The Regulatory Landscape for Stablecoins Paxos provides a comprehensive guide to global stablecoin regulation, covering US federal frameworks, MiCA in Europe, Singapore's MAS requirements, and key compliance considerations for financial institutions.
January 15, 2026
Source: Paxos

What Is the Current Global Regulatory Landscape for Stablecoins?

Stablecoin regulation has evolved rapidly across major financial jurisdictions, creating a complex but increasingly clear compliance framework for banks and financial institutions. Paxos's comprehensive analysis maps the regulatory terrain across the United States, European Union, Singapore, and other key markets.

The global trend is toward comprehensive regulation rather than prohibition, with most major economies establishing specific frameworks for stablecoin issuance, reserve requirements, and operational standards.

How Does US Federal Stablecoin Regulation Work?

The United States has established federal stablecoin regulation through the GENIUS Act, creating a dual regulatory pathway:

Federal Oversight Framework

  • Office of the Comptroller of the Currency (OCC) for national bank issuers
  • Federal Reserve for state member banks and holding companies
  • Permitted payment stablecoin issuers under new licensing regime

State Regulatory Options

  • State-chartered trust companies and banks
  • Money transmitter licenses with stablecoin-specific requirements
  • Reciprocity provisions for multi-state operations

Reserve Requirements

  • 1:1 backing with high-quality liquid assets
  • Monthly attestation requirements
  • Segregation of reserve assets from operational funds

What Are the Key Requirements Under EU MiCA Regulation?

The Markets in Crypto-Assets (MiCA) regulation provides the world's most comprehensive crypto-asset framework, effective December 2024 across all 27 EU member states:

Stablecoin Classification

  • E-Money Tokens (EMTs): Single fiat-currency referenced stablecoins
  • Asset-Referenced Tokens (ARTs): Multi-asset or commodity-backed tokens
  • Significant tokens: Enhanced requirements for tokens exceeding thresholds

Issuer Requirements

  • Authorized credit institution or electronic money institution
  • Detailed whitepaper publication
  • Reserve asset custody with EU-regulated entities
  • Capital requirements based on token classification

Operational Standards

  • Real-time reserve transparency
  • Redemption rights at par value
  • Marketing and disclosure requirements
  • Consumer protection provisions

How Does Singapore's MAS Framework Approach Stablecoin Regulation?

The Monetary Authority of Singapore (MAS) established a risk-proportionate framework in August 2023, focusing on single-currency stablecoins:

Key Framework Elements

  • Single-currency stablecoins pegged to Singapore Dollar or G10 currencies
  • Major Payment Institution (MPI) license requirement
  • Minimum base capital of S$1 million or higher based on transaction volumes

Reserve Requirements

  • High-quality liquid assets (cash, government securities, short-term deposits)
  • Daily valuation and monthly independent attestation
  • Reserve assets held with licensed financial institutions
  • Segregation from operational assets

Redemption Standards

  • Face value redemption within 5 business days
  • Clear redemption procedures disclosed to users
  • No additional fees beyond disclosed charges

What Other Jurisdictions Have Stablecoin Frameworks?

United Kingdom

  • Financial Services and Markets Act 2023 establishes foundation
  • HM Treasury developing detailed stablecoin regulations
  • Financial Conduct Authority (FCA) authorization expected for issuers
  • Focus on systemic payment stablecoins

Japan

  • Payment Services Act amendments effective June 2023
  • Bank-only model for stablecoin issuance
  • Trust companies permitted under specific conditions
  • Strong consumer protection emphasis

Hong Kong

  • Financial Services and the Treasury Bureau stablecoin framework
  • Hong Kong Monetary Authority licensing regime
  • Focus on fiat-referenced stablecoins
  • Reserve and disclosure requirements

United Arab Emirates

  • Multi-jurisdictional approach across VARA, DFSA, ADGM, SCA, and CBUAE
  • Dubai's Virtual Assets Regulatory Authority for comprehensive oversight
  • Abu Dhabi Global Market for international operations
  • Sandbox programs for innovation

What Are Common Compliance Requirements Across Jurisdictions?

Despite regional differences, several compliance themes emerge globally:

Reserve Requirements

  • Full backing (typically 1:1) with specified asset classes
  • Regular attestation or audit requirements
  • Segregation from operational funds
  • Custody with regulated financial institutions

Operational Standards

  • Anti-money laundering (AML) and counter-terrorism financing (CTF) compliance
  • Know Your Customer (KYC) procedures
  • Transaction monitoring capabilities
  • Suspicious activity reporting

Consumer Protection

  • Clear disclosure of risks and terms
  • Redemption rights and procedures
  • Marketing restrictions
  • Complaint handling mechanisms

Capital and Prudential Requirements

  • Minimum capital thresholds
  • Liquidity management standards
  • Risk management frameworks
  • Business continuity planning

What Should Financial Institutions Consider When Entering Stablecoin Markets?

Strategic Considerations

  • Jurisdiction selection based on target markets and regulatory clarity
  • Partnership vs. direct issuance models
  • Technology infrastructure requirements
  • Integration with existing payment systems

Compliance Infrastructure

  • AML/CTF program enhancements for digital assets
  • Real-time transaction monitoring capabilities
  • Reserve management and attestation processes
  • Regulatory reporting systems

Operational Readiness

  • Customer onboarding procedures for stablecoin services
  • Settlement and clearing integration
  • Custody arrangements for reserves
  • Incident response and recovery planning

The Coinbax Perspective

Paxos's regulatory mapping reveals a critical insight: the global regulatory landscape is converging toward similar principles even as implementation details vary. Reserve requirements, consumer protection, and AML compliance appear in every major framework.

For financial institutions, this convergence creates opportunity. Building compliance infrastructure that addresses common requirements—real-time reserve verification, transaction monitoring, and redemption processing—provides a foundation that works across jurisdictions.

The challenge is operational: how do you implement programmable escrow, built-in reversibility, and real-time compliance in ways that satisfy multiple regulatory frameworks simultaneously? That's the infrastructure gap Coinbax addresses—enabling banks and credit unions to participate in stablecoin markets with the controls their regulators expect.

Frequently Asked Questions

What is the primary US regulator for stablecoin issuers?

Under the GENIUS Act, stablecoin issuers may be regulated by the OCC (for national banks), Federal Reserve (for state member banks), or state regulators depending on their charter type and licensing pathway.

How do MiCA reserve requirements differ from US requirements?

MiCA requires reserves held with EU-regulated credit institutions with specific asset allocation rules, while US requirements under the GENIUS Act specify high-quality liquid assets with OCC or Federal Reserve oversight depending on issuer type.

Can non-bank companies issue stablecoins?

Yes, in most jurisdictions. The US permits payment stablecoin issuers under new federal licensing, while the EU allows electronic money institutions. Singapore requires Major Payment Institution licensing. Each path has specific capital and operational requirements.

What AML requirements apply to stablecoin issuers?

All major jurisdictions require comprehensive AML/CTF programs including customer due diligence, transaction monitoring, suspicious activity reporting, and sanctions screening. The specifics vary but the core requirements are consistent globally.