How Do Global Stablecoin Regulations Compare Across Major Jurisdictions?
EY's September 2025 comparison provides a systematic analysis of stablecoin regulatory frameworks across six major jurisdictions: United States, European Union, United Kingdom, Singapore, Japan, and United Arab Emirates. The analysis reveals both convergence in core principles and significant variation in implementation approaches.
Key Finding: While all jurisdictions require reserve backing and issuer licensing, the specific requirements for asset composition, custody arrangements, and operational standards vary considerably—creating both compliance challenges and arbitrage opportunities for global issuers.
What Are the Reserve Requirement Differences Across Jurisdictions?
Reserve requirements represent the most critical compliance consideration for stablecoin issuers:
United States (GENIUS Act)
- Backing Ratio: 100% (1:1)
- Eligible Assets: Cash, Treasury securities, insured deposits, money market funds
- Attestation: Monthly third-party attestation
- Custody: US-regulated financial institutions
European Union (MiCA)
- Backing Ratio: 100% for E-Money Tokens (EMTs)
- Eligible Assets: Bank deposits (30% max in any single institution), government securities, reverse repos
- Attestation: Real-time monitoring with periodic audit
- Custody: EU-authorized credit institutions
United Kingdom (Proposed)
- Backing Ratio: 100%
- Eligible Assets: Central bank deposits, short-term government securities
- Attestation: Regular independent verification
- Custody: FCA-authorized custodians
Singapore (MAS Framework)
- Backing Ratio: 100%
- Eligible Assets: Cash, government securities rated AA- or higher, short-term bank deposits
- Attestation: Monthly independent attestation
- Custody: Licensed financial institutions
Japan (PSA Amendments)
- Backing Ratio: 100%
- Eligible Assets: Bank deposits, government bonds
- Attestation: Bank-supervised or trust company verified
- Custody: Issuing bank or trust company
United Arab Emirates (Multi-Authority)
- Backing Ratio: 100%
- Eligible Assets: Varies by authority (VARA, DFSA, ADGM)
- Attestation: Quarterly minimum, more frequent for significant issuers
- Custody: Approved financial institutions per jurisdiction
What Licensing and Authorization Structures Exist?
Issuer Types Permitted
| Jurisdiction | Banks | Non-Bank FIs | Tech Companies |
|---|---|---|---|
| US (GENIUS) | Yes | Yes (licensed) | Limited |
| EU (MiCA) | Yes | EMIs only | No |
| UK | Yes | TBD | TBD |
| Singapore | Yes | MPIs | No |
| Japan | Yes | Trust cos. | No |
| UAE | Yes | Licensed VASPs | Licensed |
Key Observation: The EU and Japan take the most restrictive approach, limiting issuance to regulated financial institutions. The US and UAE offer broader pathways for non-bank issuers with appropriate licensing.
How Do Consumer Protection Requirements Compare?
Redemption Rights
United States
- Par value redemption required
- Timeframe: Reasonable period (to be specified in regulations)
- Fees: Disclosed fees permitted
European Union
- Par value redemption at any time
- Timeframe: Same business day for EMTs
- Fees: Prohibited for standard redemption
Singapore
- Face value redemption
- Timeframe: Within 5 business days
- Fees: Only disclosed fees permitted
Japan
- Bank guarantees redemption
- Timeframe: On demand through banking system
- Fees: Subject to banking regulations
Disclosure Requirements
All jurisdictions require:
- Clear terms and conditions
- Risk disclosure statements
- Fee transparency
- Reserve composition disclosure
Notable Differences:
- MiCA requires detailed whitepapers with specific content requirements
- US focuses on periodic disclosure rather than upfront documentation
- Singapore emphasizes ongoing disclosure of reserve composition
What AML/CTF Compliance Standards Apply?
Universal Requirements
- Customer Due Diligence (CDD)
- Transaction monitoring
- Suspicious activity reporting
- Sanctions screening
- Record-keeping (typically 5-7 years)
Jurisdiction-Specific Emphasis
United States
- Bank Secrecy Act compliance
- FinCEN registration for non-bank issuers
- Travel Rule implementation
- OFAC sanctions compliance
European Union
- 6th AML Directive alignment
- Travel Rule via Transfer of Funds Regulation
- Enhanced due diligence for high-risk customers
- Beneficial ownership verification
Singapore
- Payment Services Act AML requirements
- MAS Notice PSN02 compliance
- Travel Rule (threshold-based)
- Risk-based approach emphasized
Technology Requirements
EY highlights that regulators increasingly expect:
- Real-time transaction monitoring
- Blockchain analytics integration
- AI-powered pattern detection
- Cross-chain tracking capabilities
How Do Capital Requirements Differ?
Minimum Capital Thresholds
| Jurisdiction | Minimum Capital | Risk-Based Add-ons |
|---|---|---|
| US (Federal) | Varies by charter | Yes |
| EU (MiCA EMT) | EUR 350,000 | 2% of average reserves |
| UK | TBD | Expected risk-based |
| Singapore | S$1M+ | Volume-based scaling |
| Japan | Bank capital rules | Prudential standards |
| UAE | Varies by authority | Authority-specific |
Significant Token Requirements: MiCA imposes enhanced capital requirements for stablecoins exceeding transaction or holder thresholds, including EUR 3M minimum or 3% of average reserves.
What Operational Standards Are Required?
Governance Requirements
Common Elements:
- Board oversight of stablecoin operations
- Independent risk management function
- Internal audit coverage
- Compliance officer designation
Jurisdiction-Specific:
- MiCA requires "fit and proper" management assessment
- Singapore mandates local director requirements
- UAE requires physical presence in relevant jurisdiction
Technology and Security
Infrastructure Standards:
- Business continuity planning
- Cybersecurity frameworks
- Data protection compliance (GDPR, PDPA, etc.)
- System resilience testing
Smart Contract Requirements:
- Several jurisdictions requiring or recommending smart contract audits
- UAE (VARA) explicitly addresses algorithmic stablecoins
- MiCA prohibits algorithmic stablecoins without asset backing
What Cross-Border Considerations Apply?
Mutual Recognition and Equivalence
MiCA Approach
- Third-country issuers need EU authorization
- Equivalence decisions pending for major jurisdictions
- Reverse solicitation limited
US Approach
- GENIUS Act includes foreign issuer provisions
- "Comparable regulatory regime" determinations by Treasury
- Prohibition on non-compliant foreign stablecoins for US persons
Practical Implications
- Global issuers likely need multiple licenses
- Regulatory arbitrage opportunities limited
- Interoperability challenges across jurisdictions
The Coinbax Perspective
EY's comparison reveals the operational complexity facing financial institutions with global stablecoin ambitions. While core principles converge—full reserves, consumer protection, AML compliance—the specific requirements create a compliance matrix that demands sophisticated infrastructure.
The technology requirements are particularly telling: regulators across all jurisdictions expect real-time monitoring, blockchain analytics, and AI-powered compliance. These aren't future requirements—they're current expectations.
For banks and credit unions, the question isn't whether to build this infrastructure, but how to build it efficiently across multiple regulatory frameworks. Programmable escrow, built-in reversibility, and real-time compliance provide a foundation that addresses common requirements while accommodating jurisdiction-specific variations.
The institutions that build this capability now—before the final implementing regulations land—will define how stablecoin payments work in practice.
Frequently Asked Questions
Which jurisdiction has the most comprehensive stablecoin regulation?
The European Union's MiCA regulation is currently the most comprehensive, covering issuance, reserves, consumer protection, and market conduct in a single framework. The US GENIUS Act provides comparable scope but delegates more implementation details to regulators.
Can a stablecoin licensed in one jurisdiction operate globally?
Not automatically. Most jurisdictions require local licensing or equivalence determinations. MiCA allows EU-wide passporting, but third-country issuers need separate authorization. Global issuers typically need licenses in each major market.
How do reserve requirements compare to traditional banking?
Stablecoin reserve requirements are generally more restrictive than traditional banking. While banks operate with fractional reserves under capital adequacy rules, stablecoin issuers must maintain 100% backing with liquid assets in most jurisdictions.
What technology investments do stablecoin regulations require?
Key technology requirements include real-time reserve monitoring systems, blockchain analytics for transaction monitoring, KYC/AML infrastructure capable of handling digital asset customers, and smart contract audit capabilities. Most jurisdictions expect these capabilities at launch.
How are algorithmic stablecoins treated?
Most jurisdictions either prohibit algorithmic stablecoins (MiCA) or don't provide specific frameworks for them. Regulatory focus is on asset-backed stablecoins with verifiable reserves. Issuers exploring algorithmic approaches face significant regulatory uncertainty.