The crypto world dominated by US dollar stablecoins is quietly being disrupted, as the different paths taken by Asia’s three powerhouses reflect a deeper contest in financial digitalization. Asia’s three major financial centers are embracing the stablecoin era with their own distinct strategies.
On October 27, inside the Tokyo Stock Exchange, Noriyoshi Okabe, President of Japanese fintech company JPYC Inc., announced the launch of Japan’s first compliant yen stablecoin, JPYC, calling it “an important milestone in the history of Japanese currency.”
Meanwhile, the licensing team at the Hong Kong Monetary Authority is reviewing the first batch of applications for the “Stablecoin Ordinance” page by page, while officials from the Monetary Authority of Singapore are hosting closed-door meetings to discuss the results of cross-border stablecoin settlement under “Project Guardian.”
I. Three Faces: Three Paths for Asian Stablecoins
The Asian stablecoin market is showing three distinctly different development models. Japan, Hong Kong, and Singapore have each chosen unique paths based on their own financial environments and strategic considerations.
Japan has adopted a “regulatory sprint” strategy
● In 2023, the Japanese Diet passed an amendment to the Payment Services Act, officially including stablecoins as “electronic payment instruments.” The law requires issuers to obtain a funds transfer service license, fully collateralize reserve assets in cash or government bonds, and undergo review by the Financial Services Agency.
● The launch of JPYC is the first successful case under this regulatory framework. The stablecoin is backed by bank deposits and government bonds, maintaining a 1:1 peg with the yen.
● It is worth noting that JPYC is not the only player in the Japanese market. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation, and Mizuho Bank plan to jointly issue enterprise-focused stablecoins via MUFG’s Progmat platform.
Hong Kong demonstrates a “regulatory experiment” approach
● On May 21, 2025, Hong Kong’s “Stablecoin Ordinance Bill” was passed by the Legislative Council and will officially take effect on August 1. The ordinance establishes a licensing regime for fiat stablecoin issuers, requiring them to apply for a license from the Monetary Authority.
● Eddie Yue, Chief Executive of the HKMA, made it clear that only a small number of licenses will be issued in the first phase, with strict requirements for applicants.
Singapore has chosen a “technological rationality” path
● In August 2024, the Monetary Authority of Singapore released the “Stablecoin Regulatory Framework,” which stipulates that only stablecoins pegged to a single fiat currency are eligible for licensing.
● Circle and Paxos have become the first batch of globally approved issuers, launching USDC-SGD and Paxos SGD, both pegged to the Singapore dollar, with a combined circulation exceeding 500 million SGD.
II. Market Landscape: From Domestic Payments to Cross-Border Settlement
The application scenarios for stablecoins are rapidly expanding, extending from their initial use in crypto trading to broader financial fields such as cross-border payments and trade settlement.
● Noriyoshi Okabe, President of JPYC, revealed that seven companies plan to integrate with this product. The company has also launched a dedicated platform for issuing and redeeming tokens—JPYC EX—which strictly adheres to the Act on Prevention of Transfer of Criminal Proceeds for identity and transaction verification. Users can deposit yen via bank transfer to obtain JPYC or withdraw yen back to their accounts. In the long term, JPYC ambitiously aims to reach an issuance balance of 10 trillion yen within three years.
● In Hong Kong, the stablecoin regime is synergized with RWA development. In the “Digital Asset Settlement Channel Program” promoted by the Hong Kong Stock Exchange, compliant stablecoins are designed as clearing media for tokenized assets. This regulatory linkage helps build a complete digital asset ecosystem.
● Singapore’s “Project Guardian,” led by MAS in collaboration with DBS Bank, Standard Chartered, Temasek Holdings, and JPMorgan, jointly explores tokenized asset clearing and cross-border payments.
The latest phase of the project focused on testing the feasibility of Singapore dollar-pegged stablecoins in spot FX settlement, with results showing that transaction settlement time was reduced from the traditional SWIFT model’s two days to just a few seconds.
III. Regulatory Challenges: Walking a Tightrope Between Innovation and Risk
Asian economies all face the challenge of balancing innovation and risk in promoting stablecoin development, with their respective regulatory frameworks showing significant differences.
The table below compares the regulatory features of stablecoins in Japan, Hong Kong, and Singapore:
Regulatory Aspect | Japan | Hong Kong | Singapore |
Legal Basis | Payment Services Act Amendment | Stablecoin Ordinance | Stablecoin Regulatory Framework |
Reserve Requirements | Fully collateralized in cash or government bonds | 100% high-quality liquid assets | Same-currency cash or short-term government bonds |
Licensing Regime | Funds transfer service license | Monetary Authority licensing | Single fiat stablecoin license |
Cross-Border Considerations | Pilot interoperability with Singapore and Hong Kong | Technical compatibility with ASEAN markets | Mutual recognition of cross-border stablecoin standards |
The Hong Kong Monetary Authority has made it clear that regulatory standards for risk management by stablecoin issuers are extremely high, with anti-money laundering and anti-terrorist financing requirements almost on par with those for banks or e-wallet institutions.
Eddie Yue emphasized, “Stablecoins are not ‘concept-driven’—they must address real pain points in financial or economic activities.”
● Japan’s challenges are mainly technical and social acceptance. The cash culture remains deeply rooted in Japanese society. According to the Ministry of Internal Affairs and Communications in 2024, Japan’s cashless payment ratio is only 43%, significantly lower than China’s 86% and South Korea’s 77%. In addition, enterprises still have concerns about the security and cost controllability of blockchain systems.
● Hong Kong faces unique political and economic balancing challenges. According to reports, the People’s Bank of China and the Cyberspace Administration of China instructed Ant Group, JD.com, and other companies to suspend their stablecoin issuance plans in Hong Kong. This intervention reflects the central government’s deep concern over “private minting rights” and its protection of the digital RMB’s strategic position.
IV. Regional Competition and Integration Coexist
Looking ahead, the development of stablecoins in Asia will feature both regional competition and integration, evolving along several main lines over the next three to five years.
● Mutual regulatory recognition will become a focus of regional cooperation. Japan and Singapore may achieve standard interoperability through bilateral regulatory sandboxes, while Hong Kong will attempt to use the HKD stablecoin as a regional settlement medium and establish a technical compatibility framework with ASEAN markets.
● At the same time, the trend of functional convergence between CBDCs and stablecoins is becoming increasingly apparent. Stablecoins are becoming a “technical buffer layer” for central banks exploring cross-border payments. The Bank of Japan, MAS, and the Hong Kong Monetary Authority are all studying how to achieve on-chain interoperability between CBDCs and stablecoins.
● In addition, application deepening driven by RWA cannot be ignored. Stablecoins will become settlement tools for tokenized bonds, carbon credits, supply chain receivables, and other assets, promoting the integration of the real economy and blockchain finance.
From a global perspective, the Bank for International Settlements’ 2025 annual report points out that the annual trading volume of the Asian stablecoin market has reached 2.4 trillion USD, with a growth rate more than twice the global average. US dollar stablecoins still account for 99% of the global market, but as the institutionalization of yen, HKD, and SGD stablecoins advances, Asia’s weight in the global settlement network is rising significantly.
Below is a comparison of the main driving forces behind stablecoin development in Asia:
Development Driver | Japan | Hong Kong | Singapore |
Main Driver | Legislative support | Regulatory experimentation | Technological rationality |
Key Advantage | Regulation first | International alignment | Infrastructure |
Application Focus | Domestic payments and trade settlement | Digital assets and cross-border finance | Cross-border payments and fintech |
Regional Ambition | Expand yen settlement influence | Institutional intermediary role | Regional financial data and settlement hub |
Industry experts believe that Japan “is likely to become an institutional leader thanks to its first-mover advantage and the momentum of its banking consortium,” while Singapore is expected to “continue to be an innovation center thanks to its infrastructure and regulatory transparency that attract global participants.” As for Hong Kong, it is “carving out its own position in enterprise-centric applications, where compliance is paramount.”
