Stablecoins Surge in Asia, Surpassing Visa and Mastercard in Transactions

Stablecoins are rapidly gaining traction across Asia as regulators and financial institutions increasingly embrace these blockchain-based assets. This trend was highlighted at Hong Kong’s Web3 Festival, where industry leaders discussed the growing momentum and regulatory developments in the region.

While the United States is moving toward its own regulatory frameworks, Asian markets are developing their own innovative approaches. Hong Kong, in particular, is at the forefront of this regulatory innovation. The global stablecoin market has surpassed $220 billion in value, with monthly transactions exceeding 700 billion USD. This volume has already surpassed traditional payment networks like Visa and Mastercard, indicating a significant shift in financial transactions.

JD.com, one of China’s largest e-commerce companies, has been a pioneer in stablecoin innovation. The company issued a Hong Kong dollar-based stablecoin in July 2024 and is leveraging its extensive foreign trade corridors for exports and imports. These stablecoins are being implemented in closed-loop systems as initial use cases, demonstrating the practical applications of this technology.

Currently, US dollar-backed tokens dominate approximately 99% of the market. However, there is growing interest in non-USD alternatives across the region. Rita Liu, CEO of RD Technologies, noted that a CNH-backed stablecoin could be very interesting under Hong Kong’s regulation. This would be particularly meaningful as China’s exports to emerging markets are increasingly priced in RMB.

Hong Kong is positioning itself as a stablecoin hub with its regulatory framework advancing rapidly. Legislative Council Member Duncan Chiu stated that the territory’s stablecoin bill is expected to pass in May, with issuance possible in the second half of this year. This regulatory clarity is crucial for the adoption and integration of stablecoins into mainstream financial systems.

Standard Chartered’s Head of Digital Asset & FinTech Hong Kong, Dominic James Maffei, believes that combining USD stablecoins with high-quality regulated local currency stablecoins will create powerful market dynamics. He pointed to Japan’s “Project Pax” as an example of successful implementation, where the country’s three major banks have jointly developed a cross-border payment system using stablecoins. This model could be emulated and improved upon by Hong Kong.

Multi-currency solutions are gaining ground, with platforms like Arbitrum seeing increased adoption of stablecoins beyond USD. Ryan De Souza, Partnerships Lead at Arbitrum, highlighted that his platform is onboarding different currency stablecoins, including Mexican fintech Bitso’s MXN stablecoin and Singapore-based issuers’ Singapore dollar stablecoins. This diversification is crucial for the global adoption of stablecoins.

Traditional financial institutions are rapidly entering the stablecoin ecosystem. Hashkey Exchange Co-CEO Ru Haiyang noted that major banks, including Bank of America, BNY Mellon, Standard Chartered, Brazil’s Itaú, and Japan’s Sumitomo Mitsui Bank, are exploring stablecoin initiatives. Haiyang predicted that the swap between stablecoins and fiat currencies will become as easy as doing foreign exchange, making stablecoins a mainstream tool for international transactions.

The driving forces behind the adoption of stablecoins are efficiency and cost advantages. Traditional remittances require five working days and average 6.3% in fees globally, while blockchain stablecoin payments can complete transactions within an hour at significantly lower costs. Circle’s Vice President Yam Ki Chan emphasized the technological superiority of stablecoins, stating that they offer capabilities that non-blockchain based digital money cannot match.

Industry experts anticipate that stablecoins will continue to expand beyond crypto trading into mainstream financial applications. Asia is expected to play a significant role in this evolution as regulatory clarity emerges across the region. The growing adoption and integration of stablecoins in Asia highlight the region’s potential to lead the global financial landscape in the coming years.