Full Name: Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act)
Legislative Process: Passed by the U.S. Senate on May 19, 2025, with a vote of 66–32. Expected to be signed into law later in the year.
Legislative Goal: To establish a federal regulatory framework for stablecoins, ensuring safety, transparency, consumer protection, and innovation in digital finance.
Hong Kong Stablecoin Bill
Legislative Process: First reading at the Legislative Council on December 18, 2024. Passed on May 21, 2025, with implementation expected within the year.
Legislative Goal: To build a comprehensive regulatory regime for stablecoin issuance and operations, protect financial stability, and position Hong Kong as a global fintech hub.
2. Regulatory Framework and Licensing Requirements
Category
U.S. GENIUS Act
Hong Kong Stablecoin Bill
Regulators
Federal: Office of the Comptroller of the Currency (OCC), Federal Reserve; State regulators
Hong Kong Monetary Authority (HKMA)
Scope
All payment stablecoins issued or marketed to the U.S. public
All stablecoins pegged to HKD or marketed to the Hong Kong public
Licensing
Issuers must obtain a federal or state charter and meet capital, liquidity, and risk management standards
Issuers must be locally incorporated and licensed by the HKMA
Principle
“Same activity, same risk, same regulation”
“Same activity, same risk, same regulation”
3. Reserve Assets and Redemption Mechanism
Category
U.S. GENIUS Act
Hong Kong Stablecoin Bill
Reserve Requirements
100% backing with cash or short-term U.S. Treasury bills
100% backing with high-quality liquid assets like cash or short-term government bonds
Reserve Custody
Reserves must be held at regulated financial institutions with regular audits
Reserves must be held at local banks and subject to HKMA oversight
Redemption
Issuers must allow 1:1 redemption at face value, with transparent procedures
Same 1:1 redemption requirement and operational transparency
4. AML and Compliance Measures
Category
U.S. GENIUS Act
Hong Kong Stablecoin Bill
AML Compliance
Subject to the Bank Secrecy Act and AML regulations, including customer due diligence (CDD) and transaction monitoring
Subject to Anti-Money Laundering and Counter-Terrorist Financing Ordinance, with CDD and monitoring obligations
Internal Controls
Issuers must establish internal controls and undergo audits by regulators
Issuers must set up risk management systems and accept regulatory inspections
5. Cross-Border Oversight and Global Implications
U.S. GENIUS Act
Emphasizes international regulatory cooperation and standardization of cross-border stablecoin usage.
Aims to reinforce the U.S. dollar’s dominance in global digital payments.
However, increased reliance on Treasury bills may trigger short-term volatility in the bond market.
Hong Kong Stablecoin Bill
Supports multi-currency-pegged stablecoin development, positioning Hong Kong as a cross-border payment hub in the Asia-Pacific.
Enhances Hong Kong’s financial system attractiveness and draws global crypto firms.
Aligns with broader efforts to internationalize the Renminbi, especially in digital payment corridors.
6. Potential Impact on the Global Financial System
United States
The GENIUS Act may boost demand for short-term U.S. Treasuries, strengthening dollar dominance.
Could influence the structure and liquidity of the U.S. bond market, requiring close regulatory oversight.
Hong Kong
Hong Kong’s clear regulatory regime may attract fintech investment and reinforce its fintech leadership in Asia.
By supporting RMB-linked stablecoins, it helps enhance the currency’s cross-border settlement and visibility.
7. Conclusion
The United States and Hong Kong have adopted distinct yet strategically aligned approaches to stablecoin regulation. The U.S. focuses on building a federally unified and risk-managed framework to fortify the dollar’s global position, while Hong Kong emphasizes localized licensing, reserve rigor, and its role as a digital asset gateway between East and West.
As stablecoins grow in utility and global integration, international regulatory coordination will become increasingly essential for systemic stability and innovation.
