Regarding digital stablecoins, there have been several landmark events in the past month:
- The Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), the first legislation in the United States to establish a comprehensive regulatory framework for stablecoins, passed the Senate Committee in May 2025, bringing it one step closer to formal legislation.
- The Legislative Council of Hong Kong, China also formally passed the regulatory bill for digital stablecoins in May 2025.
- Wang Yongli, former vice president of the Bank of China, stated at the Tsinghua University PBC Global Finance Forum in May 2025 that he suggested that mainland China pay more attention to the development of stablecoins from the industry and academic fields.
- Circle, the first listed company in the stablecoin field, was listed on the New York Stock Exchange on June 5, 2025. Its stock price performed very well on the first day of listing, soaring from the issue price of US$31 to US$69 at the opening, reaching a high of US$103.75 during the session, and finally closed at US$83.23, up 168% from the issue price.
In addition, there is another view in the industry that stablecoins pegged to the US dollar are an extension of the US dollar hegemony in the field of digital currency, while stablecoins pegged to the Hong Kong dollar are a way to implement China's RMB internationalization strategy (the underlying assets may be included in Chinese government bonds in the future).
Although JD.com's stablecoin is issued in Hong Kong, it can still be regarded as an active exploration of China in the field of digital currency. This article attempts to analyze the background, progress and technical implementation of JD.com's issuance of digital stablecoins in Hong Kong, evaluate the impact on JD.com itself, Hong Kong and mainland China, and explore the profit model, policy environment and global trends of digital stablecoins (including the United States, Europe, Singapore, etc.) .
1. Overview of current progress
JD CoinChain Technology (Hong Kong) Co., Ltd., a subsidiary of JD Group, is actively promoting the pilot issuance of Hong Kong dollar stablecoins, aiming to enhance cross-border payment capabilities and serve the real economy. As early as December 2023, the Hong Kong SAR government announced that it would legislate to establish a licensing system for stablecoin issuers to adapt to the trend of financial innovation. Under the guidance of the group's overseas business strategy, the JD CoinChain Technology team conducted in-depth research in the Web3 field and found that issuing payment-type stablecoins through blockchain can solve its own cross-border settlement problems and serve other companies, bringing huge economic and social benefits. Therefore, JD launched the license application in Hong Kong as soon as possible. After about a year of hard work, it was successfully selected as the first batch of "Stablecoin Issuer Sandbox" participants announced by the Hong Kong Monetary Authority (HKMA) in July 2024. This batch of participants consists of three groups, including JD CoinChain Technology, RD Technologies, and a consortium consisting of Standard Chartered Bank (Hong Kong), Animoca Brands (Anmi Group) and Hong Kong Telecom. Starting from the second half of 2024, JD.com's stablecoin will enter the Hong Kong Monetary Authority's sandbox test. The second phase of testing is currently targeting PC and mobile applications for retail and institutional users, focusing on scenarios such as cross-border payments, investment transactions, and daily retail consumption.
JD's stablecoin project has been recognized and guided by Hong Kong regulators. Through the regulatory sandbox, HKMA allows institutions that intend to issue stablecoins in Hong Kong to test the plan and communicate with regulators in a two-way manner to provide a basis for the formulation of a formal regulatory system. JD Coin Chain Technology actively maintains close communication with the Hong Kong Monetary Authority and cooperates with regulators in other regions around the world to promote the global compliance expansion of stablecoin business. At present, JD's stablecoin has not yet been officially issued to the public. The official emphasizes that there is no purchase channel yet, and reminds the public to be vigilant about related fraud information. According to Liu Peng, the company's head, JD's stablecoin is in the late stage of sandbox testing and is expected to be launched on the market after Hong Kong officially issues a license. The overall timeline shows: Hong Kong formulates a stablecoin regulatory framework at the end of 2023 → JD enters the sandbox pilot in July 2024 → The Hong Kong Legislative Council passes the Stablecoin Ordinance in May 2025 → JD's stablecoin completes multiple rounds of testing in mid-2025 and is about to be issued.
In the process of project promotion, JD.com has worked closely with regulatory and industry partners. The Hong Kong Monetary Authority launched the stablecoin issuer sandbox pilot in March 2024, and as of July 2024, it has received consultation applications from dozens of institutions. In addition to JD.com, the first batch of institutions participating in the sandbox also include Yuanbi Technology, which issues the Hong Kong dollar stablecoin "HKDR", and the Hong Kong dollar stablecoin joint venture project led by Standard Chartered Hong Kong. In terms of supervision, the Hong Kong Monetary Authority, the Financial Services and the Treasury Bureau, etc. maintain communication with JD.com CoinChain Technology to ensure that the project complies with the requirements of the regulations. JD.com also explores cooperation opportunities with traditional financial institutions such as Standard Chartered Bank (Hong Kong) to jointly improve the application ecology of stablecoins. It is worth noting that the Hong Kong financial regulator officially implemented the "Stablecoin Ordinance" on May 30, 2025, marking that the first batch of pilot institutions such as JD.com are one step closer to formal licensed issuance. With the support of the regulatory sandbox, the JD.com stablecoin project has progressed smoothly, laying the foundation for the next stage of formal issuance.
2. Strategic significance
For JD.com Group, issuing digital stablecoins has important strategic value to JD.com.
On the one hand, stablecoins can serve as the payment infrastructure for JD.com's global business and solve the pain points in cross-border payment and settlement. Liu Peng, CEO of JD.com CoinChain Technology, said that stablecoins have certain currency attributes and the advantages of digital asset technology, which can make up for the defects of traditional cryptocurrencies with large fluctuations and emerge in the payment field. The positioning of JD.com's stablecoin is not limited to serving JD.com's own e-commerce ecosystem, but to provide more efficient, low-cost and secure payment solutions for global companies and individuals. By mastering the bridge between legal currency and cryptocurrency exchange, JD.com is expected to take the initiative in cross-border e-commerce, overseas market collection and settlement and other fields.
In addition, the issuance of stablecoins can also bring resources and benefits to JD’s financial technology sector, such as obtaining interest income from users’ deposited funds and increasing the accumulation of transaction data.
Overall, the stablecoin project will help consolidate JD.com’s position as a technology-driven service company and expand its financial technology footprint.
For Hong Kong as an international financial center, JD.com's choice to issue stablecoin in Hong Kong highlights Hong Kong's unique value in digital currency experiments.
In recent years, the Hong Kong SAR government has actively embraced virtual assets and the Web3 industry, and is committed to consolidating Hong Kong's position as an international financial center. The passage of the Stablecoin Ordinance and the advancement of the sandbox pilot make Hong Kong the world's first jurisdiction to establish a comprehensive regulatory framework for legal currency stablecoins. This is of great significance to Hong Kong: first, as a representative of digital financial infrastructure, stablecoins are expected to enhance the innovative vitality and competitive advantage of Hong Kong's financial market; second, the stablecoin pilot has attracted well-known Chinese and foreign companies including JD.com and Standard Chartered to participate, driving the capital market's attention to related concepts; third, by taking the lead in regulating stablecoins in Hong Kong, Hong Kong can have a certain voice in international rule-making .
Some analysts pointed out that the development of stablecoins is essentially extending the dominance of the US dollar to the crypto field. Whoever makes the rules will have the upper hand in the future reshuffle of the monetary system. Therefore, Hong Kong is betting on stablecoins and is expected to play a key role in the new round of financial reforms.
The Hong Kong stablecoin experiment also has implications for the development of digital finance in mainland China.
At present, mainland China still maintains a strict regulatory attitude towards cryptocurrencies and stablecoins, mainly promoting the implementation of the central bank's digital currency (digital RMB). However, Hong Kong's practice shows that stablecoins can be used as payment tools rather than pure speculative assets under the compliance framework, and the regulatory logic is shifting to treating them as financial infrastructure. CITIC Securities Research Report believes that the promotion of stablecoin legislation in Hong Kong and the United States will provide a stable trading medium for the tokenization of physical assets and promote the implementation of real world asset (RWA) projects issued by mainland Chinese companies in Hong Kong.
At the same time, the implementation of the stablecoin policy is expected to indirectly promote cooperation between Hong Kong and the mainland in the construction of interfaces such as cross-border settlement of digital RMB and supply chain finance. Liu Peng of JD.com also revealed that the team is actively studying the possibility of issuing stablecoins pegged to offshore RMB to provide new tools for cross-border circulation of RMB, but this requires communication with mainland regulators.
It is foreseeable that the successful pilot of Hong Kong's stablecoin will provide a sample for observation in the mainland: on the one hand, it verifies the actual benefits of digital currency in trade settlement and consumer payment; on the other hand, it also forces the mainland to think about how to absorb the advantages of stablecoins and integrate them into the future digital financial system under the premise of safety and control. For example, it is not ruled out that the digital RMB will refer to the stablecoin mechanism in the future to improve cross-border usability and programming functions.
In short, as a "frontier test field", the experience and lessons of the Hong Kong stablecoin project will influence the direction of digital financial regulation and innovation in mainland China.
3. Technical Implementation
3.1. Technical architecture and underlying chain selection
JD Stablecoin is issued using blockchain technology and is a digital token based on the public blockchain. According to the project leader, JD Stablecoin will be anchored to the Hong Kong dollar (HKD), a legal currency, and maintain a stable value at a 1:1 ratio. This means that for every JD Stablecoin issued, there is a reserve asset worth HKD 1 as support in the background.
The public chain is chosen as the underlying layer in order to utilize the distributed ledger, peer-to-peer transmission, and programmability of the blockchain to achieve transparent value transfer and rapid settlement. At the same time, the use of mainstream public chains helps to improve the compatibility of stablecoins and facilitate access to different wallets, trading platforms, and applications.
The specific name of the public chain it relies on has not been announced yet, but it is speculated that it may be based on mature chains such as Ethereum, or upgraded from JD.com’s self-developed regulatable alliance chain architecture to take into account performance and compliance requirements.
3.2. Anchoring Mechanism and Reserve Custody
As a fiat stablecoin, JD Stablecoin adopts a 100% full reserve anchoring mechanism, that is, each unit of token is reserved with high-quality, highly liquid assets to ensure price stability and that holders can redeem it at face value.
According to the official websites of JD CoinChain Technology and Yuanbi Technology, the Hong Kong dollar stablecoins to be issued by the two companies are both pegged to the Hong Kong dollar at a 1:1 ratio. The reserve assets are composed of highly liquid assets, which are deposited in independent accounts of licensed financial institutions and are available for external inquiries through regular disclosure reports. This means that the reserve funds of JD Stablecoin may mainly be low-risk assets such as cash, bank deposits, and short-term government bonds, which are deposited in approved custodial bank accounts and isolated from the issuer's own funds. This custody arrangement can prevent the issuer from misappropriating reserves and protect the rights and interests of holders.
Hong Kong regulators require that stablecoin issuers must redeem the holders' tokens at par at any time, so JD Stablecoin has designed a complete redemption mechanism: users can apply for redemption, and the issuer promises to pay the equivalent amount in legal currency within a reasonable time. At the same time, the system will record the issuance and recovery process through smart contracts or backend systems to ensure that the number of tokens on the chain corresponds to the reserve assets in real time.
3.3. Cross-border payment and smart contract mechanism
One of the technical implementation focuses of JD.com's stablecoin is its application in cross-border payment scenarios.
With the peer-to-peer transmission characteristics of blockchain, the clearing of funds between the two places can bypass traditional multi-level intermediaries, achieve near-real-time arrival, and reduce the handling fees and exchange rate costs of cross-border remittances. JD.com revealed that the test scenarios include cross-border trade payments and retail payments. For example, in cross-border e-commerce, overseas consumers can directly use JD.com stablecoins to pay, saving exchange fees compared to credit card channels; suppliers can also use stablecoins to collect payments in a timely manner, accelerating capital turnover.
In addition, JD.com is testing stablecoin payments in connection with its Hong Kong and Macau online malls and other payment collection scenarios, which is expected to solve the pain points of slow settlement and high fees in previous retail payments.
In terms of smart contract mechanism, stablecoins are naturally programmable as blockchain tokens. This means that enterprises can integrate stablecoins into smart contracts to achieve automated payments and financial innovation. For example, in supply chain finance, a contract can be written to automatically release stablecoin payments to suppliers when the logistics system confirms receipt of goods, thereby reducing manual intervention and credit risk. For another example, in games or digital asset transactions, stablecoins can serve as a settlement medium, achieving instant settlement and profit sharing through contracts.
JD Stablecoin is also expected to support basic compliance functions, such as blacklist and freeze functions, to meet anti-money laundering and sanctions requirements (similar to the mainstream stablecoin USDC).
In terms of the overall technical solution, JD Stablecoin takes into account both openness and compliance. Through the combination of on-chain and off-chain methods, it not only gives play to the advantages of cross-border circulation and high availability of blockchain, but also meets regulatory requirements in terms of reserve custody, information disclosure, etc., laying a technical foundation for subsequent large-scale applications.
4. Profit model of digital stablecoin
4.1. Seigniorage and interest income
The primary source of profit from issuing stablecoins is seigniorage or interest rate spread income.
Essentially, when currency holders exchange fiat currency for stablecoins, the issuer obtains an interest-free deposit of funds. The issuer can invest this reserve in low-risk interest-bearing assets to earn interest differentials.
Taking the example of global stablecoins, due to rising interest rates in recent years, the profits of stablecoin issuers have increased significantly. According to Circle, the interest income of its USDC stablecoin in 2021 was only US$28 million, and it is expected to soar to US$2.1 billion in 2023. This reflects that when interest rates rise, issuers can obtain considerable interest income with huge reserves. Similarly, Tether (the issuer of USDT) also reported astonishing profits - net profit in the first half of 2023 reached approximately US$2.2 billion, mainly from interest income from holding US Treasury bonds.
For JD.com’s stablecoin, if the issuance scale reaches billions, even if the reserve is invested in short-term deposits and government bonds with an annualized return of 2-5%, there will be tens of millions or even hundreds of millions of Hong Kong dollars in interest income each year. After deducting operating costs, this part of the income constitutes the seigniorage profit of the stablecoin business.
Of course, according to Hong Kong regulatory requirements, how the reserve income is allocated and whether part of it needs to be returned to users are still subject to regulatory details. However, from international experience, most stablecoin issuers use interest rate spread income as their main profit point.
4.2. Value-added services and ecological effects
In addition to passive interest income, stablecoins can also bring a variety of active profit models and strategic benefits.
The first is transaction and exchange fees.
The issuer can charge a small fee for the issuance, redemption or large transfer of stablecoins. For example, some stablecoins charge a fee of 0.1%-0.2% for redemption, and a management fee is levied on large institutional clients, etc., to generate income for the company.
Secondly, cross-border settlement and payment services can generate value-added benefits.
If JD.com's stablecoin is used on a large scale for cross-border e-commerce and supply chain payments, JD.com can provide value-added services such as exchange services, wallet custody, and payment gateways based on stablecoins, and charge service fees to corporate customers. For example, if a company converts domestic RMB into JD.com's stablecoin for payment, JD.com can make a profit on the exchange rate spread.
Again, there are opportunities in the field of supply chain finance.
JD.com can use the stablecoin platform to provide financing, factoring and other services to upstream and downstream suppliers. When suppliers hold stablecoin receivables, JD Finance may provide discounts or loans in stablecoins or legal tender, earning interest or rate differences. The transparent and traceable nature of stablecoins reduces risk control costs and makes this model more efficient.
In addition, the ecological effects brought by stablecoins may be implicit but far-reaching.
For example, it can improve user stickiness and retention rate - consumers and merchants will enter JD's ecosystem more due to the use of JD stablecoin, driving the growth of mall transaction volume. For another example, JD stablecoin may promote data sedimentation, and the collection and analysis of a large amount of cross-border transaction data can feed back to JD's risk control and marketing, indirectly creating value.
It is worth mentioning that the layout of mainstream payment giants confirms the importance of the stablecoin ecological effect. For example, PayPal launched the stablecoin PYUSD and provided an annualized 3.7% return incentive to coin holders, aiming to cultivate user habits and make profits through payment fees and capital accumulation in the future.
In general, the profit model of stablecoins is diverse - in the short term, there are direct benefits such as minting interest rate spreads, and in the long term, the more important is the strategic significance to the payment landscape and financial ecology . Once JD Stablecoin is widely adopted, it will further consolidate JD's infrastructure position in the field of cross-border e-commerce and digital finance, which in itself will be transformed into huge commercial value.
5. Hong Kong’s policy environment
5.1. Stablecoin regulations and licensing system
On May 21, 2025, the Legislative Council of Hong Kong passed the Stablecoin Bill, which officially came into effect on May 30, becoming Asia's first law to systematically regulate legal currency stablecoins. The bill establishes a licensing system for stablecoin issuers, which will be implemented by the Hong Kong Monetary Authority (HKMA).
The regulations stipulate that any stablecoin issued in the course of business in Hong Kong that is pegged to the value of a legal currency, or a stablecoin issued overseas but claiming to be anchored to the value of the Hong Kong dollar, must apply for a license from the HKMA. This means that no matter whether the currency is Hong Kong dollars, US dollars or other legal currencies, as long as it is issued in Hong Kong or pegged to the Hong Kong dollar, it will be subject to supervision . Strict requirements must be met to apply for a license, including:
- Reserve asset management : Issuers must establish a robust reserve mechanism to ensure that they hold sufficient and highly liquid reserve assets to support the value of stablecoins, and that assets are kept separate from customer funds. At the same time, a sound anchoring mechanism must be maintained to ensure that redemption requests can be honored at a 1:1 ratio at any time.
- Redemption obligations : Licensed issuers must clearly state the holder’s right to redeem at par and process redemption applications within a reasonable time. This is a key protection measure for investors’ rights and interests, ensuring that stablecoins are truly “stable and trustworthy.”
- Risk and compliance : Issuers must comply with a series of anti-money laundering/counter-terrorist financing (AML/CFT) requirements and establish a comprehensive risk management system. There are also clear obligations for information disclosure and auditing, such as regular disclosure of reserve status and verification by external audits. In addition, there are requirements for the suitability of key personnel such as directors and senior executives to ensure that the management team is competent and has no bad records.
After the implementation of the Ordinance, in order to strengthen investor protection, Hong Kong only allows designated licensed institutions to sell legal currency stablecoins in Hong Kong, and only licensed stablecoins can be provided to retail investors . In terms of the transition period, the Ordinance gives existing practitioners a 6-month "non-violation period" to apply for licenses and rectify their businesses. During this period (and at any time), only advertisements promoting the issuance of licensed stablecoins are allowed, and unlicensed institutions are prohibited from taking the opportunity to market in order to prevent fraud. Hong Kong Financial Services and the Treasury Bureau Director Paul Chan emphasized that the Ordinance implements the principle of "same activities, same risks, same supervision" to create a sound regulatory environment, which not only meets international standards but also consolidates Hong Kong's status as an international financial center.
5.2. Sandbox Policy and Latest Developments
Before the regulations were implemented, Hong Kong had actively guided the development of stablecoins through a regulatory sandbox.
The HKMA released its regulatory intention for stablecoins at the end of 2023 and officially launched the "Stablecoin Issuer Sandbox" program in March 2024. The first batch of pilot lists was announced on July 18, 2024, including three groups of entities such as JD CoinChain Technology. The sandbox allows selected institutions to test their stablecoin technology and operational plans in accordance with the proposed regulatory requirements before the formal implementation of the licensing system, and communicate with the regulatory authorities in a two-way manner.
Through this mechanism, Hong Kong regulators can promptly identify and resolve potential problems, providing a basis for the formulation of detailed rules and regulations. For example, regulators can propose improvement requirements for network security, smart contract vulnerabilities, redemption processes, and other issues found during testing. Under the sandbox framework, JD Stablecoin has been tested in multiple scenarios such as cross-border payments, supply chain management, and in-game payments, demonstrating the wide applicability potential of stablecoins.
The Hong Kong Monetary Authority further issued a consultation document after the ordinance came into effect on May 26, 2025, proposing to formulate detailed regulatory guidelines, including reserve management, issuance and redemption processes, corporate governance, etc., to provide clear standards for licensed stablecoin issuers to follow. These measures show that Hong Kong is steadily transitioning from sandbox trials to licensed supervision: it is expected that the first batch of stablecoin issuance licenses will be issued this year, and licensed institutions must operate strictly in accordance with the guidelines.
In general, Hong Kong's policy environment has adopted a cautious and open attitude towards stablecoins: on the one hand, it actively introduces market players to test the waters and accumulate experience through sandboxes; on the other hand, it quickly builds a legal framework to safeguard large-scale commercial use. This model of first piloting and then legislating is seen as a balance between encouraging financial innovation and maintaining financial stability. It is no wonder that after the announcement of the passage of the regulations, Hong Kong-related concept stocks have received high attention from the market - regulatory clarity is seen as a milestone in the development of the industry.
5.3. Regulatory coordination and licensing system details
In Hong Kong, the regulation of stablecoins is mainly led by the HKMA, which coordinates the division of labor with the Securities and Futures Commission (SFC).
Since the fiat stablecoins are closer to payment tools or deposit substitutes, the HKMA has assumed the main regulatory responsibility and regards stablecoins as part of the financial market infrastructure. The SFC continues to pay attention to virtual asset trading platforms, and requires the platforms to conduct due diligence on stablecoins (such as USDT, USDC, etc.) listed and traded on exchanges to ensure that the stablecoins traded are safe and compliant.
Under the new regulatory framework, only licensed banks, licensed stored-value payment instrument institutions or specially approved companies can provide stablecoin services to the public. This means that if a technology company like JD.com obtains a stablecoin issuance license, it will also need to be subject to continuous supervision by the HKMA during operations, similar to the management model of banks and payment institutions. License applications are expected to meet minimum capital requirements, business plan review, risk assessment and other conditions, and are not easy to obtain.
Another recent policy development is Hong Kong's participation in discussions on cross-border stablecoin cooperation: such as exploring whether the Guangdong-Hong Kong-Macao Greater Bay Area can use stablecoins to improve cross-border payment efficiency, and how Hong Kong's stablecoin can be connected with the mainland's digital RMB pilot program to provide more options for cross-border consumption for residents of the two places.
All these show that Hong Kong is incorporating stablecoins into its financial innovation strategy, and the regulatory environment is becoming more mature and complete.
6. International comparative analysis
6.1. Global Regulatory Race and Trends
Currently, major economies around the world are stepping up efforts to build stablecoin regulatory frameworks, presenting a situation of synchronized racing.
According to statistics, more than a dozen countries and regions around the world have officially launched stablecoin regulatory laws or legislative drafts, indicating that stablecoin legislation is accelerating from regional trials to a global unified framework. Regulatory consensus has gradually formed in various countries: stablecoins should be regarded as payment tools rather than purely speculative assets, and regulatory logic should be formulated with the thinking of financial infrastructure . Under this trend, Hong Kong, the United States, the European Union, Singapore, etc. have relevant legislation or clear guidelines. Next, we will review the policy trends and typical cases in the United States, Europe, Singapore, etc. to compare with Hong Kong's practices.
6.2. The United States: Regulatory exploration and market practice go hand in hand
For a long time, the United States lacked special laws on stablecoins at the federal level, and supervision was mainly based on existing financial rules (such as money transmission licenses, bank custody requirements, etc.). However, since 2023, the U.S. Congress has begun to actively promote stablecoin legislation. The latest progress is that the Senate passed the GENIUS Act by 66 votes to 32, establishing the first unified stablecoin regulatory framework in the United States. The bill is expected to require stablecoin issuers to obtain federal licenses and meet conditions such as reserve audits, timely redemption, and risk monitoring. This marks an important step for U.S. supervision from states to federal unification.
However, before the bill was officially implemented, the US market mainly relied on industry self-discipline and law enforcement supervision: New York State required stablecoin custodians to hold trust licenses through systems such as BitLicense, and Circle (USDC issuer) and Paxos (PYUSD issuer) were both regulated and operated in New York. The Office of the Comptroller of the Currency (OCC) also stated that federal banks can issue stablecoins for payment and settlement, but they must meet requirements such as 100% reserves.
In terms of the market, the United States has the world's largest stablecoins: Tether (USDT) and USD Coin (USDC) occupy the first and second place in the stablecoin market respectively, with a combined market value of about US$214 billion, accounting for about 90% of the world. Under huge market demand, stablecoins have become the main liquidity tool for many crypto exchage, with an average monthly transaction volume of US$4 trillion on the chain, far exceeding the total transaction volume of Visa and MasterCard credit cards.
This pattern of "development first, regulation later" has prompted payment giants to enter the market: PayPal issued the dollar-pegged stablecoin PYUSD in August 2023, becoming the first dollar stablecoin launched by a regulated financial institution; Visa, MasterCard and others have cooperated with institutions to try out USDC for settlement in cross-border payments. Federal Reserve officials are cautious about private stablecoins, fearing that they will affect the stability of the payment system, but they also recognize the potential of stablecoins to improve payment efficiency.
In general, the United States is moving from market-driven to the stage of regulatory framework implementation : once federal laws are passed and implemented, it is expected to give compliant issuers such as Circle and Paxos a clearer legal status, while deterring market violators (such as the early case of Tether with false reserves). The US regulatory experience also influences the formulation of international standards, making it possible for stablecoins to be included in the mainstream financial system.
6.3. Europe: MiCA regulations lead comprehensive supervision
The European Union is at the forefront of stablecoin regulation. The Crypto-Asset Market Regulation Act (MiCA) was officially passed in 2023 and will take effect in stages from the end of 2024 to 2025. MiCA has established detailed and strict regulatory requirements for stablecoins (called electronic money tokens EMT and asset reference tokens ART). Its core measures include:
Issuance license - If any stablecoin is provided to EU users, the issuer must obtain an authorization license in the EU and publish a crypto asset white paper approved by the regulator;
Reserve requirements - Stablecoin issuers are required to hold safe and low-risk assets as reserves, the value of which must be at least equal to the value of the stablecoins in circulation, and report to regulators regularly;
Redemption and equity - holders have the right to redeem stablecoins at a 1:1 ratio with fiat currency at any time, and issuers cannot refuse, and are prohibited from providing any form of interest or income to holders to avoid inducing speculation;
Operating restrictions – Issuers must meet strict governance requirements, avoid conflicts of interest, and are subject to marketing restrictions that must not be exaggerated or misleading.
MiCA also sets special rules for significant stablecoins. For example, when the circulation scale or trading volume of a stablecoin exceeds a certain threshold, the issuer will be subject to higher capital requirements and stricter scrutiny to prevent impacts on the financial stability of the euro area.
Under the implementation of MiCA, traditional financial institutions in Europe have begun to make plans: Societe Generale has issued the Euro stablecoin (EUR CoinVertible), becoming the first approved bank stablecoin; exchanges such as Binance have announced that they will gradually guide European users to switch to compliant stablecoins and restrict the use of unauthorized stablecoins. The European Central Bank is also continuously evaluating the digital euro plan to form a complementary competitive relationship with private stablecoins.
In general, EU MiCA provides the most comprehensive and detailed stablecoin regulatory solution, which is called "a global regulatory benchmark" by the industry. For stablecoin issuers who want to enter the EU market (including Hong Kong's JD.com), MiCA means that they need to set up an entity in the EU to apply for a license and comply with obligations such as information disclosure and reserve audits. This undoubtedly increases compliance costs, but also ensures the security of stablecoins in the EU and user confidence.
Compared with the Hong Kong regulations that focus on the Hong Kong dollar stablecoin, MiCA covers all fiat currency stablecoins, reflecting the breadth and uniformity of supervision. It is an important case worthy of attention in international comparison.
6.4. Singapore: Clarifying the Standards for Single Currency Stablecoins
As an Asian financial center, Singapore has also quickly improved its stablecoin regulatory framework. In August 2023, the Monetary Authority of Singapore (MAS) issued a new stablecoin regulatory framework, which applies to single-currency stablecoins (SCS) anchored to the Singapore dollar or G10 currencies, and all SCS issued in Singapore must comply.
The main requirements of the framework include:
Stable value - Stablecoins must have high-quality assets as 100% reserves to ensure that they can maintain a 1:1 peg with the underlying fiat currency in extreme cases;
Capital requirement – issuers must hold capital of not less than S$1 million or 50% of their annual operating expenses (whichever is higher) to provide a financial buffer;
Redemption time limit - holders must be provided with timely redemption, with a redemption period of no more than 5 working days to ensure liquidity;
Asset custody and independent auditing - Reserve assets must be held in custody with a recognized financial institution, and independent auditors must verify the adequacy of reserves and issue reports on a monthly basis;
Investor rights - Issuers must transparently disclose the details of the stablecoin mechanism and bear legal responsibility for misleading white paper content.
MAS stipulates that stablecoin issuers can apply for operations through the existing licensing categories under the Payment Services Act, such as obtaining a "Main Payment Institution" license and indicating stablecoin business. This makes the issuance of stablecoins in Singapore legal and in line with digital payment regulations.
In addition, Singapore is also at the forefront in promoting central bank digital currency (CBDC) and exploring cross-border payment interoperability. MAS has experimented with using stablecoins and CBDC for cross-border settlement (Project Ubin, etc.).
At present, Singapore has seen the emergence of projects such as Xfers' XSGD (Singapore dollar stablecoin), but their scale is relatively limited.
Looking ahead, Singapore's advantages lie in its open financial environment and sandbox mechanism. MAS said it welcomes regulated stablecoin innovations, while also closely following international developments and dynamically adjusting regulatory details to maintain financial stability without inhibiting financial technology innovation.
Singapore and Hong Kong have similar approaches to stablecoin regulation, such as using 100% of reserves in highly liquid assets (cash or short-term government bonds, etc.), ensuring 100% redemption protection, and risk control.
There are also obvious differences: Singapore focuses more on single-currency stablecoins of its own currency and major foreign currencies; Hong Kong clearly states that it can only issue stablecoins pegged to the Hong Kong dollar, and it is clear that as long as the stablecoin is anchored to the Hong Kong dollar, it cannot be issued in Hong Kong or outside Hong Kong, and must be supervised by the Hong Kong Monetary Authority .
7. Industry giants’ dynamics
PayPal launches PYUSD, and traditional payment giants enter the market.
In August 2023, PayPal, a global third-party payment giant, officially released the PayPal USD (PYUSD) stablecoin, which is the first US dollar stablecoin launched by a large payment company. PYUSD is issued by Paxos, a New York trust institution, and is 1:1 anchored to the US dollar. Its reserves are composed of safe assets such as US dollar deposits and short-term US Treasury bonds, ensuring that holders can redeem it at any time for $1. PayPal has integrated PYUSD into its wallet application, and users can buy, sell, hold and transfer PYUSD just like using balances.
Its strategic goal is to integrate blockchain technology into the mainstream payment network: with PYUSD, PayPal users can make low-cost, near-real-time cross-border transfers and payments . For example, an American user can exchange US dollars for PYUSD and send it to a foreign friend, who will receive it instantly and can exchange it for the local currency without the high cost of traditional remittances. PayPal's participation is seen as a landmark event for the "out-of-circle" of stablecoins, which means that Wall Street and Silicon Valley are beginning to embrace crypto payments.
To promote the popularity of PYUSD, PayPal announced in 2024 that it would provide annualized 3.7% profit rewards (paid in PYUSD) to US users holding PYUSD, which is equivalent to paying interest on the stablecoin balance to attract users to retain more funds. This move shows that PayPal is willing to exchange short-term costs for users' recognition of its stablecoin ecosystem, and plans to make profits through transaction fees and other means in the long term.
Currently, the application scope of PYUSD is still relatively limited, mainly circulating within PayPal's own network, and gradually expanding to some decentralized exchanges and encryption platforms. However, PayPal's influence and customer base provide PYUSD with huge development potential: in the future, it may be used for merchant settlement, allowing merchants to receive payments in PYUSD and avoid credit card fees, or for cross-border e-commerce payments to improve capital turnover efficiency, etc.
It can be foreseen that PayPal's participation will drive more traditional payment companies to evaluate similar initiatives, and stablecoins are transforming from tools in the crypto industry to part of mainstream payment innovation.
Stripe integrates stablecoin payments to accelerate global services.
Another payment giant, Stripe, chose to enter the digital currency field by integrating other people's stablecoins. As early as April 2022, Stripe announced that it would support some platforms to pay creators with USDC stablecoins, becoming one of the earliest Internet financial companies to apply stablecoin payments.
Entering 2023-2024, Stripe further launched new features such as stablecoin payment accounts, covering more than 100 countries around the world. Specifically, Stripe's merchants can now open a stablecoin account, easily receive and hold the balance of USDC, a stablecoin of the US dollar, and convert it into local fiat currency at any time. This is of great significance to developers and freelancers who lack a US dollar bank account: they can receive USDC through Stripe, avoid the cumbersomeness and fees of cross-border bank wire transfers, and then convert it to local currency when needed. Stripe also provides an API interface to facilitate companies to integrate stablecoin payment and collection functions into their products. According to Stripe's official data, thanks to the stablecoin solution, the volume of stablecoin transactions on the Stripe platform in 2024 has more than doubled compared to the end of 2023, and the number of monthly active users has exceeded 40 million. This growth confirms the strong demand for stablecoins as a cross-border payment carrier.
On a strategic level, Stripe also acquired a startup called "Bridge" at the end of 2023, focusing on stablecoin issuance and payment integration, with a transaction amount of up to US$1.1 billion. This move is seen as Stripe's preparation for possible autonomous stablecoins or deeper encryption services in the future.
Although Stripe has not yet issued its own stablecoin, its actions show that the company attaches great importance to the potential of stablecoins in global payments and has invested a lot of resources in building related infrastructure. As Stripe continues to improve its support, more and more multinational companies and platforms will be able to seamlessly use stablecoins to complete payment, settlement, salary distribution and other businesses, and the decentralization and efficiency of global finance are expected to be greatly improved.
Adyen has gone from watching to preparing, and traditional acquiring institutions are welcoming changes.
Adyen, a well-known European payment company, has always been cautious about cryptocurrencies in the past, but now it has begun to change its attitude under the wave of stablecoins.
In the early years, Adyen had reservations about accepting crypto payments due to risk considerations. However, management recently realized that being overly conservative could lead to missed opportunities, and the industry trend has changed. Since the end of 2023, Adyen management has repeatedly talked about the potential benefits of stablecoin technology for payments in public, saying that the company is paying attention to changes in customer needs. Industry analysts pointed out that Adyen has never blindly followed trends. If it starts discussing stablecoins now, it must have seen a clear market opportunity. They waited for the "buy now, pay later" (BNPL) model to mature before entering the market, and they are also waiting for stablecoins to move from concept to mature application. When large merchants begin to require embedded stablecoin payment services, Adyen will follow the trend.
Recently, there have been signs that Adyen has begun technical preparations, such as upgrading the payment gateway to support stablecoin settlements such as USDC, and exploring cooperative pilot projects for cross-border clearing of stablecoins with Visa and others.
It can be predicted that if Adyen launches stablecoin-related services, it will focus more on the needs of B-side enterprises and provide safe and compliant stablecoin payment channels, rather than issuing its own currencies for speculation. Adyen's transformation reflects that traditional payment giants are being forced by the market to accept this new thing.
While PayPal and Stripe are already staking out their territory, Adyen and other acquiring institutions are unwilling to lose their competitive advantage and are also embracing change. This payment revolution triggered by stablecoins is gradually integrating the once distinct worlds of traditional finance and crypto finance.
8. Conclusion
The development of digital stablecoins is no longer a question of “whether it is feasible”, but rather “when it will fully prosper”. As the supervision of various countries gradually becomes clearer, the new era of stablecoins is unstoppable.
Let us wait and see: Will JD.com usher in a new peak of development with the help of Hong Kong stablecoin? Or will there be a latecomer who will take off from Hong Kong and write a new legend of digital stablecoin?
