Beyond Stablecoins: The Rise of the Internet Financial System

The US passed the GENIUS Act in July 2025, which established a federal framework for stablecoins, ensuring they are regulated as fully-backed payment instruments with strong consumer protections and financial integrity. GENIUS sets clear boundaries. Stablecoins must be backed one-to-one by cash and short-term Treasuries; issuers must provide monthly audited disclosures; yield payments from issuers to holders are prohibited; and stablecoin holder claims have super-priority in bankruptcy. Issuers are deemed financial institutions under the Bank Secrecy Act and are subject to stringent anti-money laundering (AML), sanctions, and technical requirements, including the requirement to comply with law enforcement orders. Regulated foreign issuers are allowed access to US markets under clear equivalence and reciprocity rules, meaning only those from comparable regulatory regimes and subject to US oversight can access the American market.

In December 2025, Circle received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a national trust bank, First National Digital Currency Bank, N.A. Once fully approved, First National Digital Currency Bank would operate as a federally regulated trust bank, subject to OCC oversight, and would oversee the management of the USDC reserve on behalf of Circle’s US issuer. The conditional approval represents an important milestone in Circle’s efforts to further strengthen the infrastructure supporting USDC, the world’s largest regulated stablecoin, and meet requirements under the GENIUS Act.⁴⁰

GENIUS decisively closed the regulatory vacuum that allowed offshore actors to access the US market. By enshrining consumer protections, financial stability safeguards, and national security controls, the US has established a global benchmark for regulated digital dollars.

Other leading jurisdictions have already implemented or are finalizing stablecoin regimes that reflect similar principles:

Union européenne
In the European Union, the MiCA framework has been in effect since 2024. It regulates fiat-backed stablecoins as electronic money tokens (EMTs). MiCA prohibits algorithmic stablecoins and places caps on non-EU currency tokens used at scale for real-world payments to protect monetary sovereignty.

United Kingdom
The United Kingdom is implementing a framework through the Financial Conduct Authority that treats qualifying stablecoins as payment instruments. Issuers must segregate reserves, redeem at par, and comply with prudential and conduct rules. The Bank of England will provide systemic oversight for large issuers. The framework is designed to integrate stablecoins into payments while maintaining financial stability.

Japon
In Japan, the Diet (parliament) passed amendments to the Payment Services Act in 2022 legalizing stablecoins. Japan's Financial Services Agency then drafted regulations that became effective on June 1, 2023. The amended law requires that stablecoins be issued only by licensed banks, trust companies, or registered money transfer agents. The law permits approval of both domestic- and foreign-issued stablecoins and mandates full backing by safe assets and strong redemption rights. This regulatory clarity has already prompted major Japanese financial institutions to begin piloting stablecoin issuance.

Hong Kong
Hong Kong, one of the largest global financial markets, made its Stablecoin Ordinance effective on August 1, 2025. It requires stablecoins that are marketed to the public to be licensed in the territory. The law has high-standard requirements on reserve asset, redemption, transparency, and anti-money laundering compliance.

Singapour
In Singapore, the Monetary Authority of Singapore (MAS) law governing digital assets is the Payment Services Act (PSA) for Digital Payment Tokens (DPTs) and the Securities and Futures Act (SFA) for security tokens. MAS oversight includes a strong focus on consumer protection, AML/CFT, and risk mitigation, requiring licensed Digital Token Service Providers (DTSPs) to safeguard assets, segregate funds, and restrict retail promotion, creating a risk-focused framework for innovation. MAS in 2023 proposed a Stablecoin Framework for single-currency stablecoins (SCS) pegged to the SGD or G10 currencies, however, the Stablecoin Framework remains pending approval by Parliament prior to coming into force.

Switzerland
Switzerland has published new legislation plans for crypto and stablecoins, including a public consultation, that emphasizes reserve quality, redemption rights, and AML compliance.

Émirats arabes unis
The United Arab Emirates introduced the Payment Token Services Regulation, which came into force in July 2024 and establishes the country’s first federal framework for fiat-referenced stablecoins, licensing issuers and service providers under the Central Bank and requiring fully backed, 1:1 redeemable Payment Tokens. ADGM and DIFC have also introduced aligned stablecoin regimes that mandate par redemption, segregated high-quality reserves, strict AML/CTF and Travel Rule compliance, and prohibit interest or yield, creating one of the most comprehensive regulatory environments for fiat-backed digital assets globally.

Canada
Canada introduced the Stablecoin Act in November 2025, which would establish a federal prudential framework for stablecoin issuance under the supervision of the Bank of Canada. The payments-centered framework is set to unlock the growth of Canadian dollar stablecoins and cement Canada’s place as a leader in tokenized settlement and foreign exchange markets.