Asia’s regulators are moving fast because Donald Trump, now sitting in the White House, just made US dollar-backed stablecoins a national focus.
The GENIUS Act, signed into law just two weeks ago, made clear that Washington is fully backing stablecoins that hold a 1:1 peg with the dollar.
Asian governments are watching closely as their own citizens pour billions into dollar-pegged stablecoins. Big players like JD.com and Ant Group are now applying to issue stablecoins of their own. Shares of Kakaopay jumped on speculation it might enter the space too.
Korean regulators fight over who controls stablecoin issuance
In South Korea, the tension is no longer quiet. President Lee Jae Myung’s ruling party proposed the Digital Asset Basic Act on June 10 to open a legal path for local firms to issue won-backed stablecoins. That proposal immediately set off alarms at the Bank of Korea.
Ryoo Sangdai, the bank’s senior deputy governor, warned that stablecoins could interfere with capital policies and slow down the push to internationalize the won. Two weeks later, Governor Rhee Chang Yong went even further, saying that non-bank stablecoins would bring back the same instability seen when private firms issued their own money in the 1800s.
John Park, head of Korea at the Arbitrum Foundation, said the concern isn’t just local. Stablecoins made in Asia could easily connect to global markets using decentralized platforms.
“Local stablecoins, while offering regulatory visibility at the point of issuance, carry the risk of becoming efficient bridges to global markets through seamless crypto-to-crypto swaps on decentralized exchanges,” Park told Bloomberg. Instead of blocking this, Park said Asia’s central banks should guide it. Build the rules, don’t fight the tide.
The numbers show why this matters. Right now, dollar-backed stablecoins make up $256 billion of the global market. Compare that with just $403 million worth of euro-pegged stablecoins. And that’s with Europe having a full rulebook already. So it’s not surprising that South Koreans traded over $41 billion worth of USDT, USDC, and USDS in just the first quarter of this year, based on Bank of Korea data.
Hong Kong pushes forward while China watches from the side
Hong Kong is going full speed. The Hong Kong Monetary Authority wants stablecoins to show real-world value, not just theoretical guardrails. Clara Chiu, founder of QReg Advisory, said that many of the firms applying to create yuan-backed stablecoins are already using the yuan in global payments.
The city is becoming the testing ground for what could be a much bigger play: crypto instruments tied directly to the Chinese currency.
China still has a public ban on crypto trading. But behind the curtain, there’s movement. In June, People’s Bank of China Governor Pan Gongsheng said stablecoins could have a place in global finance, especially at a time when cross-border payments are feeling the pressure of rising political tensions.
That single comment has already shifted the mood. A large, state-owned Chinese brokerage just got a license in Hong Kong to work with crypto. Chiu said it gave the industry “hope that there’s a way.”
But don’t expect Beijing to jump in with open arms. Lily King, the chief operating officer at crypto custodian Cobo, said Hong Kong will stay the sandbox. Chinese firms will use it to experiment, but the mainland will keep its doors shut. “China may not feel the need to open itself,” King said.
Crypto traders want more choices though. Yoann Turpin, co-founder of market maker Wintermute, said, “Capital controls are a challenge. But stablecoins could provide a vetted, more efficient on-chain system.”
The user base is already there. In South Korea, around 18 million people, over one-third of the entire population, are already involved in crypto. Sam Seo, chairman of the Kaia DLT Foundation, said a stablecoin backed by the won would serve different needs than US dollar ones.
“In the short term, swaps between the won and USDT will dominate. But longer term, we’ll need stablecoins from other countries to support direct pairings and faster settlement,” Seo said.
KEY Difference Wire: the secret tool crypto projects use to get guaranteed media coverage
