The Singapore Law Gazette

A New Global Standard for Stablecoins?

The US GENIUS Act and what it means for Singapore

1. Introduction

Stablecoins – cryptographic tokens engineered to maintain a stable value pegged to a reference asset have emerged as one of the most consequential innovations in the digital asset ecosystem, with the size of the global stablecoin market reaching $280 billion in September 2025 (Ocampo, 2025, p. 3). Yet despite their rising prominence, until recently stablecoins have operated largely within a framework characterised by legal and regulatory uncertainty.

The passing of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) in July 2025 was a watershed moment in this regard, establishing a comprehensive regulatory framework for stablecoins in the United States. However, the GENIUS Act is neither the earliest nor the only stablecoin-specific legislation. Other major jurisdictions have developed their own regulatory stablecoins frameworks. This article examines the key provisions of the GENIUS Act, compares them against stablecoin regulations in the European Union (EU), Hong Kong, and Singapore, and evaluates the implication for the stablecoin industry in Singapore.

2. What are stablecoins?

Cryptocurrencies were originally conceived as decentralised alternatives to state-issued money. In practice, however, the significant price volatility of many cryptocurrencies has prevented them from functioning reliably as money. As the core functions of money—providing a stable unit of account, store of value, and medium of exchange—require some degree of price stability. Critically, what is required is price stability, not merely the absence of volatility as steady appreciation or depreciation undermines an asset’s utility as a medium unit of account and medium of exchange and a unit of account. Stablecoins were conceived to address these limitations by stabilising their value, thereby enabling them to function as money (Ehrentraud et al., 2021).

Broadly, stablecoins maintain price stability in one of two ways. Collateralised stablecoins hold reserves—typically the reference asset or assets denominated in it—to sustain a fixed peg. Algorithmic stablecoins use programmatic adjustments to supply and demand to stabilise price. Stablecoins may be issued by private entities or, in the case of central bank digital currencies (CBDCs) central banks. However, as CBDCs raise distinct regulatory and policy considerations they are outside the scope of this article.¹CBDCs constitute a liability of the central bank and are designed to carry the full faith and credit of the state, distinguishing them fundamentally from privately-issued stablecoins backed by collateral reserves.

Further, although most stablecoins do not pay interest to holders, some issuers have started to offer yield-bearing stablecoins. (Ocampo, 2025)

Stablecoins have achieved significant market penetration, accounting for approximately 70% of all transaction volume on public blockchains (Carter, 2023). Furthermore, their use now extends beyond crypto-native settings. For instance, they increasingly employed for remittance payments, offering near-instant settlement at substantially lower cost than traditional transfer methods. (Odinet & Tosato, 2025, p. 4).

In addition, stablecoins offer the advantage of being programmable, allowing issuers to embed conditions—such as tokens redeemable only for specific goods, services, or within defined jurisdictions (Bank of England, 2021). However, as of time of writing this feature has not played a significant role in the uptake of stablecoins.

3. What are the regulatory concerns and legal issues?

The growing role of stablecoins has given rise to significant regulatory and policy concerns (Arner et al., 2020; FSB, 2020, pp. 12–16). An important issue is monetary sovereignty. As widespread stablecoin adoption may erode a nation’s control over its money supply, weaken the transmission of monetary policy and, in turn, threaten macroeconomic stability.

There are also financial stability concerns. Like banks or money market funds, stablecoins are exposed to run risk—the possibility that large numbers of holders may simultaneously seek redemption, exhausting reserves and causing systemic stress. These risks are amplified by the increasing interlinkages between stablecoins and traditional financial institutions (Irrera, 2023). Moreover, because of network effects, a single stablecoin may achieve disproportionate market dominance. A disruption affecting such a stablecoin could cascade through the financial system, impacting a wide-range of users and potentially triggering broader instability (FSB, 2020, pp. 14–16).

Investor protection is another concern, particularly in relation to the quality and composition of reserves. Stablecoin issuers earn revenue not only from fees and ancillary services, but also from interest on reserve-assets. This creates incentives to seek higher-yielding, less liquid instruments. The elevated interest rate environment since 2022 has further changed the economics of reserve-backed stablecoins, with major issuers such as Tether and Circle generating substantial profits from holdings of short-term US Treasury securities(Odinet & Tosato, 2025, p. 4).

A further risk arises from stablecoin issuer’s insolvency. Reserve-assets may fall within the issuer’s insolvency estate, and stablecoin-holders may be subordinated to other creditors. (Odinet & Tosato, 2025, pp. 10–11). Regulators are also concerned about the potential misuse of stablecoins for sanctions evasion, money laundering and other financial crimes (Phang, 2024, pp. 73–74)

A further complication concerns the legal classification of stablecoins. Classification is critical because it determines which regulatory regime applies and which authority has oversight. The term “stablecoin” has no defined legal meaning, thus before the enactment of stablecoin-specific legislation to determine a stablecoins legal classification, regulators were forced to draw analogies with existing categories such as commodities, securities or investment funds. (Phang, 2024, p. 77) Yet stablecoins display features that can be aligned with several legal classifications, and different regulators have reached different conclusions as to their treatment (FSB, 2020, p. 38).

While brief, this overview makes it clear that legal clarity for the status of stablecoins was essential.

4. GENIUS Act Overview

The GENIUS Act, signed into law on 18 July 2025, takes effect on the earlier of 18 months after enactment or 120 days following issuance of final implementing regulations. The Act applies to payment stablecoins, defined as digital assets that are not national currencies, deposits, or securities and are “designed to be used as a means of payment or settlement”; where the issuer is obligated to “convert, redeem, or repurchase [the digital asset] for a fixed amount of monetary value” and “represents that such issuer will maintain, or create the reasonable expectation that it will maintain, a stable value relative to the value of a fixed amount of monetary value” (s.2(22)). These definitional requirements preclude algorithmic stablecoins from qualifying as payment stablecoins, thereby excluding them from the Act’s scope.

The Act prohibits anyone other than a permitted payment stablecoin issuer (PPSI) from issuing stablecoins in the United States (s.3). To qualify as a PPSI, an issuer must be a U.S. entity and fall into one of the following categories:

1. a subsidiary of an insured depository institution (s.2(23));
2. a non-bank entity, an uninsured national bank, or a foreign bank operating under the authority of the OCC (s.2(11)); or
3. an entity approved by a state payment stablecoin regulator (section 2(31)).

These entities may apply to the relevant regulator for approval as PPSIs (s.5). Approval is conditional on meeting prescribed standards, including the ability to satisfy redemption obligations (s.5(A)(2)(c)(4)) and any further requirements the relevant regulator considers necessary to ensure the safety and soundness of the issuer. The details of which will be set out in secondary legislation (s.5(A)(2)(c)(4)).

Payment stablecoins issued by PPSI are neither securities nor commodities (s.17), thereby excluding them from the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the Act, the relevant regulator is determined by the classification of stablecoin issuer. Insured depository institutions and credit union subsidiaries that issue payment stablecoins are subject to supervision by their primary financial regulators, whereas federally-licensed non-bank payment stablecoin issuers fall under the jurisdiction of the Office of the Comptroller of the Currency (OCC) (s.2(25)).

PPSIs must maintain reserves with a 1-1 backing of outstanding stablecoins in high-quality liquid assets, such as the US dollars, federal reserve deposits, treasury securities with maturity of 93 days or less, and overnight repurchase agreements backed by treasury securities (s.4(a)(1)(A). Rehypothecation of reserve assets is prohibited (s.4(a)(2)).

The Act further imposes disclosure requirements where issuers must publicly disclose their redemption policies and their reserve composition (s.4(a)(1)(B)). In addition, issuers must obtain a monthly attestation from a registered public accounting firm on the adequacy of their reserves, and the issuer’s CEO and CFO must certify that adequacy to the relevant regulators (s.4(a)(3)). The Act also prohibits stablecoin issuers from paying interest or yield to token holders (s.3(11)).

Non-U.S. stablecoins may be offered in the United States only where the foreign issuer is subject to a regulatory regime that is “comparable” to the requirements applicable to PPSIs (s.18).

4.1 Proposed Legislation

In addition to the GENIUS Act, the proposed Digital Asset Market Clarity Act (CLARITY Act) passed the House of Representatives in July 2025. ²At the time of writing it has not become law. The Bill seeks to clarify jurisdictional boundaries between the CFTC and SEC by distinguishing between “digital commodities” (regulated primarily by the CFTC) and “investment contract assets” (remaining under SEC oversight). Notably, the CLARITY Act explicitly excludes payment stablecoins as defined in the GENIUS Act from securities laws, reinforcing the regulatory framework created by the GENIUS Act.

Separately, the proposed Anti-CBDC Surveillance State Act also advanced through the House in July 2025. Its central purpose is to prohibit the Federal Reserve from issuing, piloting or operating a retail CBDC unless expressly authorised by Congress.

3. European Union

The European Union’s Markets in Crypto-Assets Regulation (MiCAR) reached full implementation on 30 December 2024. Although MiCAR does not use the term stablecoin, it regulates stablecoin issuers through two token categories: Electronic Money Tokens (EMTs) and Asset-Referenced Tokens (ARTs).

EMTs reference a single official currency (art.3(1)(7)), whereas ARTs reference a basket of currencies or other assets (art.3(1)(6)). EMT issuers must be authorised credit institutions or electronic money institutions (art.48(1)) and are subject to the same issuance and redemption requirements that apply to traditional electronic money under the Directive 2009/110/EC (Electronic Money Directive 2), including that reserves must be held in secure, low-risk assets (art.48(3)).³As required under the Electronic Money Directive 2.

ARTs are subject to additional safeguards. An ART issuer must be a credit institution or an entity established in the EU and authorised by the competent authority of its home Member State (art.16). ARTs must be fully backed by secure, low-risk and highly liquid assets that are segregated from the issuer’s own funds (art.36). The precise definition of “low-risk, highly liquid assets” will be set out in secondary legislation in technical standards.⁴A draft of which has been published: Draft Regulatory Technical Standards to further specify the liquidity requirements of the reserve of assets under Article 36(4) of Regulation (EU) 2023/1114, henceforth ‘EBA Liquidity Requirements, 2023’.

Holders of EMTs and ARTs have the right to redeem their tokens at any time, free of charge. EMT holders have the right to redeem their tokens at par value (art.49(4)). ART holders have the right to redemption at the market value of the assets referenced by the asset- referenced token or by delivering the assets referenced by the token (art.39). Issuers of EMTs and ARTs as well as crypto-asset service providers are prohibited from granting interest in relation to EMTs and ARTs (arts.50 and 40).

When EMTs and ARTs reach certain thresholds—such as large user bases, high transaction volumes, or significant market capitalisation—they are classified as “significant” tokens (arts.43 and 56). These tokens face enhanced requirements and come under the supervision of the European Banking Authority.

MiCAR also imposes conduct obligations on stablecoin issuers, including duties to operate honestly, fairly and professionally, with governance standards covering conflicts of interest and risk controls (MiCAR, ch.2, title III and Electronic Money Directive 2.)

4. Hong Kong

Hong Kong’s Stablecoins Ordinance (Cap. 656) (the ‘Ordinance’) took effect 1 August 2025. The Ordinance applies to “Specified Stablecoins”, which are a digital representation of value which purports to maintain a stable value with reference to one or more “official currencies” or to one or more “units of account” or “stores of economic value” as may be specified by the Hong Kong Monetary Authority (HKMA) (s.4). Official currencies are currencies issued by a government, central bank, monetary authority or authorised note-issuing bank of a jurisdiction (s.4). The Ordinance expressly excludes from the definition of stablecoins, “a digital representation of value … issued by – a central bank” (s.3(2)), hence CBDCs cannot be Specified Stablecoins.

Under the Ordinance, a licence is required to issue specified stablecoins in Hong Kong, or to issue stablecoins outside Hong Kong that reference the Hong Kong Dollar (s.5(1)). To obtain a licence, an issuer must be a company or an authorised institution incorporated outside Hong Kong (s.3) and meet the “minimum criteria” set out in schedule 2. The Specified Stablecoin must be fully backed by segregated reserves, which must be in “high quality and high liquidity [assets] with minimal investment risk” (sch.2, s.5) and must be “at least equal to the par value of the outstanding specified stablecoins of the type in circulation” (sch.2, s.5(2)). Additionally, reserve assets must undergo independent audits (sch.2, s.5(6)(b)), with regular reporting to the HKMA (sch.2, s.5(7)). Further, issuers must meet capital requirements, including a minimum paid-up share capital of HK$25 million (sch.2, s.4(2)(a)), and are prohibited from paying interest on holdings (sch.2, s.15(1)).

5. Singapore

The Monetary Authority of Singapore (MAS) treats stablecoins as “digital payment tokens” under the Payment Services Act 2019 (PSA) (MAS, 2024, paras 23.1-23.8). In August 2023, MAS introduced a specific regulatory framework for single-currency stablecoins (SCS) (MAS, 2023). A SCS is a stablecoin pegged to the Singapore Dollar or a currency of other advanced G10 economies (MAS, 2023, para. 2.1)⁵The G10 currencies are the Australian Dollar, British Pound Sterling, Canadian Dollar, Euro, Japanese Yen, New Zealand Dollar, Norwegian Krone, Swedish Krona, Swiss Franc and the United States Dollar. issued in Singapore (MAS, 2023, para.5.4,). Under this framework, issuers of compliant stablecoins can apply to MAS for recognition as ‘MAS-regulated stablecoins’. The framework does not prohibit other stablecoins from being issued, and such stablecoins continue to be governed under the PSA (MAS, 2023, para.2.4).

To be ‘MAS-regulated stablecoins’, issuers must maintain reserves with a value equal to 100% of the outstanding stablecoins in circulation (MAS, 2023, para.3.5), in highly-liquid, low-risk assets (MAS, 2023, Annex A,), held in segregated account (MAS, 2023, para.3.8). An independent monthly attestation must be obtained that the reserve-assets meet the relevant requirements (MAS, 2023, para.3.10). Issuers must also maintain a minimum base capital of S$1 million or 50% of annual operating expenses (MAS, 2023, para.3.11) and cannot engage in non-issuance businesses such as lending or staking. SCS-holders have the right to redeem their tokens at par value within five business days (MAS, 2023, para.4.3).

6. Ramifications

The GENIUS Act is likely to be a positive development for the stablecoin industry. By creating a dedicated legal regime, it may encourage wider use of payment stablecoins in mainstream finance and increase retail participation. It also provides greater legal certainty, most notably by clarifying that payment stablecoins are neither commodities nor securities.

Yet the GENIUS Act is not free from ambiguities, and some issues may ultimately need to be addressed in secondary legislation. For example, the Act provides that payment stablecoins issuers have the obligation “to convert, redeem, or repurchase [tokens] for a fixed amount of monetary value” (sec.2(22)(A)(ii)(I)), however, the Act does not specify to whom the obligation is owed (Odinet & Tosato, 2025, p. 17).

the Act permits reserves to be held as deposits without restricting the type of deposit (s. 4(1)(A)(ii)). As a result, uninsured deposits—or deposits exceeding insurance limits—may qualify as acceptable collateral. This is problematic because, in a period of stress, such deposits may not be available for redemption, creating a direct linkage between stablecoins and potential bank failure (Liang, 2025). This risk is not theoretical. In 2023, Circle’s USD Coin broke its peg to the US dollar due to its exposure to the failed Silicon Valley Bank (Capoot, 2023). However, Section 4(1)(A)(ii) states that this provision is “subject to limitations established by the [FDIC] and the [NCUA] … to address safety and soundness risks”. Hence, there is the possibility that this issue will be resolved through secondary legislation (Liang, 2025)

A further issue concerns assets held under repurchase agreements. Although the GENIUS Act grants stablecoin-holders priority over other creditors in case of issuer insolvency (s.11(d)), collateral transferred under a repurchase agreement may become part of the counterparty’s estate and the US Bankruptcy Code provides a safe-harbour for assets held under a repurchase agreements, from an automatic stay on the liquidation of, potentially allowing a counterparty to liquidate such assets despite. As such, these assets may fall outside the pool available to stablecoin-holders, notwithstanding the priority created by the Act (Liang, 2025).

Perhaps the greatest area of uncertainty concerns the payment of interest on payment stablecoins. Unlike MiCAR, which prohibits both issuers and crypto-asset service providers from paying interest (Articles 40 and 50), the GENIUS Act only prohibits issuers from doing so (s.3(11)). These interest-bearing arrangements may result in blurring the line between payment stablecoins and investment products such as money market funds (Ocampo, 2025).

Similar ambiguity exists in other jurisdictions. In Singapore, MAS imposes business restrictions on SCS-issuers to ensure that holders “are not exposed to additional risks, including through offering of other business services such as staking or lending, where interest is paid to customers,” suggesting that issuers cannot pay interest. However, it is unclear whether third parties may do so. Further legislation may clarify this point (Ocampo, 2025, p. 9).

While overall GENIUS Act is likely to be a positive for the stablecoin industry, the Act may result in payment stablecoin issuers having to change their reserve-assets. For instance, Tether’s reserves consist of only ca. 70% of “Cash & Cash Equivalents & Other Short-Term Deposits”, the remainder is made up of corporate bonds, precious metals, Bitcoin, other investments and secured loans (Tether, 2025). To have Tether tokens recognised as payment stablecoins under the Act, it seems its reserve composition would need to change.

From a global perspective, and while important jurisdictional differences persist, several common principles are emerging across major stablecoin regulatory frameworks. This convergence should make it easier for stablecoin issuers and service providers to operate internationally. First, there is a move towards 1:1 collateralisation with high-quality, liquid assets. These reserves must be held separately from the issuer’s own assets—often in bankruptcy-remote structures—and independently verified. Secondly, stablecoin issuers are required to implement anti-money laundering measures comparable to those in traditional financial services. Thirdly, stablecoin issuance is increasingly restricted to licensed entities, typically banking institutions or specialised digital asset firms that meet capital and governance requirements. Regulators are also limiting the permitted activities of issuers, with many regimes prohibiting them from engaging in services other than stablecoin issuance and redemption as well as prohibiting interest on stablecoins.

However, important differences remain. For instance, overall, the GENIUS Act is more lenient towards stablecoin issuers. than MiCAR. A clear example is that MiCAR imposes conduct obligations on issuers, whereas the GENIUS Act does not. In this respect, the GENIUS Act is closer to Singapore’s stablecoin regime, which emphasises caveat emptor and seeks to achieve investor protection primarily through disclosure requirements (Phang, 2024, p. 86).

Monetary sovereignty may turn out to be a significant point of contention. The GENIUS Act permits only US-dollar-denominated assets as reserves. This is likely to reinforce the US dollar’s position as the dominant global reserve currency—indeed, this is an explicit policy objective of the Act (White House, 2025). However, such dollar dominance is likely to heighten concerns about monetary sovereignty in other jurisdictions (Schaaf, 2025)

7. Conclusion

Whilst the GENIUS Act is a US statute, the size and importance of the US stablecoin market mean it is likely to have global significance. The Act’s core regulatory principles are broadly aligned with those underpinning MAS’s SCS framework. In this respect, the GENIUS Act may be viewed as lending support to the regulatory approach adopted by MAS. However, the full impact of the GENIUS Act can only be assessed once the relevant secondary legislation has been enacted.

References

Legislation and Bills

US:

United States Congress. (2025). Guiding and Establishing National Innovation for U.S. Stablecoins Act or the “GENIUS Act”, Pub. L. No. 119-27, 139 Stat. 419 (July 18, 2025). Retrieved from https://www.congress.gov/bill/119th-congress/senate-bill/1582

United States Congress. (2025). Digital Asset Market Clarity Act of 2025, H.R. 3633, 119th Cong. Retrieved from https://www.congress.gov/bill/119th-congress/house-bill/3633/text

United States Congress. (2025). Anti-CBDC Surveillance State Act, H.R. 1919, 119th Cong. Retrieved from https://www.congress.gov/bill/119th-congress/house-bill/1919/text

EU:

European Parliament & Council of the European Union. (2023). Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets (MiCAR). Official Journal of the European Union, L 150, 40–145. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114

European Parliament, & Council of the European Union. (2009). Directive 2009/110/EC of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions. Official Journal of the European Union, L 267, 7–17. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0110

Hong Kong:

Hong Kong Legislative Council. (2025). Stablecoins Ordinance, Cap. 656 (Law No. 17 of 2025). Hong Kong: Government of the Hong Kong Special Administrative Region. Retrieved from https://www.elegislation.gov.hk/hk/cap656

Singapore:

Republic of Singapore. (2019). Payment Services Act 2019 (No. 2 of 2019). Singapore: Government of Singapore. Retrieved from https://sso.agc.gov.sg/Act/PSA2019

Secondary Sources

Arner, D., Auer, R., & Frost, J. (2020, November). Stablecoins: Risks, potential and regulation. Bank for International Settlements Working Papers, Working Papers No 905.

Bank of England. (2021, June 7). New Forms of Digital Money’ (2021) Discussion Paper. Bank of England. https://www.bankofengland. co.uk/paper/2021/new-forms-of-digital-money

Capoot, A. (2023, March 11). Stablecoin USDC breaks dollar peg after firm reveals it has $3.3 billion in SVB exposure. CNBC. https://www.cnbc.com/2023/03/11/stablecoin-usdc-breaks-dollar-peg-after-firm-reveals-it-has-3point3-billion-in-svb-exposure.html

Ehrentraud, J., Prenio, J., Boar, C., Janfils, M., & Lawson, A. (2021). Fintech and payments: Regulating digital payment services and e-money. Financial Stability Institute (FSI) Insights on Policy Implementation, No 33, 43.

FSB, F. S. B. (2020, October 13). Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements Final Report and High-Level Recommendations. https://www.fsb.org/2020/10/regulation-supervision-and-oversight-of-global-stablecoin-arrangements/

Irrera, A. (2023, November 10). JPMorgan Debuts Blockchain Collateral Settlement in BlackRock-Barclays Trade. Bloomberg.Com. https://www.bloomberg.com/news/articles/2023-10-11/jpmorgan-jpm-launches-blockchain-settlement-in-blackrock-barclays-trade

Liang, N. (2025, October 21). Stablecoins: Issues for regulators as they implement GENIUS Act. The Brookings Institution. https://www.brookings.edu/articles/stablecoins-issues-for-regulators-as-they-implement-genius-act/

MAS, M. A. of S. (2023). Response to Public Consultation on Proposed Regulatory Approach for Stablecoin-related Activities.

MAS, M. A. of S. (2024, April 19). FAQs—Payment Services Act 2019.

Ocampo, G. (2025, October 23). Stablecoin-related yields: Some regulatory approaches. Bank for International Settlements Working Papers. Bank for International Settlements Working Papers

Odinet, C. K., & Tosato, A. (2025). Regulating Centralised Stablecoins: Comparing MiCAR and the GENIUS Act. Texas A&M University School of Law Legal Studies Research Paper No. 25-38,.

Phang, R. (2024). Singapore’s Emerging Regulatory Approach to Stablecoins. Banking and Finance Law Review, 40.

Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements. (2020).

Schaaf, J. (2025, July 28). From hype to hazard: What stablecoins mean for Europe [European Central Bank]. 

Tether. (2025, September 30). Transparency. https://tether.to/en/transparency/?tab=reports

White House. (2025, July 18). Fact Sheet: President Donald J. Trump Signs GENIUS Act into Law. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/