Stablecoins Gain Momentum in Asia as Financial Adoption Grows

Stablecoins are gaining significant traction across Asia as regulators and financial institutions embrace these blockchain-based assets, industry leaders said at Hong Kong’s Web3 Festival this week.

While the United States moves toward legislation on stablecoins, Asian markets are developing their own frameworks with Hong Kong at the forefront of regulatory innovation.

Market Expansion Beyond USD Dominance

The global stablecoin market has reached $220 billion in value, surpassing pre-Terra collapse levels, JD.com Vice President and Chief Economist Shen Jianguang told attendees. Monthly transactions now exceed 700 billion USD, with volume already surpassing traditional payment networks like Visa and Mastercard.

JD.com, one of China’s largest e-commerce companies, has been at the forefront of stablecoin innovation, having issued a Hong Kong dollar-based stablecoin in July 2024. The company is leveraging its extensive foreign trade corridors for exports and imports, implementing stablecoins in closed-loop systems as initial use cases.

US dollar-backed tokens currently dominate approximately 99% of the market, according to Rita Liu, CEO of RD Technologies, one of the first companies selected for Hong Kong’s stablecoin issuer regulatory sandbox. Liu noted growing interest in non-USD alternatives across the region.

“A CNH-backed stablecoin could be very interesting under Hong Kong’s regulation,” Liu said, referring to offshore yuan that trades outside mainland China. “It will become a meaningful tool as China’s exports to emerging markets are increasingly priced in RMB.”

Hong Kong’s Regulatory Leadership

Hong Kong is positioning itself as a stablecoin hub with its regulatory framework advancing rapidly. Legislative Council Member Duncan Chiu said the territory’s stablecoin bill is expected to pass in May, with issuance possible in the second half of this year.

Standard Chartered’s Head of Digital Asset & FinTech Hong Kong, Dominic James Maffei, believes combining USD stablecoins with high-quality regulated local currency stablecoins will create powerful market dynamics. He pointed to Japan‘s “Project Pax,” where the country’s three major banks have jointly developed a cross-border payment system using stablecoins, as an example of successful implementation that Hong Kong could emulate and improve upon.

Multi-Currency Solutions Gaining Ground

Ryan De Souza, Partnerships Lead at Arbitrum, highlighted that his platform is seeing increased adoption of multiple currency stablecoins beyond USD.

“We’re not only seeing great dominance in USD stablecoin liquidity, but we’re also onboarding different currency stablecoins, high-quality regulated stablecoins onto the ecosystem,” said De Souza. He noted that Mexican fintech Bitso launched MXN stablecoin exclusively on Arbitrum, while Singapore-based issuers have introduced Singapore dollar stablecoins on the platform.

Traditional financial institutions are rapidly entering the ecosystem. Ru Haiyang, Co-CEO of Hashkey Exchange BG, pointed to major banks including Bank of America, BNY Mellon, Standard Chartered, Brazil’s Itaú, and Japan’s Sumitomo Mitsui Bank exploring stablecoin initiatives. “Going forward, the swap between stablecoins and fiat currencies will be just as easy as doing foreign exchange,” predicted Ru, emphasizing that this financial integration will make stablecoins a mainstream tool for international transactions.

Efficiency Driving Mainstream Adoption

The driving forces behind adoption are efficiency and cost advantages. While traditional remittances require five working days and average 6.3% in fees globally, blockchain stablecoin payments can complete transactions within an hour at significantly lower costs.

Circle’s Vice President Yam Ki Chan emphasized the technological superiority of stablecoins. “At a technology level, it’s a better form of money. There are things you can do with stablecoins with logic and conditionality that you cannot do with the best form of non-blockchain based digital money today.”

Industry experts anticipate stablecoins will continue expanding beyond crypto trading into mainstream financial applications, with Asia playing a significant role in this evolution as regulatory clarity emerges across the region.