Hong Kong Tightens Stablecoin Rules, Mandating 100% Reserve Isolation US Senate Passes GENIUS Act, Requiring Stablecoins to be Pegged to Dollar IMF Warns of Systemic Risks from Stablecoins, Calls for Global Cooperation

Hong Kong has implemented stringent stablecoin regulations, requiring strict compliance with limited licenses and third-party custody. This move aims to foster innovation while addressing risk control. The new regulations mandate 100% reserve isolation and third-party custody to ensure the security of user assets. Major tech giants and traditional financial institutions are vying for licenses, with Hong Kong also exploring the potential of the Chinese yuan stablecoin. However, the stringent requirements may lead to market consolidation, excluding smaller institutions.

The United States is pushing for dollar dominance with a dual regulatory system for stablecoins. The US Senate’s passage of the “GENIUS Act” creates a dual-tier regulatory system, with the federal government regulating systemically important stablecoins and state-level regulators overseeing smaller issuers. The Act mandates that stablecoins be pegged to the US dollar and bans algorithmic stablecoins. US Treasury Secretary Janet Yellen stated that the purpose of this move is to consolidate the global position of the US dollar by requiring stablecoin reserves to invest in US Treasury bonds, thereby lowering national borrowing costs.

The International Monetary Fund (IMF) has warned of systemic risks from stablecoins, urging global regulatory cooperation to avoid market fragmentation and ensure financial stability. The IMF's concerns highlight the need for coordinated efforts to manage the risks associated with stablecoins, which have the potential to disrupt traditional financial systems.

As the global competition for crypto regulation intensifies, different regions are shaping the future of stablecoins in unique ways. The US and EU are taking contrasting approaches, with the US aiming to strengthen its financial position through stablecoins and the EU focusing on protecting the integrity of the euro. Hong Kong, meanwhile, is carving out a path for yuan internationalization, positioning itself as a global leader in regulatory compliance. The future of stablecoins is not just a story of financial tool evolution but also a key to reshaping the global financial power map.