Stablecoin regulation has moved from patchwork guidance to formal law in several major markets. 

In the US, the GENIUS Act established a federal framework for payment stablecoins in July 2025. In the EU, MiCA came into full effect in 2025. Singapore, Hong Kong, Japan and the UAE have each built out their own licensing regimes.

The frameworks differ in structure, but they converge on the same core requirements: licensed issuers, audited reserves, and enforceable redemption rights. 

Here’s how stablecoin regulation works across jurisdictions.

What stablecoin regulation covers

Stablecoin regulation addresses five core elements across every major market:

• Licensed issuer: The issuing entity must hold a license or charter from a recognized financial regulator. A general business registration or securities license does not qualify.

• Reserve requirements: Tokens must be backed 1:1 by high-quality, liquid assets. Permitted assets vary by jurisdiction but typically include cash, central bank deposits and short-term government securities.

• Independent verification: Reserve holdings must be confirmed through regular third-party attestations or audits. Self-reported figures are not sufficient under any major regulatory framework.

• Redemption rights: Holders must be able to redeem tokens for the pegged fiat currency at face value, under published terms and within defined timelines.

• AML/CFT compliance: Issuers must implement Know Your Customer and anti-money-laundering controls as required by applicable law.

The specificity of each requirement differs by market. What remains consistent are the overall themes: more transparency, stricter reserve quality standards and greater accountability for issuers.

United States

The GENIUS Act, signed in July 2025, is the first federal law establishing a comprehensive regulatory framework for payment stablecoins in the US.

• Permitted issuers: Federally chartered banks, credit union subsidiaries, OCC-chartered nonbank issuers and state-licensed entities for issuers with less than $10 billion in outstanding stablecoins.

• Reserve composition: 1:1 backing in cash, deposits at federally-insured institutions, US Treasury bills with maturity of 93 days or less, repurchase agreements backed by Treasuries (7-day maturity or less), approved money market fund shares or central bank deposits.

• Monthly attestations: Conducted by a PCAOB-registered accounting firm. The issuer's CEO and CFO must personally certify accuracy.

• Threshold rule: Issuers above $10 billion in outstanding stablecoins must operate under federal oversight rather than state supervision.

• Insolvency protections: Stablecoin holders receive a super-priority claim above administrative expenses in insolvency. Reserves are excluded from the bankruptcy estate.

Before the GENIUS Act, stablecoin issuers in the US operated under a mix of state money transmitter licenses and banking licenses. State money transmitter licenses authorize the transfer of fiat currency but do not impose requirements specific to stablecoin reserves, attestation or redemption. Licenses from state banking regulators such as NYDFS apply more rigorous standards for capital, reserves and consumer protection than state money transmitter licenses.

Some OCC-regulated stablecoins include: PYUSD and USDP

European Union

The Markets in Crypto-Assets Regulation (MiCA) established a single regulatory framework for stablecoins across all EU member states. MiCA came into full effect in 2025. Dollar-pegged stablecoins issued in the EU are generally classified as e-money tokens (EMTs).

• Issuer licensing: EMT issuers must be licensed as e-money institutions or credit institutions in an EU member state.

• Reserves: Full reserves must be held in highly liquid, low-risk instruments at credit institutions, with concentration limits per institution.

• Disclosure: Regular independent audits and public reserve disclosures are required, implemented by national competent authorities.

• Redemption: Holders have the right to redeem tokens at par, at any time, on request.

• Non-euro stablecoin caps: MiCA imposes transaction volume limits on non-euro stablecoins used for payments within the EU, creating compliance pressure for dollar-pegged stablecoins at scale in European markets.

Supervision is handled by national competent authorities in each member state, such as FIN-FSA in Finland. Large issuers may also fall under joint oversight with the European Banking Authority.

Some MiCA-compliant stablecoins include: USDG, USDC, USD1

Singapore

The Monetary Authority of Singapore (MAS) regulates stablecoin issuers under the Payment Services Act.  A Major Payment Institution (MPI) licence is required for any entity issuing stablecoins out of Singapore.

MAS has also developed the Single Currency Stablecoin (SCS) framework, which applies to Singapore-dollar and G10-currency stablecoins issued in Singapore.

• Reserve standard: 1:1 in cash, cash equivalents or government securities with maturity of 3 months or less, denominated in the peg currency, held at MAS-approved custodians.

• Disclosure: Monthly independent attestations published publicly. Annual audits required.

• Redemption: Par redemption within 5 business days.

• Whitepaper: Issuers must publish a whitepaper disclosing the stabilization mechanism, reserve composition and risks.

Some stablecoins issued by MAS regulated entities and designed to align with MAS requirements include: USDG and XSGD

Other jurisdictions

• Hong Kong: The Hong Kong Monetary Authority (HKMA) introduced a licensing regime for fiat-referenced stablecoin issuers. Issuers operating in or targeting Hong Kong users must hold an HKMA license and maintain full reserve backing.

• Japan: The Financial Services Agency (FSA) regulates stablecoins under amendments to the Payment Services Act. Issuers must register and meet reserve and redemption requirements aligned with Japan's existing electronic payment framework.

• United Arab Emirates: The UAE Central Bank regulates payment tokens under the Payment Token Services Regulation. The Abu Dhabi Global Market Financial Services Regulatory Authority runs a separate licensing regime for digital assets including stablecoins issued within the ADGM free zone.

How the frameworks are converging

Despite differences in structure and implementation, the major stablecoin regulatory frameworks are converging on the same principles:

• Reserve quality: All frameworks require high-quality, liquid assets. Low-quality collateral, including most corporate bonds and crypto assets, does not qualify.

• Independent verification: Self-reported reserves are not accepted. All frameworks require third-party attestation or audit.

• Redemption rights: Holders must be able to redeem at par, within defined timelines, under enforceable terms.

• Issuer accountability: Regulators require licensed issuers to bear responsibility for reserve management and compliance.

A stablecoin that meets the requirements of one major framework does not automatically meet the requirements of another. Issuers operating across multiple markets need licenses in each jurisdiction.

Why this matters

A stablecoin issued by a licensed entity under a major framework is not the same product as one that operates without oversight. The differences are enforceable: reserve quality, redemption rights and insolvency protections are determined by the framework under which the issuer operates.

For institutions, developers and payment providers evaluating stablecoin infrastructure, understanding how regulation works in each market is a prerequisite for risk assessment.

Where Paxos fits

Paxos operates under regulatory oversight in three major jurisdictions. 

Paxos holds a national trust charter from the OCC in the United States, a Major Payments Institution license from MAS in Singapore and issues digital assets under MiCA compliance through FIN-FSA in the EU.

USDG was the first stablecoin to achieve simultaneous compliance with multiple regulatory regimes at the same time, with issuance in Singapore under MAS oversight and in Europe in compliance with MiCA.  

If you're interested in offering blockchain and digital asset solutions to your customers, Paxos can help. Contact us to learn more.

Related: What Is a Regulated Stablecoin? 

This post is provided for informational purposes only and does not constitute legal advice. Readers should consult their own legal counsel regarding any legal matters or requirements relevant to their specific situation. Paxos makes no representations or warranties regarding the legal accuracy, completeness, or suitability of the information contained herein.

Paxos makes no representations or warranties regarding the legal accuracy, completeness, or suitability of the information contained herein.