19 November 2025 | 10:41PM KST Equity Research ASIA FINTECH Assessing the lie of the land for Stablecoins in Asia-Pacific On the heels of the GENIUS Act, passed in July 2025, and a handful of stablecoin IPOs in the US, many Asia-Pacific countries are actively reviewing whether and how to introduce their own local currency stablecoins. As our Americas Fintech analysts have set out in their deep-dive report, the potential opportunities are large, but still very much in an evolutionary phase. In Asia Pacific, ...

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]