Written by: Cobo
Stablecoins are accelerating their establishment as the infrastructure of the digital financial system. As circulation scales rise, major legal domains are also accelerating their regulatory layouts in an attempt to seize dominance amid institutional reshaping. Although the U.S., 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 intentions of the regulatory paths in three legal domains
Major global jurisdictions are forming three typical strategies: the EU is attempting to promote market unification and institutional integration through the MiCA framework; the U.S. focuses on financial dominance, legislating to incorporate stablecoins into federal financial infrastructure; while Hong Kong is promoting limited opening and tokenization experiments under prudent regulation. The following compares the core differences among the three in regulatory concepts, institutional structures, and market objectives.
European Union: Building a unified crypto internal market through institutional unity
The European Union, through the (Markets in Crypto-assets Regulation) (MiCA), aims to integrate the entire European Economic Area under a unified regulatory framework, bringing the crypto asset market into the existing financial order. 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 crypto asset service providers (CASPs).
The EU adopts a 'passport system' for licenses and entry barriers, allowing a company that obtains MiCA permission in any EU member state to operate across all 30 countries in the European Economic Area (EEA), greatly facilitating market unification.
This top-level design has rapidly accelerated the compliance process in the market. As of now, preliminary statistics from industry experts show that more than 50 institutions have obtained relevant licenses, initially establishing a regulated stablecoin ecosystem. However, the strict restrictions on reserves under MiCA (such as prohibiting interest payments and limiting investment scope) have also compressed profit models, raising concerns about sustainability among some institutions. Despite this, a unified market entry and institutional certainty continue to attract cross-border participants like Coinbase and BBVA to accelerate their layout.
United States: Evolving from regulatory fragmentation to federal integration
The regulatory strategy for stablecoins in the United States has greater geopolitical financial strategic intentions. Proposals such as the (GENIUS Act) attempt to incorporate stablecoins into the national clearing and payment system, giving them the role of 'extension of the dollar network'. Current regulation is primarily led by both federal and state governments, with most stablecoin issuances still operating under state-level licenses. However, as the scale of stablecoins grows, federal regulation is strengthening its direct intervention with systemic issuers.
The proposed institutional framework emphasizes the safety of reserves (such as 100% government bond coverage) and encourages large stablecoin issuers to apply for banking qualifications and master accounts to access the Federal Reserve's clearing network. The bank license applications from Circle and Ripple are examples of this exploration. Although this model does not allow stablecoins to pay interest, it is expected to build new profit paths based on credit, custody, and financial intermediation through integration with banking operations.
Hong Kong: Promoting limited opening and tokenization experiments under high barriers
Hong Kong adopts a prudent and pragmatic strategy for stablecoin regulation, emphasizing cautious advancement. In the upcoming (Stablecoin Ordinance) to be effective in August, the Monetary Authority expects to issue only a single-digit number of licenses in the first batch, highlighting a 'first establish, then break' institutional orientation. Hong Kong requires 100% high-quality reserves, prohibits the use of reserves for risk asset management, and strengthens the functional positioning of stablecoins as payment and clearing tools.
This highly secure institutional design compresses traditional profit margins, but Hong Kong is promoting the application experiments of stablecoins on real-world assets (RWA) through regulatory sandbox projects (such as Project Ensemble), including bonds, carbon credits, and supply chain finance. At the same time, Hong Kong's role in renminbi stablecoins (CNHC) is becoming increasingly clear, as it seeks to explore new paths for renminbi internationalization through a dual-track mechanism of 'offshore + on-chain issuance'.
Cross-domain impact: Shaping a new order in digital finance
As global stablecoin regulation gradually becomes clearer, the institutional boundaries and market roles of this asset class will be redefined. From a macro perspective, the divergence of compliance paths not only reflects the differences in financial governance philosophies among countries but is also reshaping the competitive landscape, profit logic, and technical routes of stablecoins.
Firstly, the clarification of regulations is transforming the 'compliance identity' itself into one of the most important market assets. Licenses not only represent entry permissions but also determine whether institutions can access key clearing networks, obtain banking cooperation, attract institutional clients, and risk capital. Currently, a clear trend of concentration is emerging in the market: leading institutions with banking qualifications, compliance capabilities, and settlement abilities are gaining an advantage, with entities like Circle and Ripple actively applying for federal financial licenses to master the full chain of rights in stablecoin issuance, custody, and circulation. Regulatory dividends have thus become a market threshold, accelerating the exit of those without qualifications.
At the same time, increasingly strict compliance requirements are forcing stablecoin projects to adjust their profit models. The traditional revenue structures relying on interest margins and reserve interest are being constrained by reserve composition restrictions and interest payment prohibitions. Under this pressure, the value logic of stablecoins is beginning to evolve towards 'servitization': their function is no longer a simple currency substitute, but is integrated into more complex financial processes such as cross-border payments, asset custody, and on-chain clearing. Profit margins will increasingly come from peripheral services, on-chain asset combinations (such as RWA), and operational efficiency improvements. This transformation also reflects early signs of stablecoins evolving from a 'single product' to a 'platform capability'.
The clarification of regulations is also forcing the underlying technical architecture toward standardization. For example, infrastructure service providers like Cobo are modularizing capabilities such as on-chain custody, clearing, risk control, deposit and withdrawal, KYC, and cross-chain interoperability, providing institutions with 'plug-and-play' issuance and circulation components. These services not only lower the compliance barriers for stablecoin projects but also enable non-crypto native companies (such as Web2 transformation enterprises) to quickly embed relevant capabilities. Here, technical abstraction and compliance requirements achieve dynamic coordination: regulation defines boundaries, and technology suppliers are responsible for translating them into executable interfaces, thereby enhancing the overall flexibility and stability of the system.
From a broader perspective, stablecoins are becoming a new battleground for global currency competition. The United States promotes the integration of dollar stablecoins into the federal clearing system through the (GENIUS Act), strengthening its global settlement advantages; the European Union leverages MiCA to create unified regulation, enhancing the strategic weight of the euro in the digital economy; China combines the 'onshore offshore' and 'offshore offshore' dual-track structure of the renminbi stablecoin to promote the on-chain and cross-border application of renminbi assets. 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, regulatory clarity does not automatically imply widespread adoption. Whether stablecoins have the potential for large-scale implementation still depends on whether they can achieve 'usability' beyond 'trustworthiness'. Technical complexity, compliance burdens, and regional differences in settlement efficiency and consumer protection preferences pose practical barriers to actual deployment. Ultimately, how to simplify user experience and lower usage thresholds without sacrificing regulatory baselines will determine whether stablecoins can gain mainstream status in daily payments and value storage. This is the final link that regulation and technology need to solve together.
