with a unified regulatory framework across the entire European Economic Area. The MiCA framework is clear and covers a wide range, including all types of crypto assets (such as Electronic Money Tokens (ETMs), Asset-Referenced Tokens (ARTs)) and various types of Crypto Asset Service Providers (CASPs).
The EU license and access threshold adopts a “passport system”; once a company obtains MiCA licensing in any EU member state, its services can be accessed across the 30 countries of the European Economic Area (EEA), greatly promoting market unity.
This top-level design has rapidly advanced the market compliance process. As of now, preliminary statistics from industry experts indicate that over 50 institutions have obtained relevant licenses, establishing a regulated stablecoin ecosystem. However, the strict restrictions on reserves under MiCA (such as prohibiting interest payments and limiting the scope of investments) have also compressed profit models, raising concerns about sustainability among some institutions. Nevertheless, the unified market entry and institutional certainty still attract cross-industry participants like Coinbase and BBVA to accelerate their布局.
United States: Evolving from Regulatory Fragmentation to Federal Integration
The regulatory strategy for stablecoins in the United States is more geopolitically financially strategic. Proposals such as the “GENIUS Act” aim to incorporate stablecoins into the national clearing and payment system, giving them the role of “extending the dollar network.” Currently, regulation is jointly dominated by federal and state governments, with most stablecoin issuances still operating under state-level licenses. However, with the growth of stablecoin volumes, federal regulation is strengthening direct involvement with systemic issuers.
The proposed regulatory framework emphasizes the safety of reserves (such as 100% coverage by government bonds) and encourages large stablecoin issuers to apply for banking qualifications and a Master Account to access the Federal Reserve’s clearing network. The banking license applications by Circle and Ripple are examples of this exploration. Although this model does not allow stablecoins to pay interest, it is expected to create new profit paths based on credit, custody, and financial intermediation through integration with banking operations.
Hong Kong, China: Promoting limited openness and tokenization experiments under high thresholds.
Hong Kong, China adopts a prudent and pragmatic strategy for stablecoin regulation, emphasizing cautious advancement. Under the upcoming Stablecoin Regulation, which will take effect in August, the Monetary Authority expects to issue only a single-digit number of licenses initially, highlighting a “first establish, then break” institutional orientation. Hong Kong requires 100% high-quality reserves and prohibits the use of reserves for risk asset management, reinforcing the functional positioning of stablecoins as payment and settlement tools.
This highly secure system design compresses the traditional profit margins, but Hong Kong is promoting the application trials of stablecoins on real-world assets (RWA) through regulatory sandbox projects (such as Project Ensemble), including bonds, carbon credits, supply chain finance, and more. At the same time, Hong Kong’s role in the Renminbi stablecoin (CNHC) is also becoming increasingly clear, as it attempts to explore new paths for Renminbi internationalization through a dual-track mechanism of “offshore + on-chain issuance.”
Cross-domain influence: Shaping a new order in digital finance
As global regulatory clarity around stablecoins gradually emerges, the institutional boundaries and market roles of this asset class will be redefined. From a macro perspective, the divergence in compliance pathways not only reflects the differences in financial governance philosophies of various countries but also reshapes the competitive landscape, profit logic, and technological routes of stablecoins.
First of all, the clarification of regulation is transforming “compliance identity” itself into one of the most important market assets. Licenses not only represent permission for access but also determine whether institutions can connect to key clearing networks, obtain bank cooperation, attract institutional clients, and secure venture capital. Currently, there is a noticeable trend of concentration in the market: leading institutions with banking qualifications, compliance capabilities, and settlement capabilities are gaining an advantageous position, such as Circle and Ripple, which are actively applying for federal-level financial licenses to control the entire chain of rights for stablecoin issuance, custody, and circulation. The regulatory dividend has thus turned into a market threshold, also accelerating the exit of those without qualifications.
At the same time, increasingly stringent compliance requirements are forcing stablecoin projects to adjust their profit models. The traditional revenue structure that relies on interest rate spreads and reserve interest is now constrained by policies such as reserve composition restrictions and bans on paying interest. Under this pressure, the value logic of stablecoins is beginning to evolve towards “servitization”: their function is no longer solely as a currency substitute but is being embedded in more complex financial processes such as cross-border payments, asset custody, and on-chain settlement. Profit margins will increasingly come from surrounding services, on-chain asset portfolios (such as RWA), and improved operational efficiency. This type of transformation also reflects early signs of stablecoins evolving from “single products” to “platform capabilities.”
The clarification of regulations is driving the underlying technical architecture towards standardization. Taking infrastructure service providers like Cobo as an example, they are modularizing capabilities such as on-chain custody, clearing, risk control, capital inflow and outflow, KYC, and cross-chain interoperability, providing institutions with “plug-and-play” issuance and circulation components. These services not only lower the compliance entry barriers for stablecoin projects but also enable non-crypto-native enterprises (such as Web2 transformation companies) to quickly integrate relevant capabilities. Here, technical abstraction and compliance requirements achieve dynamic alignment: regulations define boundaries, and technology suppliers are responsible for translating them into executable interfaces, thereby enhancing the overall flexibility and stability of the system.
Looking at it more broadly, stablecoins are becoming a new battleground for global currency competition. The United States is promoting the integration of USD stablecoins into the federal clearing system through the GENIUS Act, strengthening its global settlement advantage; the European Union is using MiCA to create unified regulation, enhancing the strategic weight of the euro in the digital economy; China, on the other hand, is promoting the on-chain and cross-border application of RMB assets by combining the “domestic offshore” and “overseas offshore” dual-track structure of RMB stablecoins. These differentiated paths are guiding the stablecoin market to accelerate stratification along geographic and institutional dimensions, and may have lasting impacts on the monetary sovereignty of small countries, cross-border capital flows, and financial stability.
However, clear regulation does not automatically mean widespread adoption. Whether stablecoins have the potential for large-scale implementation still depends on whether they can achieve “usability” beyond “trustworthiness”. The complexity of technology, compliance burdens, and differences in preferences for settlement efficiency and consumer protection across regions create real barriers to actual deployment. Ultimately, how to simplify the user experience and lower the usage threshold without sacrificing regulatory standards will determine whether stablecoins can achieve mainstream status in daily payments and value storage. This is the final link that regulation and technology need to solve together.
