U.S. vs Hong Kong Stablecoin Regulation: A Battle For Global Dominance

Key Points

1. The U.S. GENIUS Act mandates federal oversight for large stablecoin issuers, requires 1:1 reserves in U.S. Treasuries or cash, and imposes strict AML/KYC rules, reinforcing dollar dominance.

2. Hong Kong’s Stablecoins Ordinance allows multi-currency pegs (HKD, USD, offshore RMB), requires local incorporation, and aligns with FATF standards, supporting China’s BRI and regional trade.

3. The GENIUS Act’s high compliance costs ($5M–$10M annually) may drive market consolidation, while Hong Kong’s selective licensing (HKD 25M capital minimum) favors well-capitalized firms.

4. Hong Kong’s framework reduces cross-border payment fees (5%–7% savings in BRI corridors) and promotes blockchain adoption, enhancing RMB’s role in global trade.

5. The U.S. strategy ties stablecoin reserves to Treasury debt, boosting government borrowing, while Hong Kong’s multi-currency approach challenges USD hegemony in emerging markets.