This LawFlash compares the regulatory requirements (as currently proposed or established) on single fiat-backed stablecoin issuers in the United Kingdom, European Union, Hong Kong, and the United States.
As fiat-backed stablecoins increasingly gain traction as a means of payment, especially for cross-border payments, legislators and regulators around the world have been moving to establish regulatory frameworks to govern their issuance, distribution, and use. With the European Union’s stablecoin regulatory regime already in full force, the United States, the United Kingdom, and Hong Kong are moving swiftly to also establish stablecoin regulatory regimes. While the frameworks (as proposed or established) in these jurisdictions share a common goal of protecting consumers and maintaining financial stability, their approaches reflect distinct policy priorities and regulatory architectures.
Refer to the table linked below for a breakdown of these regulatory requirements.
Of the jurisdictions compared, the European Union is the furthest ahead, with its Markets in Crypto-assets Regulation (MiCA) having been in force since June 29, 2023 and taking full application in December 2024. This framework is widely considered one of the most comprehensive frameworks currently in place for cryptoassets.
Reflecting a growing regulatory divergence from the EU—and underscoring its ambition to become a global hub for digital assets and foster financial innovation—the United Kingdom is making rapid progress in developing a regulatory framework for cryptoassets. HM Treasury published a near-final draft statutory instrument on April 29, 2025 that would bring in new cryptoasset-related activities (including the issuance of fiat-backed stablecoins) into the UK regulatory perimeter, and the UK Financial Conduct Authority (FCA) released a consultation paper on May 28, 2025 on its proposed rules for stablecoin issuance and cryptoasset custody (CP25/14).
Across the pond, the US House of Representatives and Senate are advancing legislation to bring stablecoins into the US financial system, seeking to establish federal and state oversight, accounting requirements, and rulemaking and reporting obligations by federal agencies. The Senate bill, the GENIUS Act of 2025: Guiding and Establishing National Innovation for US Stablecoins Act of 2025 (GENIUS Bill), has been identified by legislative leaders as the primary legislation.
In Hong Kong, the Stablecoins Bill was passed on May 21, 2025 and the Stablecoins Ordinance will take effect on August 1, 2025, with an emphasis on fiat-referenced tokens tied to the Hong Kong dollar (HKD). In tandem, the Hong Kong Monetary Authority (HKMA) is consulting on guidelines on the supervision of licensed stablecoin issuers and guidelines on Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) for licensed stablecoin issuers.
Key Similarities and Differences
Despite the key differences between the regulatory environments of these jurisdictions and their policies, the US, UK, EU, and Hong Kong are becoming aligned on certain core principles governing single fiat-backed stablecoins. The Financial Stability Board’s high-level recommendations on regulating global stablecoin arrangements played a key role in driving this regulatory convergence.
Common themes include, for instance, (1) requiring fiat-backed stablecoin issuers to be authorized and subject to regulatory supervision to maintain adequate consumer protection and market stability, (2) requiring a full 1:1 reserve backing with liquid assets, (3) an emphasis on the safeguarding of backing assets, (4) guaranteeing par-value redemption rights to stablecoin holders, and (5) prohibiting the granting of interest to stablecoin holders.
While there is broad alignment on core protectionist principles, key areas of divergence among the EU, UK, Hong Kong, and US stablecoin regimes lie in their territorial reach, the types of fiat-backed stablecoins within scope, how backing assets are to be safeguarded, and the types of assets permitted to back the stablecoins.
The EU’s MiCA regime has a broad extraterritorial scope, capturing any single fiat-backed stablecoin (termed “e-money tokens”) offered to EU residents or traded within the EU, regardless of the issuer’s location, and limits issuance to EU-regulated credit or e-money institutions. By contrast, issuers of fiat-backed stablecoins would only be within scope of the UK-proposed regime if they are established in the UK. While the Hong Kong regime would apply to fiat-backed stablecoins with reference to any official currencies issued in Hong Kong, it also covers fiat-backed stablecoins with reference to HKD issued outside Hong Kong.
It is proposed under the US GENIUS Bill for fiat-backed stablecoins used within the US to be regulated and for both federal and state-level authorization to be allowed, making it the most pluralistic in terms of regulators.
The table linked below sets out a high-level comparison of certain rules (as proposed or established) for single fiat-back stablecoin issuers in each of these jurisdictions.
Comparison of certain rules (as proposed or established) for fiat-back stablecoin issuers >>
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