Regulation is turning stablecoins into the infrastructure of global finance

Written by Russell Pereira

Apr 28, 2026
8 min

As Rosie Rios, Paolo Ardoino, David Katz and Geoffrey Kendrick outline, the convergence of GENIUS, MiCA and Asia Pacific regulatory initiatives is recasting stablecoins from experimental instruments into bank-grade infrastructure that is beginning to reshape payments, liquidity, and cross-border finance.

The implementation of the Guiding and Establishing National Innovation for United States (US) Stablecoins Act (GENIUS Act) in the United States and the Markets in Crypto-Assets Regulation (MiCA) in the European Union marks a decisive transition in the evolution of stablecoins. The GENIUS Act creates a federal rulebook for stablecoins in the US, while MiCA establishes a unified framework across the EU. What began as a parallel financial experiment is now being absorbed into the core architecture of regulated finance.

Stablecoins now represent a mid-hundreds-billion-dollar asset class processing tens of trillions of dollars annually. At the same time, regulators across major jurisdictions are converging on a common model. This model requires full reserve backing with safe assets, enforceable redemption at face value, and licensing limited to banks or bank-like institutions.

Rosie Rios, 43rd treasurer of the US and board member of Ripple, framed this transformation as a redesign of financial infrastructure built on trust, governance and accountability rather than a purely technical change. “We are moving from fiat cash to computer code, and we need to make sure the code reflects our values,” she said.

Regulation is redefining what a stablecoin is

The GENIUS Act transforms stablecoins into regulated payment instruments embedded within the banking system. Only supervised entities can issue them, reserve requirements are tightly defined, and holders gain a legal right to redeem at par. In simple terms, every unit of stablecoin must be backed by real assets such as cash or short-term government securities, and users must be able to exchange it for full value on demand. MiCA reaches a similar outcome through a different legal structure, classifying stablecoins as e-money or asset-referenced tokens while imposing equivalent standards around backing, segregation and governance.

David Katz, vice president of strategy and policy for Asia Pacific at Circle, captured the significance of this shift. “It changed the view of stablecoins from an ‘if’ to a ‘how’,” he said, reflecting how regulation and adoption now move together and how engagement between policymakers and industry has intensified.

Paolo Ardoino, chief executive of Tether, highlighted how this regulatory phase follows large-scale real-world adoption. “What we did was start from the ground up. We built a user base of people who wanted to use this technology, and now the banks are integrating with us,” he said. His observation reinforced that regulation is formalising an asset class that already operates at global scale across payments, trading, and cross-border flows.

These developments redefine the asset itself. Stablecoins now function much like regulated payment instruments, where each token represents a direct claim on underlying assets held on the issuer’s balance sheet and supervised by regulators.

MiCA and GENIUS are converging on the same financial model

Despite differences in legal structure, GENIUS and MiCA align in practice. Both frameworks require full reserve backing with high-quality liquid assets, embed redemption as a legal right, and anchor issuance within regulated institutions subject to governance, audit and disclosure standards. In banking terms, stablecoins are moving closer to fully reserved payment instruments rather than deposit-funded lending products.

Katz underscored how quickly this alignment has developed. “Five years ago, there was almost no regulation on stablecoins. Today, we see robust frameworks across major jurisdictions,” he said, highlighting the emergence of a shared regulatory baseline across the US, Europe and Asia.

This convergence is equally visible in Asia Pacific. Singapore’s Monetary Authority of Singapore (MAS) requires stablecoins to be fully backed by cash, cash equivalents, or short-term sovereign debt, with reserves kept separate from the issuer’s own funds and redemption guaranteed within a defined timeframe. Hong Kong applies similar rules with strict licensing, full reserve backing, and strong audit requirements, while Japan limits issuance to regulated financial institutions such as banks and trust companies, all subject to full backing and enforceable redemption.

Ardoino pointed to differences in implementation that affect market structure. “The GENIUS Act is more conservative than MiCA. It has stronger requirements for reserves and limits the types of assets you can hold. We took part in the drafting to ensure strong consumer protections,” he said. His perspective shows how regulatory design can influence liquidity management and risk profiles without changing the overall direction of convergence.

The balance sheet is becoming the centre of the system

Across all frameworks, the balance sheet defines stablecoin credibility. GENIUS restricts reserves to high-quality liquid assets such as cash, insured deposits, and short-dated US Treasuries, which can be converted into cash quickly without material loss of value. MiCA and Asian regimes impose similar standards, alongside strict rules to ensure reserves are segregated and protected from issuer insolvency.

Katz explained how this structure operates in practice. “Every single token holder has an equal call on those reserves, wherever they sit. They are not Circle’s money; they are held for the benefit of token holders,” he said, describing a pooled reserve structure that supports redemption across markets.

Ardoino reinforced the importance of liquidity resilience at scale. “We redeemed $7 billion in 48 hours and $20 billion in 20 days,” he said, illustrating how the ability to meet large redemption requests has become central to credibility under both market pressure and regulatory scrutiny.

This approach effectively creates a narrow banking model, where every liability is matched by safe, liquid assets rather than used to fund lending. As a result, stablecoins behave more like payment instruments than traditional bank deposits.

The regulatory perimeter is shaping who controls the system

Regulation is restructuring the stablecoin ecosystem by concentrating control within supervised entities. GENIUS anchors issuance, reserve management and redemption within regulated institutions, while allowing nonbanks to provide wallets, technology infrastructure, and customer interfaces through partnerships. MiCA creates a similar layered structure, centralising issuance while enabling broader participation at the edges.

Jack McDonald, senior vice president of stablecoins at Ripple, explained how this affects institutional design. “The difference really comes down to design and oversight. Bank-issued stablecoins can be considered extensions of the banking system governed by strict banking safeguards like capital requirements, redemption rights and ongoing regulatory supervision,” he said.

Geoffrey Kendrick, global head of digital assets research at Standard Chartered, framed the strategic implications in concrete terms. “The only question is who owns that space and how regulated it is,” he said, referring to control over issuance, liquidity, payment flows, and customer relationships in future financial systems.

Ardoino highlighted the importance of interoperability within this emerging system. He expects multiple issuers to coexist but stresses that they must operate on a one-to-one basis to ensure seamless usage across networks, reinforcing the need for regulatory alignment to support global scale.

In Asia Pacific, regulators are extending this control across borders. Initiatives such as Singapore’s Project Guardian and Hong Kong’s tokenisation programmes are building shared, supervised networks that allow banks to move value across jurisdictions while maintaining regulatory oversight.

Regulation is accelerating institutional adoption

Regulatory clarity is translating into measurable institutional activity. Major global banks including JPMorgan, Citi, HSBC and DBS are piloting tokenised deposits and stablecoin-like systems at scale, integrating blockchain-based settlement into existing payment and treasury operations.

Asia Pacific sits at the centre of this shift from pilot to production. DBS, working with JPMorgan and the MAS, is building interoperability between its DBS Token Services platform and JPMorgan’s Kinexys Digital Payments network. HSBC has already executed live tokenised deposit transactions through its Tokenised Deposit Service, demonstrating real-time cross-border payments for corporate clients.

These developments mark a transition from experimentation to deployment. GENIUS, MiCA and Asian regulatory frameworks reduce legal uncertainty, define how these systems must operate, and create a pathway for stablecoins to become part of mainstream financial infrastructure.

A regulated global system for digital money is taking shape

A coordinated global framework for digital money is now emerging. GENIUS, MiCA and parallel regimes across Asia are defining how stablecoins operate within regulated finance, establishing consistent rules around reserves, redemption and supervision while enabling cross-border interoperability.

Asia Pacific is not simply adopting these frameworks but actively shaping their application. The region combines strong regulatory standards with real demand from cross-border trade, remittances, and treasury activity, and already processes large volumes of stablecoin transactions.

Rios summarised the broader implication of this transition. “This is not just about coding. It is about values,” she said, reinforcing that the future of money depends on how institutions embed trust, accountability and inclusion into financial infrastructure.

The next phase will depend less on proving the technology and more on scaling coordinated networks across jurisdictions. Banks, regulators and infrastructure providers will need to align not only on rules, but on operational standards that allow tokenised money to move seamlessly across systems while preserving the singleness of money.

At the same time, competitive advantage will shift towards those who can operate across multiple regulatory regimes without fragmenting liquidity or customer experience. Stablecoins and tokenised money will not sit alongside the financial system as an alternative—they will become part of its core operating layer, with regulation determining both the pace of adoption and the institutions that ultimately shape its structure.