Global Stablecoin Compliance: GENIUS Act, MiCA, Hong Kong, Singapore, and More Key Rules

Stablecoins have become part of the global payment ecosystem. In 2024, stablecoin transactions exceeded $15.6 trillion, outpacing Visa’s annual transaction volume.

As regulators race to keep up, new rules across the world are reshaping how issuers operate and how financial institutions manage compliance. 

This guide breaks down the core trends in stablecoin compliance—from reserve backing and redemption rights to AML, the Travel Rule, and cross-border obligations—to help compliance teams prepare for a financial landscape where stablecoins have become increasingly important.

What are stablecoins? Do they live up to their name?

Stablecoins are designed to maintain a stable value by being pegged to assets such as fiat currency. The USDT stablecoin, for example, is pegged to the US dollar. Because users expect price stability and redemption certainty, regulators often treat stablecoins differently from more volatile digital assets, like Bitcoin, which are typically not redeemable for a fixed amount of money.

Stablecoins are gaining wider acceptance among both consumers and businesses alike because they provide the benefits of crypto without the volatility. Often pegged to fiat currencies like the USD or JPY, they offer a reliable, fast, and cost-efficient way to transact, especially across borders. This makes them easier to trust and adopt in everyday financial use cases compared with traditional cryptocurrencies, which are often treated more as investment assets than payment tools.

The difference in function between stablecoins and traditional cryptocurrencies has become especially visible after the recent crypto downturn in October 2025, when major tokens saw significant price drops. Moments like this reinforce why many users prefer stablecoins as they retain value during volatile market swings, making them more predictable.

The main types of stablecoins are:

• Fiat-backed stablecoins: Backed 1:1 by traditional currencies (USD, EUR, JPY) held in cash or cash equivalents.
• Crypto-backed stablecoins: Collateralized with other cryptocurrencies and may be over-collateralized to offset volatility.
• Commodity-backed stablecoins: Pegged to tangible assets like gold or other stable commodities.
• Algorithmic stablecoins: Stabilized through algorithms and smart contracts that control supply and demand.

At the same time, hybrid fintech–stablecoin products are rapidly expanding. Visa and Mastercard now support stablecoin settlement, while crypto cards, merchant payment systems, and even payroll tools increasingly run on stablecoin rails. With major markets introducing clearer regulatory frameworks for local currency-backed stablecoins, they are becoming the key bridge between traditional finance and the digital economy.

What is stablecoin compliance?

Stablecoin compliance means adhering to the regulations that govern the provision of specific services by entities involved in issuing, managing, or supporting stablecoins. This includes obligations such as anti-money-laundering (AML) controls, as well as other financial and legal requirements.

Like compliance obligations for other financial instruments, stablecoin compliance helps stablecoins operate in a way that protects users, businesses, and the wider economy, while preventing their abuse for financial crime.

This sets stablecoin regulatory compliance apart from typical digital asset compliance. In addition to digital asset rules and AML stablecoin controls—such as KYC, transaction monitoring, sanctions screening, and the Travel Rule—many jurisdictions now impose stablecoin-specific requirements, including:

• strict reserve backing and asset segregation
• redemption rights for users
• capital, liquidity, and risk-management requirements
• audit and attestation obligations
• cross-border issuance controls

Stablecoin compliance combines the fundamentals of digital asset regulations with rules associated with more traditional payments and banking, reflecting the hybrid nature of stablecoins. 

As global frameworks, such as the US GENIUS Act and the EU’s MiCA, take shape, understanding global stablecoin compliance requirements is becoming increasingly essential for issuers, exchanges, custodians, and payment providers.

Suggested read: European Banks Unite to Launch Euro-Backed Stablecoin

Key global regulatory developments in stablecoins (2026)

Stablecoin regulation is accelerating worldwide, with major markets moving to formalize stablecoin compliance requirements. While policymakers broadly agree on the need for strong reserve backing, redemption rights, and AML safeguards, approaches remain fragmented. 

There is also an emerging split between digital currencies being issued by central banks, such as in Nigeria, or those recently proposed in the EU, and a ban on central banks issuing digital currencies in favor of stablecoin regulation, as seen in the United States.

United States: The United States is advancing the GENIUS Act, which introduces federal oversight, reserve standards, redemption guarantees, and frameworks for foreign issuers.

European Union: The EU’s MiCA stablecoin compliance requirements came into force in June 2024, broadly introducing two regulated categories:

• E-money tokens (EMTs), which claim to maintain a stable value by referencing the value of one official currency.
• Asset-referenced tokens (ARTs), which claim to maintain a stable value by referencing another value or right or a combination of them, including one or more official currencies.

Issuers must meet capital, governance, and transparency standards, with strong AML obligations.

United Kingdom: The UK is advancing a general digital asset framework, including a phased plan to bring fiat-backed stablecoins into payments under the Financial Services and Markets Act 2023 and the proposed Cryptoassets Regulation Order, with the Bank of England overseeing systemic stablecoin issuers.

LATAM: Frameworks vary widely across Latin America. Brazil has recently relaxed stablecoin rules and supports stablecoin supervision under the central bank. In Argentina, which widely uses digital assets, there are no specific stablecoin regulations.

APAC: The Asia-Pacific region is becoming a global hub for stablecoin innovation. Singapore has introduced a stablecoin framework, requiring high-quality reserves and redemption rights. Hong Kong is also rolling out a stablecoin licensing regime focused on innovation.

Suggested read: Stablecoins Increasingly Used as Currency in Venezuela as Inflation Soars

US: The GENIUS Act and its impact

The Guaranteeing Essential Regulatory Oversight for New and Innovative Stablecoins (GENIUS) Act aims to create federal standards for stablecoins in the United States. Its core goal is to establish clear rules for issuance, reserves, governance, and stablecoin regulatory compliance, addressing longstanding gaps in US digital asset oversight.

The Act introduces permissioning and supervision for stablecoin assets and reserved custodians at the federal level. It requires issuers to maintain high-quality liquid assets to back stablecoin liabilities and ensure users can redeem tokens at par value.

The Act also embeds AML stablecoin controls, including KYC requirements, aligning stablecoin operations with broader US financial crime obligations. 

The GENIUS Act reflects the US policy direction of treating stablecoins as payment instruments rather than speculative digital assets and integrating them into the financial system with safeguards similar to those applied to more traditional payment institutions.

EU: MiCA requirements for stablecoin issuers

Under the EU’s Markets in Crypto-Assets Regulation (MiCA), stablecoins are split into ARTs and EMTs.

Core obligations for ART and EMT issuers

• Authorization and supervision: Issuers must be authorized, meet governance standards, and comply with ongoing supervision.
• Transparency and disclosures: MiCA sets out rules on transparency, including publishing white papers, fair marketing, inside information, reserves, and holder information. 
• Reporting: Reports are harmonized with common templates and instructions.

Reserve management and redemption

MiCA clarifies rules for reserve management and redemption of EMTs and ARTs:

How MiCA compares to the US GENIUS Act

MiCA and the GENIUS Act both converge on reserves, redemption, governance, and AML alignment, but MiCA differs in that it delivers a cross-border regime. While MiCA separates stablecoins into EMTs and ARTs, the GENIUS Act does not.

APAC: Stablecoin regimes in Hong Kong and Singapore

Two major APAC regulators, namely the Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA), are structuring stablecoin compliance regimes with repercussions across the wider region and the globe.

Singapore

In August 2023, MAS finalized its regulatory framework for single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency. Reserve assets must be valued at no less than 100% of the value of single-currency-pegged stablecoins in circulation at all times.

Singapore offers a clear framework for stablecoins within its regulated payment and digital asset ecosystem, focused on innovation balanced with regulatory security. In May 2025, DCS Card Centre, in partnership with Visa, launched DeCard, a next-generation credit card designed to bridge the gap between traditional finance and digital assets. Users can deposit either Singapore dollars or selected stablecoins such as USDT and USDC into their DeCard, and spend the assets wherever Visa is accepted.  

Hong Kong

The Stablecoins Ordinance, establishing the regulatory regime for stablecoin issuers, came into effect on August 1, 2025. This means that any person issuing a fiat-referenced stablecoin in or outside Hong Kong that references the Hong Kong dollar must be licensed with the HKMA.

As in other jurisdictions, issuers must maintain reserves equal to or exceeding the par value of outstanding tokens, apply robust stabilisation mechanisms, segregate client assets, and implement AML/CFT, risk management, disclosure, and audit rules.

Hong Kong aims to become a regulated innovation hub for tokenized assets, and this stablecoin regime is central to that plan. It does so by introducing a wider LEAP framework for its digital asset ecosystem, focusing on: Legal and regulatory streamlining; Expanding the suite of tokenized products; Advancing use cases and cross-sectoral collaboration; and People and partnership development.

APAC trends

While both Singapore and Hong Kong are aligning with global themes of regulated stablecoin innovation with redemption rights, segregated reserves, and AML/CFT obligations, differences remain. Singapore restricts its regime to stablecoins pegged to SGD or G10 currencies and issued in Singapore, while Hong Kong’s regime covers fiat-referenced coins, including those issued outside HK but referencing HK dollar.

Both South Korea and Japan have also seen recent moves to introduce stablecoins pegged to their respective currencies. 

Suggested read: South Korea Moves to Legalize Stablecoin Issuance Under Sweeping Digital Asset Bill

Stablecoins, the Travel Rule, and transaction transparency

The FATF Travel Rule applies to stablecoins in the same way it applies to other virtual assets. This ensures authorities can trace funds, identify counterparties, and prevent the use of stablecoins for money laundering, sanctions evasion, or terrorist financing.

This places pressure on firms to adopt solutions that can manage Travel Rule stablecoin compliance across jurisdictions, especially as supervisory expectations continue to develop. Hong Kong, for example, has made Travel Rule obligations fully enforceable with tangible consequences, showing the city’s desire to lead in regulated and compliant stablecoin activity.

Suggested read: Travel Rule in the US: Jurisdictional Requirements for 2025

Building a stablecoin compliance checklist

To work responsibly with stablecoins, compliance teams need to implement frameworks covering regulatory licensing, reserve management, and AML controls for stablecoins. The exact requirements depend on the applicable regulations, but a diligent stablecoin compliance checklist should generally include:

Licensing or authorization

• Assess rules for any possible limitations, such as cross-border issuance
• Confirm stablecoin licensing or authorization requirements in your jurisdiction 
• Register with relevant financial regulators

Reserve management

• Maintain full, high-quality liquid reserves backing outstanding tokens in accordance with all relevant regulations
• Segregate reserves from corporate funds
• Conduct audits as needed

Redemption compliance

• Provide redemption rights at par value
• Disclose redemption timelines and operational procedures

Governance and risk management

• Establish internal controls, board-level oversight, and compliance officers
• Monitor market, liquidity, and operational risks

AML/CFT and Travel Rule compliance

• Conduct KYC/KYB onboarding and AML screening
• Apply Travel Rule to stablecoin transfers
• Implement transaction monitoring
• Maintain suspicious activity reporting workflows

Transparency

• Publish white papers or disclosure statements on reserves, rights, and risks
• Issue regular reporting to regulators and users

Service provider and partner due diligence

• Perform due diligence as needed, such as on custodians, reserve banks, and technology partners
• Validate auditor qualifications and reporting standards
• Monitor partners for regulatory changes

Technology and data security

• Implement secure issuance, custody, and redemption systems
• Ensure reliable record-keeping
• Protect user data in line with privacy and cybersecurity laws

Stablecoins risk management and AML challenges

Even with maturing regulatory frameworks, stablecoin oversight presents considerable risk-management and AML challenges. Stablecoins move across borders at scale, often without the need for traditional intermediaries, which increases pressure on compliance teams. Key pain points include:

Cross-border transfers and regulatory fragmentation: Stablecoins routinely move between jurisdictions with different standards and reporting rules. Compliance teams must map obligations across different regimes while applying controls.

Regulatory arbitrage and “jurisdiction hopping”: Issuers may seek out lenient jurisdictions for setup while distributing globally, which complicates supervision and crisis response when consumer harm occurs.

Wallet screening and counterparty risk: Risk exposure extends beyond direct customer wallets. Firms need to screen counterparties across hosted and unhosted wallets, detect mixers and cross-chain bridges, and identify layering typologies that exploit stablecoins as settlement rails.

Reserve attestations and liquidity assurance: Stablecoin buyers expect par value redemption, making reserve transparency critical. However, audit standards, liquidity criteria, and attestation frequency vary by jurisdiction. Firms generally need to maintain high-quality liquid assets, segregate funds, and deliver independent verification to prove solvency and protect users.

Technology, data, and reporting complexity: Globally deploying stablecoin AML programs means coordinating data exchanges, Travel Rule messaging, suspicious activity reporting, and cybersecurity protections, without introducing friction for legitimate users.

Name-screening and privacy-tech challenges: Privacy coins, mixers, and emerging L2 privacy rails obscure AML data trails and can be used for sanctions evasion or fund obfuscation involving stablecoins.

On-/off-ramp vulnerabilities & merchant abuse: Stablecoins are increasingly used in payments and merchant settlement, which opens new fraud vectors (fake merchants, invoice scams, sanctions evasion, and synthetic-identity onboarding via simplified KYC, etc.)

Expert insight: Future of stablecoin regulation

As stablecoin frameworks mature, industry leaders expect compliance expectations to tighten, particularly around identity verification, cross-border supervision, and real-time AML controls. Stablecoins are increasingly positioned as a global payment infrastructure, linking traditional finance with tokenization.

Siva Kumar, Sumsub’s Director for APAC, who is closely involved in regional regulatory rollout, including Hong Kong’s new regime, shares what should be done to meet regulators’ expectations:

The implementation of Hong Kong’s stablecoin licensing regime marks a significant step toward a more mature regulatory environment. It provides clarity and operational certainty for regulated entities in the stablecoin space, while also setting a compliance benchmark for the broader market.

Stablecoins offer significant potential to enhance cross-chain capital mobility and enable more flexible payment and settlement models. However, they also introduce risks—particularly through the potential anonymity of non-custodial or self-custodial wallets—which can facilitate layering and velocity-based structuring techniques.

To mitigate these risks, financial institutions must adopt robust due diligence measures, such as real-time wallet risk scoring and behavioral analytics to flag wallets with links to mixers, darknet markets, or sanctioned addresses before transactions are executed. Machine learning-powered transaction monitoring engines can further improve the speed and accuracy of identifying anomalies.

In addition, compliance with the Financial Action Task Force’s Travel Rule is essential for cross-platform stablecoin transfers, as it forms part of the global standards to combat money laundering and terrorist financing.

To meet the expectations of regulators in Hong Kong and the growing number of jurisdictions enforcing the Travel Rule, financial institutions should consider adopting solutions that integrate compliance requirements and support fully interoperable, single-communication Travel Rule protocols. These solutions can automate data transfers, reporting, and transaction screening, streamlining compliance while enhancing transparency and security.

As stablecoins continue to mature, their use cases are expanding well beyond virtual asset trading platforms into a wider range of industries. Businesses across sectors should proactively deploy compliance infrastructure and address regulatory risks related to identity verification, transaction monitoring, and AI-driven fraud detection, and unlock faster, more cost-effective capital flows through stablecoin adoption.

Siva Kumar

APAC Legal Director at Sumsub

Suggested read: AML & Fraud Risk Assessment in 2025: Risk Matrices, Risk Scoring, and Best Practices

Stablecoins compliance automation: Best tools for issuers 2026

Crypto and stablecoin compliance is challenging globally due to scattered data, rapidly evolving risks, and differing regional regulations. Reliable compliance solutions are essential for companies operating across jurisdictions.

As stablecoins integrate into the financial infrastructures of the United States, European Union, and Asia-Pacific markets, automated tools—such as Travel Rule assistance, identity verification, and transaction monitoring—help issuers, exchanges, custodians, and payment providers meet local and international regulatory requirements.

Automated identity verification and onboarding streamline KYC and KYB processes, with real-time document and biometric checks that align with regional AML standards, including FinCEN in the US, the EU’s AMLD6, and MAS regulations in Singapore. A risk-based approach reduces operational friction while focusing efforts on high-risk areas, which becomes increasingly important as stablecoins attract more global users. Blockchain analytics and wallet intelligence further enhance compliance capabilities.

Sumsub’s crypto monitoring solution for wallets and transaction screening simplifies regional compliance by unifying all blockchain risk signals in a single platform. This ensures adherence to jurisdiction-specific rules, from Travel Rule reporting in the EU to transaction screening under APAC regulations.

Machine-learning models continuously detect emerging fraud and AML typologies, enabling efficient case management and alert escalation. Regulatory reporting can also be automated according to local requirements, such as EU transaction reporting or MAS submission standards.

By combining identity, transaction, and behavioral analytics, platforms like Sumsub enable issuers and VASPs to scale safely across regions, from onboarding and ongoing checks to wallet risk scoring and secure Travel Rule data exchange. This regional approach is increasingly vital as stablecoin adoption expands worldwide.

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FAQ

• What are the compliance requirements for stablecoins?

  Stablecoins must meet a range of financial and legal requirements, including AML/CFT standards, licensing, full reserve backing, redemption rights from their issuers, transparency, and ongoing audits. They also often need robust KYC procedures, sanctions screening, transaction monitoring, and Travel Rule to prevent misuse and protect consumers.
  
  *The scope of obligations depends on the requirements in the jurisdiction where a VASP is incorporated.

• What is the Genius Act in stablecoin regulation?

  The GENIUS Act aims to establish federal oversight for payment stablecoins, including reserve quality requirements, redemption guarantees, and AML rules. It aims to align stablecoins with other financial instruments rather than treating them only as digital assets.

• How does MiCA regulate stablecoins?

  The EU’s MiCA framework regulates stablecoins through E-money tokens (EMTs) and asset-referenced tokens (ARTs), with strict rules for reserves, supervision, audits, consumer disclosures, and redemption rights. Significant tokens face enhanced oversight and reporting requirements.

• Does the Travel Rule apply to stablecoins?

  Yes. Under FATF standards and according to regulatory frameworks like the EU’s MiCA, the Travel Rule applies to stablecoin transfers because they're recognized as a type of virtual asset, requiring originator and beneficiary information to accompany transactions. Firms must collect, screen, and securely transmit this data to prevent illicit finance.

• What should be included in a stablecoin compliance checklist?

  A checklist should include correct licensing, reserve management, redemption procedures, governance, audits, disclosures, and risk-based AML controls, including KYC, sanctions screening, blockchain analytics, and Travel Rule processes. Partner due diligence and real-time monitoring are also essential.
  
  *The final checklist will vary depending on the applicable regulations.

• How can companies stay compliant with new stablecoin regulations?

  Companies should monitor regulatory updates, build jurisdiction-specific compliance programs, and adopt automated identity and blockchain analytics tools. Working with trusted compliance partners and preparing for cross-border obligations helps ensure readiness as global rules evolve.