Once hailed as the bridge between traditional finance and the digital asset world, stablecoins are now squarely in the regulatory crosshairs. As adoption grows, so does global concern over transparency, reserve backing, and systemic risk. A wave of regulatory change is already in motion, threatening to reshape the landscape for issuers, users, and platforms alike.
MiCA Sets the Tone in Europe
The EU’s Markets in Crypto-Assets (MiCA) regulation, which came into force in 2024, is among the first comprehensive frameworks targeting stablecoins. It set strict rules on reserve management, disclosure, and transaction limits especially for issuers considered “significant” in terms of daily transaction volume and cross-border reach. MiCA’s impact is already being felt, with some providers reassessing their offerings in the European market.
The US: From Ambiguity to Federal Clarity
Until recently, stablecoins in the United States floated in regulatory limbo—overlapping between the SEC, CFTC, and banking regulators. That changed with the passage of the GENIUS Act in July 2025. The Act introduces a federal-first framework that permits only federally regulated entities to issue stablecoins and restricts the use of unregistered foreign-issued stablecoins.
This move not only consolidates oversight under the Federal Reserve and Treasury, but also raises significant entry barriers for offshore or DeFi-native issuers—many of whom will now face higher compliance thresholds to operate in the US market.
Asia’s Diverse Landscape: From Caution to Codification
Across Asia, regulatory attitudes remain diverse—ranging from tentative to proactive:
Singapore has introduced a detailed regulatory regime for single-currency stablecoins under the Monetary Authority of Singapore (MAS), covering reserve backing, redemption guarantees, and audit requirements.
Japan has legalized fiat-backed stablecoins under the revised Payment Services Act, restricting issuance to licensed banks and trust companies.
Most recently, Hong Kong passed its own Stablecoin Bill in July 2025, adding another layer to Asia’s evolving regulatory landscape. The bill introduces licensing requirements, reserve asset guidelines, and clear penalties for non-compliance, signaling Hong Kong’s intent to become a trusted hub for regulated stablecoin activity source.
In contrast, markets like Thailand and Indonesia have taken a more cautious approach, citing concerns around monetary sovereignty and consumer protection.
This patchwork of regulation makes it increasingly complex for businesses operating across borders especially those integrating stablecoins into payment infrastructure, DeFi protocols, or treasury operations.
More Than Compliance: The Risk Spectrum Expands
As regulation evolves, the core risks surrounding stablecoins remain urgent and often overlooked:
Counterparty risk: Exposure to custodians or reserve issuers
Peg instability: Loss of 1:1 backing due to liquidity shocks
Smart contract vulnerabilities: Technical errors or exploits
Regulatory liability: Fines, enforcement, or reputational fallout
Whether you’re issuing stablecoins, using them for settlement, or accepting them in a product ecosystem, unaddressed risk can turn into unmanageable loss.
How Continuum Supports Risk-Conscious Innovators
At Continuum, we work with high-growth fintech’s and digital asset businesses to anticipate and transfer risk—before it becomes a crisis.
Our insurance and risk advisory solutions are designed to help you:
- Enhance investor and board confidence with clear protections
As the regulatory playing field evolves, we help firms turn complexity into clarity and risk into resilience.
The stablecoin landscape is shifting. Is your risk strategy keeping up?
🔗 Reach out to Continuum to explore how we can help future-proof your business.
