The year 2025 has cemented a global theme of regulatory maturity, with leading financial hubs introducing clearer frameworks to support innovation in digital assets and private markets while protecting investors.In the UK, the Financial Conduct Authority (FCA) gave its approval to the London Stock Exchange (LSE) to operate the first Private Intermittent Securities and Capital Exchange System (PISCES) platform. This marks a new type of regulated private stock market, designed to facilitate intermittent tradi ...

Amid an intensifying international focus on stablecoins, the International Monetary Fund (IMF) has released a 56-page report detailing what it sees as the key risks surrounding their adoption. The report draws parallels from the claims many other central banks and international financial organizations make regarding the threat stablecoins represent to governmental monetary control, to ultimately argue in favor of Central Bank Digital Currencies (CBDC). “Currency substitution facilitated by stablecoin ado ...

Core Insights - Stablecoins have the potential to enhance access to financial services for individuals, but they may pose risks to central banks and financial sovereignty according to the International Monetary Fund (IMF) [1][2] Group 1: Impact on Financial Sovereignty - The IMF identifies "currency substitution" as a risk associated with stablecoins, which could gradually erode the financial sovereignty of nations [1] - The use of foreign currency-denominated stablecoins, particularly in cross-border transactions, may undermine monetary sovereignty, especially with the presence of unhosted wallets [2][3] - A significant shift in economic activity away from a nation's currency could reduce a central bank's control over domestic liquidity and interest rates [3] Group 2: Competition with Central Bank Digital Currencies (CBDCs) - Foreign currency-denominated stablecoins could become entrenched in payment services, making it difficult for local alternatives like CBDCs to compete [4] - CBDCs are defined as digital forms of sovereign currency issued and managed by central banks, contrasting with privately issued stablecoins [4] Group 3: Current Market Dynamics - As of now, stablecoins denominated in U.S. dollars account for 97% of the $311 billion stablecoin market, with euro-denominated stablecoins valued at $675 million and those linked to the Japanese yen at $15 million [5] - The IMF notes that stablecoin adoption is increasing in regions such as Africa, the Middle East, Latin America, and the Caribbean, which may affect central banks' ability to influence monetary policy [4] Group 4: Recommendations for Safeguarding Monetary Sovereignty - To protect monetary sovereignty, the IMF recommends that countries establish frameworks to prevent digital assets from being recognized as official currency or legal tender [6]

Summary of the Conference Call on Stablecoins in Asia-Pacific Industry Overview - The report focuses on the evolving landscape of stablecoins in the Asia-Pacific region, particularly in light of the GENIUS Act passed in July 2025 and recent stablecoin IPOs in the US [1][2] - Many Asia-Pacific countries are considering the introduction of local currency stablecoins, but the regulatory framework is still in development [1][2] Key Insights - **Regulatory Landscape**: The regulatory environment for stablecoins is rapidly evolving, with countries like Singapore, Australia, and Japan already having frameworks in place for stablecoin issuance [11][20] - **Adoption Potential**: Korea, Singapore, and Hong Kong are identified as having the highest potential for stablecoin adoption due to their familiarity with crypto and high cashless payment rates [3][10] - **Market Size**: The USD-denominated stablecoin market cap is approximately $300 billion, while Asia currency-based stablecoin market cap is only around $49 million, indicating significant room for growth [9] Opportunities and Challenges - **Cross-Border Payments**: Stablecoins present a natural opportunity for cross-border payments, with potential transaction cost reductions of 60-80% compared to traditional systems [29] - **Corporate Interest**: Corporates are beginning to shift their focus towards stablecoins, with some already signing agreements for stablecoin transactions [2][40] - **Financial Institutions' Response**: Local banks are becoming increasingly aware of the risks posed by stablecoins, particularly regarding FX commissions and trade finance earnings [40] Regulatory Developments - **Australia**: The RBA is exploring the role of stablecoins through Project Acadia, focusing on the development of a Central Bank Digital Currency (CBDC) [17] - **Korea**: The Bank of Korea emphasizes the need for traditional banks to lead stablecoin initiatives to ensure monetary policy efficacy [17] - **Hong Kong**: The Stablecoins Ordinance requires a license for stablecoin issuance, with 36 applications received by the HKMA as of September 2025 [17] - **China**: The PBOC maintains a cautious stance towards stablecoins, focusing on the promotion of the digital yuan instead [18] Market Dynamics - **Demographics**: Countries with a higher share of younger populations and foreign workers are expected to drive demand for stablecoins, particularly for cross-border remittances [10][11] - **Technological Adoption**: Advanced digitization in Asia, characterized by a young population of "digital natives," supports higher adoption rates for stablecoins [6] Financial Institutions' Initiatives - Financial institutions are adapting to the changing landscape by exploring partnerships and developing blockchain-based solutions for stablecoin transactions [63] - Examples include POSCO International's collaboration with JPMorgan Kinexys for a blockchain-based global payment system and Mitsubishi Corporation's plans to use JPY-pegged stablecoin for internal payments [45] Conclusion - The stablecoin ecosystem in Asia-Pacific is still in its early stages, but the potential for growth is significant as regulatory frameworks develop and corporates begin to adopt these digital currencies [1][2][9]

Core Insights - Kyrgyzstan has launched a new stablecoin, KGST, pegged 1:1 to the national currency, the som, as part of its strategy for broader crypto adoption [1][7] - The government plans to pilot a central bank digital currency (CBDC) and establish a national crypto reserve [1][7] Group 1: Stablecoin Launch - The stablecoin KGST operates on the BNB Chain, with BNB likely to be included in the future national crypto reserve [2] - The crypto committee in Kyrgyzstan is responsible for ensuring KGST's listing on international exchanges and proposing a national crypto reserve within two months [3] Group 2: CBDC Pilot - The National Bank of the Kyrgyz Republic will conduct a three-phase pilot of the digital som, starting with interbank transfers and progressing to government and social payments [4][5] - The final phase will test offline and low-connectivity transactions before a national rollout, with a decision on the CBDC issuance expected by 2026 [5] Group 3: Education and Innovation - President Japarov has directed the Ministry of Science and Higher Education to develop digital financial literacy programs and train specialists in blockchain and AI [6]

Core Insights - India's financial landscape is undergoing a transformation with the potential adaptation to stablecoins, as highlighted by Finance Minister Nirmala Sitharaman, who emphasized the need for nations to adapt to new monetary architectures or risk exclusion [3][4][7] Regulatory Environment - Historically, India's courts and financial regulators have aimed to suppress cryptocurrency activities, with the Reserve Bank of India (RBI) opposing digital assets and warning against the risks posed by stablecoins [1][4][5] - The RBI has expressed concerns that stablecoins could fragment India's financial infrastructure and weaken the existing digital payment system [4][5] Central Bank Digital Currency (CBDC) and Tokenized Deposits - The RBI is actively piloting its Central Bank Digital Currency (CBDC), the e-rupee, which has been in a large-scale pilot for three years, covering both retail and wholesale transactions [6][7] - The RBI's latest initiative involves commercial banks exploring tokenized deposits, which are seen as a middle ground between stablecoins and CBDCs, being privately owned and fully backed by bank deposits [6][8]

Core Insights - India is set to launch its own digital currency backed by the Reserve Bank of India (RBI), aiming to integrate blockchain technology into its financial ecosystem [1] - The initiative is designed to enhance transaction speed, safety, and transparency, operating under full government backing similar to regulated stablecoins in the US [2] - The Indian government remains cautious about privately issued digital currencies like Bitcoin, emphasizing the need for sovereign backing [3] Digital Currency Initiative - The new digital currency will allow for verifiable transactions, reducing the potential for illegal or untraceable transfers [2] - The RBI has consistently warned about the risks posed by unregulated digital assets and advocates for a Central Bank Digital Currency (CBDC) as a regulated alternative [4] Regulatory Environment - India has intensified its crackdown on crypto activities without a comprehensive regulatory framework, fearing that legitimizing crypto could make it systemic and harder to control [5] - Current taxation on crypto profits is set at a flat 30%, with a 1% Tax Deducted at Source (TDS) on transactions exceeding specific thresholds, and investors cannot offset crypto losses against other income [6] - Reports indicate that several Indian users have experienced bank account freezes related to peer-to-peer crypto transactions under investigation [6]

Core Insights - The number of cryptocurrency millionaires globally has surged to 241,700, marking a 40% increase in just 12 months, driven primarily by a 70% rise in Bitcoin millionaires, reaching 145,100 holders [1] - The total market valuation of Bitcoin has skyrocketed to $3.3 trillion, a 45% increase year-over-year as of June 2025 [1] - The number of cryptocurrency billionaires has risen to 450, a 38% increase, while those with over $1 billion in crypto assets have increased by 29% to 36 individuals [1] Group 1: Market Dynamics - Bitcoin is evolving from a speculative asset to a foundational currency for wealth accumulation, as noted by industry leaders [2] - The shift towards Bitcoin as collateral reflects a significant transformation in the financial landscape, highlighting the tension between traditional and digital currency systems [2] - Over 100 economies are exploring central bank digital currencies, with 49 already in pilot phases, indicating a trend towards state-supported digital payment methods [2] Group 2: Regulatory Environment - The Henley Crypto Adoption Index evaluates 29 investment migration programs based on six key parameters, including public adoption and regulatory environment [3] - Singapore ranks highest in infrastructure adoption and regulatory environment, followed by Hong Kong and the United States, which excel in public adoption and innovation [3] - The UAE received a perfect score for tax friendliness, implementing a zero tax rate on crypto transactions, staking, and mining activities [3] Group 3: Investment Opportunities - Countries like Luxembourg and Portugal are attracting crypto investors with favorable tax policies, such as capital gains tax exemptions for long-term holders [4] - Nations like Monaco are appealing to wealthy crypto holders with zero personal income tax policies [5] - Several countries, including Thailand and Malaysia, are implementing policies to attract digital asset investors, such as capital gains tax exemptions and digital free trade zones [5]

Investment Rating - The report does not explicitly provide an investment rating for the stablecoin industry Core Insights - The US Congress is developing regulations to promote the sound development of stablecoins, reflecting strong support from the Trump administration for crypto assets and aiming to maintain the US dollar's dominance as the world's currency [2][5][6] - The GENIUS Act establishes a regulatory framework for stablecoins, requiring issuers to maintain reserve assets and disclose information about their reserves [4][7][8] - The stablecoin market is projected to expand significantly, potentially reaching $2 trillion by the end of 2028, driven by the demand for USD-pegged stablecoins [15][17] Summary by Sections Regulatory Developments - The US Senate passed the GENIUS Act, which aims to create a regulatory framework for stablecoins, requiring issuers to be approved by authorities and maintain reserves of highly liquid assets [4][5][7] - Issuers must disclose reserve asset information monthly, with additional requirements for those with a market capitalization exceeding $50 billion [8][9] Market Dynamics - Major US retailers and travel companies are considering issuing USD-pegged stablecoins, which could lead to competition with banks and impact their fee income from credit card transactions [11][12][13] - The current global stablecoin market is dominated by USD-pegged stablecoins, which account for over 90% of transactions [16] Economic Implications - The promotion of USD-pegged stablecoins is seen as a strategy to maintain the dollar's status as the world's reserve currency, potentially stabilizing the US Treasury bond market by increasing demand for these bonds [15][18][19] - The issuance of stablecoins could lead to increased foreign investment in US Treasuries, contributing to the stability of the dollar [20][21] Historical Context and Risks - The report draws parallels with the abandoned Libra project, highlighting potential risks associated with expanding stablecoin use for international payments [23][24][32] - Concerns exist regarding the ability of authorities to effectively supervise privately issued stablecoins and prevent financial crimes [28]