Asian regulators tell banks to prepare for coming stablecoin rules

Regulators across Asia are urging banks to prepare for stablecoin legislation as governments accelerate efforts to establish frameworks for digital currencies.

John Cho, chief stablecoin officer at the Kaia DLT Foundation, said regulators are directly approaching banks and asking them to begin preparing before legislation is finalized. 

The push reflects expectations that stablecoins could reduce costs and improve efficiency across local financial systems.

Hong Kong introduced dedicated stablecoin legislation in 2025, while Singapore, Japan, and South Korea are also developing frameworks. Cho expects every country in Asia to adopt some form of stablecoin specific legislation within the next 24 to 36 months.

The region represents a significant opportunity because of its fragmented financial infrastructure, currencies, and payment systems. Major issuers including Tether and Circle are already expanding across Asian markets.

Japan has taken a more restrictive approach by requiring stablecoin reserves to be held domestically. Circle’s USDC, distributed through SBI, is currently the only global dollar stablecoin approved in the country, according to Cho.

Cho also expects local currency stablecoins to grow alongside dollar denominated products. Tokenized versions of currencies such as the Japanese yen, Korean won and Chinese renminbi could reduce reliance on dollars and limit foreign exchange costs.

That shift is already emerging across payment networks. In Bangladesh, for example, Bitget Wallet users can convert crypto into taka and send funds directly to mobile payment services, including bKash and Nagad.

Dollar stablecoins still remain useful for services priced in US dollars, where crypto-based payments can sometimes reduce foreign exchange fees.

Cho cautioned that stablecoins do not automatically make payments cheaper. Onramps can remain expensive because access is concentrated among licensed providers, while onchain foreign exchange rates can trade at premiums to traditional markets.

By 2031, Cho expects stablecoin infrastructure to become largely invisible to consumers, operating behind financial products without users needing to interact directly with blockchain technology.