Asia’s Stablecoin Competition Sparked by US GENIUS Act

Asian countries are adopting diverse stablecoin strategies in response to intensifying global competition. This includes Japan’s regulatory-first approach, South Korea’s rapid trademark filings, and China’s exploration of yuan-backed digital currencies to challenge U.S. dollar dominance.

The enactment of the US Genius Act has accelerated the competition for stablecoin dominance. Japan was the earliest to introduce the regulations, but now the country faces practical adoption and scalability challenges.

Global Stablecoin Strategies: The Path Forward

The WebX conference in Tokyo recently hosted an engaging panel discussion on the future of stablecoins. Titled “Beyond Division and Regulation: The Future of Global Stablecoin Dominance,” the session brought together key figures from the industry, including Nischint Sanghavi, Visa’s Asia Pacific head of digital currency; Yam Ki Chan, Circle’s Asia Pacific vice president; and Emily Parker, a senior strategic adviser at Coincheck Group.

Sanghavi shared insights on Visa’s long-standing commitment to building payment infrastructure for stablecoins, a six-year endeavor that has paid off. The company now supports four digital currencies on four blockchains, facilitating approximately $100 billion in transactions.

Circle’s Chan emphasized how the Genius Act has elevated the discussion of stablecoin strategy to a global, boardroom-level priority. He also pointed out that while a significant majority of current stablecoins are tied to the US dollar, future digital currency issuances will likely shift to align with real-world trade flows.

Parker offered a regional perspective, noting the intense interest in South Korea, where companies are rapidly filing for related trademarks. She also highlighted China’s efforts to explore yuan-backed digital currencies, a strategic move aimed at counterbalancing the global dominance of the US dollar.

Japan’s Regulatory Head Start Faces Practical Barriers

Japan is widely recognized as the first nation to introduce a dedicated regulatory framework for stablecoins. However, adoption has been slow. Under the trust bank model, reserve assets must be stored in Japanese bank accounts that provide little or no interest, creating inefficiencies.

Meanwhile, the “Type II Funds Transfer Service” model imposes a one-million yen transfer limit (approximately $6,800) per transaction. Parker noted that such restrictions, with high fees and long processing times, create barriers for large corporations considering stablecoin adoption.

Despite these challenges, panelists pointed to clear use cases, including cross-border remittances, tokenized asset trading, and AI-enabled automated payments. Sanghavi envisioned a future where AI agents could seamlessly book flights and execute payments without human intervention.

Panelists drew a parallel between the current state of stablecoin innovation and the early days of the internet around 1995. Chan predicted we’d see transformative use cases emerge over the next few years. These new applications, which are currently unimaginable, would highlight the potential of digital payment infrastructure.