Introduction
Stablecoin regulation is no longer a matter of speculation—it is now law. The GENIUS Act has been signed into federal law in the United States. The European Union’s Markets in Crypto-Assets Regulation (MiCA) is now fully enforceable across all 27 member states. And in Asia, Hong Kong’s Stablecoins Bill has passed into law and takes effect in August 2025. At the same time, the Financial Action Task Force (FATF) has issued new 2025 guidance that reshapes compliance expectations for virtual asset service providers (VASPs) around the globe.
These developments form the regulatory foundation of a new global stablecoin regime. They are not merely compliance frameworks—they are structural gatekeepers. If you issue, custody, transfer, or integrate stablecoins into your product stack, your ability to scale across borders will now depend on legal infrastructure.
This article offers a founder- and investor-focused analysis of the four dominant frameworks now in effect: the GENIUS Act (United States), MiCA (European Union), the Hong Kong Stablecoins Bill, and the FATF Travel Rule enforcement regime. We also provide a practical legal checklist for general counsels and strategic decision-makers working on cross-border deployments.
The Big Four: GENIUS, MiCA, HK Stablecoins Bill, and FATF
The GENIUS Act: U.S. Enters the Stablecoin Arena
On July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law. It establishes a federal licensing framework for payment stablecoin issuers and creates three issuer categories: federally qualified nonbank issuers, insured depository institutions, and state-chartered issuers under $10 billion in assets.
The law mandates 1:1 reserve backing, monthly attestations audited by a public accounting firm, and adherence to the Bank Secrecy Act. GENIUS also restricts stablecoin issuance to entities licensed under this framework, effectively banning unlicensed issuance within U.S. jurisdiction.
This act represents the first federal signal that stablecoins are being incorporated into the traditional financial system. The statute can be read here.
MiCA: The EU’s Comprehensive Crypto Framework
The Markets in Crypto-Assets Regulation (MiCA), adopted by the EU in June 2023, became applicable to stablecoin issuers as of June 30, 2024. It requires crypto asset service providers (CASPs), issuers of asset-referenced tokens (ARTs), and e-money tokens (EMTs) to obtain licensing and submit detailed whitepapers for each offering.
Under MiCA, EMTs must maintain fully backed reserves and offer redemption at par. Algorithmic stablecoins are prohibited. Importantly, MiCA introduces a single license that can be passported across all EU member states, providing legal certainty for market access but increasing the operational burden for compliance.
MiCA represents a capital markets approach to crypto asset regulation. The full regulation is available here.
Hong Kong’s Stablecoins Bill: Asia’s Institutional Gateway
In May 2025, Hong Kong passed its Stablecoins Bill, with implementation set for August 1, 2025. The legislation introduces a licensing requirement for fiat-referenced stablecoin (FRS) issuers and places them under the regulatory supervision of the Hong Kong Monetary Authority (HKMA).
The law requires:
- Full backing of stablecoins by high-quality, liquid assets
- Redemption rights at par
- Reserve custody under local trust structures
- Annual audits and continuous disclosure obligations
- A local management presence and incorporation
The bill also aligns Hong Kong with global AML and CFT standards, including FATF’s Travel Rule implementation. This move positions Hong Kong as the most structured and transparent stablecoin jurisdiction in Asia.
FATF 2025 Guidance: Compliance Through Enforcement
In June 2025, the Financial Action Task Force released its latest guidance on enforcing the Travel Rule and supervising VASPs. While not a legislative body, FATF’s recommendations are embedded in national legislation across more than 80 jurisdictions.
The updated 2025 framework emphasizes:
- Required collection and transmission of originator and beneficiary data for all virtual asset transfers
- Enforcement audits for Travel Rule compliance
- Restrictions on VASPs that do not implement adequate risk-based measures for unhosted wallets
FATF’s 2025 guidance is available here.
What Cross-Border Operators Overlook
Legal design is now central to business strategy. But many stablecoin teams still overlook key compliance misalignments when launching across multiple jurisdictions. Here are four recurring blind spots:
Redemption Rights Diverge by Jurisdiction
Under MiCA, EMTs must be redeemable at par through an authorized institution. The GENIUS Act enforces redemption disclosures and audit-backed claims. Hong Kong’s bill requires real-time, local redemption. A mismatch across these models creates user risk, regulatory exposure, and enforcement triggers.
Reserve Custody Is No Longer Neutral
The GENIUS Act requires reserves to be held with U.S.-regulated custodians. MiCA mandates EU-based custody with segregated assets. Hong Kong demands trust arrangements with locally licensed partners. Choosing a custodian based only on cost or convenience can derail market access.
Travel Rule Compliance Is Fragmented
Many issuers and VASPs still rely on outdated tooling to handle originator and beneficiary data exchange. Transfers between hosted and unhosted wallets raise red flags. Failure to comply across jurisdictions may result in de-banking or blacklisting.
Licensing Does Not Guarantee Banking
Even with a MiCA or HK license, stablecoin issuers may face rejection from EU or Asian banks due to internal risk frameworks. Legal infrastructure must include banking partnerships and reserve interoperability strategies.
Strategic Models: Three Go-to-Market Paths
Depending on where you operate and where your users reside, the legal path to launch may follow one of three strategic models:
Asia-First (via the HK Stablecoins Bill or Singapore’s MAS framework):
This route is ideal for projects targeting APAC markets, institutional capital, and fintech integration. Hong Kong offers legal clarity, bank-grade oversight, and a credible regulatory reputation.
EU-Scale (via MiCA licensing):
One license opens the door to all EU member states. While capital-intensive and legally rigorous, this model is viable for teams looking to integrate with SEPA, partner with EU fintechs, or target consumer-facing payment use cases.
U.S. Institutionalization (under the GENIUS Act):
GENIUS offers credibility for projects working with U.S. banks, enterprise platforms, and treasury partners. However, compliance costs are high, and enforcement is likely to be aggressive.
What to Do Now: General Counsel Legal Checklist
Below is a practical checklist for legal teams evaluating multi-jurisdictional issuance or integration of stablecoins.
Core Infrastructure (Non-Negotiable):
- Confirm that your issuer structure qualifies under GENIUS, MiCA, or the HK Stablecoins Bill
- Vet your reserve assets for eligibility under each jurisdiction’s rules
- Ensure Travel Rule tooling is interoperable across hosted/unhosted wallets
- Verify that redemption logic complies with both UI disclosures and local enforceability
- Map out any exposure to non-FATF-compliant counterparties
Scaling Considerations (Strategic Planning):
- Evaluate whether dual-licensing is required across key markets
- Prepare for additional licensing, AML review, or tax registration in user-heavy countries
- Confirm that bank partners are institutionally willing to serve stablecoin issuers
- Draft disclosures that align with MiCA, GENIUS, and HKMA transparency obligations
- Design for jurisdictional pivoting in case of regulatory change or enforcement action
Sidebar: STABLE Act vs. GENIUS Act
The original STABLE Act, introduced in 2020, would have required all stablecoin issuers to be FDIC-insured banks. It sought to ban nonbank issuance entirely. The GENIUS Act, by contrast, represents a compromise. It permits issuance by nonbank financial institutions—but only under strict federal oversight. While both bills share concerns about consumer protection and systemic risk, GENIUS offers a clearer and more operational path forward.
Conclusion: Legal Infrastructure Is the Moat
What separates a scalable stablecoin project from a shuttered one in 2026 will not be its smart contract architecture or APY—it will be its legal infrastructure. The convergence of the GENIUS Act, MiCA, the HK Stablecoins Bill, and FATF’s 2025 enforcement guidance has created a new perimeter around digital assets.
Jurisdiction is now destiny. Compliance is strategy. And legal infrastructure is the moat.
Need help building legal infrastructure that scales across borders?
At Veritas Global, we help founders, investors, and general counsel navigate cross-border compliance, stablecoin regulation, and multi-jurisdictional launch strategies.
Contact us or explore our latest insights to build your legal foundation.
