Asia’s stablecoin race is dividing between bank-backed domestic currencies and US dollar–pegged tokens as Japan, Singapore, and Hong Kong roll out new regulations shaping how crypto can operate alongside regional monetary policies.
The rivalry is heating up, highlighted by Japan’s plan for a major bank consortium and China’s restrictions on Hong Kong initiatives. These moves underscore the hurdles private companies face under existing regulatory frameworks.
Asia’s competition for stablecoins intensifies igniting debate among individuals
Experts view Asia’s competition for stablecoins as a way to gauge how much freedom governments will permit private systems to make adjustments to national money frameworks while still keeping control over financial movements.
During an interview, the vice president of partnerships at Kaia DLT Foundation, John Cho pointed out that several lawmakers and regulators across Asia are seeking to accelerate the introduction of specific laws and regulations particularly for crypto and stablecoins.
“There is real enthusiasm throughout the region for the improvements stablecoins can bring to traditional systems,” he added.
Despite these assertions, sources have noted that the situation also stresses a “divide” among regulators and lawmakers in Asia. To illustrate this, Cho mentioned that one group believes that only established institutions have the right to handle the creation of stablecoin and reserve management. On the other hand, another group raises concerns about this approach stating that it could act as an obstacle to innovation and slow down growth and adoption.
To break down Asia’s competition, Japan’s project involves MUFG, SMBC, and Mizuho joining forces to introduce a yen-pegged coin. For the coin’s launch, they aim to use MUFG’s Progmat platform and launch it by March of next year, according to a report from Nikkei.
This move aligns with Japan’s intentions to widen the scope of its regulations to include digital assets. One proposed regulation aims at stopping insider trading in cryptocurrency, granting securities regulators the power to investigate illegal activities.
In the meantime, in China, the government is adopting a different approach by instructing big tech firms to halt their stablecoin initiatives in Hong Kong.
This decision comes after companies such as Standard Chartered, Animoca Brands, and HKT Group formed Anchorpoint Financial last August to seek a license for issuing stablecoins under the city’s new digital asset regulations.
Asia firms demonstrate commitment to explore the stablecoin ecosystem
StraitsX based in Singapore carries out its operations with full oversight from the Monetary Authority of Singapore. At the end of September it had its SGD-backed XSGD token listed on Coinbase.
Meanwhile, Tether has been expanding its reach in Asia too with the launch of USDT on the Kaia blockchain for South Korean ATMs in July and connecting it with LINE’s regional ecosystem.
Dermot McGrath, co-founder of venture capital firm Ryze Labs commented on the situation. He acknowledged that Asia is transitioning from planning policies to carrying out controlled implementations.
In Japan, the development will be steady and measured, while Hong Kong will keep a close eye on Beijing’s limits. On the other hand, Singapore aims to focus on some important issuers as it utilizes its trust benchmark to introduce stablecoin products.
McGrath noted that regulators “want to maintain control, but financial institutions also do not want to remain inactive for too long.”
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Source: https://www.cryptopolitan.com/asia-divided-on-stablecoins/