TL;DR
The State of Stablecoin Law in 2026
Stablecoin regulation changed character between 2024 and 2026. What were previously proposals became enacted statutes under active enforcement across multiple jurisdictions [8]. Stablecoins are now regulated under dedicated law in the US, the EU, and Hong Kong, among others, and every major regime prohibits paying interest to holders [8][10].
Despite differences in structure, the major frameworks converge on a common set of principles [8]:
- Mandatory licensing for issuers and, in most regimes, for service providers, under financial supervision
- One-to-one backing of tokens in high-quality liquid reserves, typically cash and short-dated government securities
- Redemption at par value for holders
- A prohibition on paying yield or interest to holders
- AML and KYC screening and controls, including transfer-level compliance under the Travel Rule
The result is not a single global rulebook. It is a set of jurisdiction-specific frameworks that share a common foundation, which means the compliance status of a given stablecoin depends on the jurisdictions a payment touches [8].
The United States: The GENIUS Act
The GENIUS Act was signed into law on July 18, 2025 as Public Law 119-27, establishing the first US federal framework for payment stablecoins [1]. It restricts issuance to permitted payment stablecoin issuers and sets requirements including one-to-one reserve backing in cash and short-dated Treasuries, monthly reserve disclosures, AML and sanctions compliance, holder protections, and a prohibition on yield-bearing payment stablecoins [1][2].
The Act's implementing rules were still being written through 2026. Federal regulators issued ten notices of proposed rulemaking but did not finalise them by the statutory deadline of July 18, 2026. The Act's effective date is set as the earlier of 18 months after enactment, meaning January 18, 2027, or 120 days after final rules are issued; because final rules were not issued by the anniversary, the January 18, 2027 date applies [2]. Our blog on the GENIUS Act at one year covers the rulemaking status in detail.
The Act also divides supervision by issuer size. Issuers with consolidated outstanding issuance of not more than ten billion dollars may opt for state-level supervision where the state regime is substantially similar to the federal framework [2].
The European Union: MiCA
The EU Markets in Crypto-Assets Regulation (MiCA) became fully applicable on December 30, 2024, and its transition period for crypto-asset service providers ended on July 1, 2026 with no extension [3]. After that date, any provider serving EU clients without MiCA authorization is in breach of EU law [3][4].
MiCA divides public stablecoins into two categories [5]:
- E-money tokens (EMTs) are pegged to a single fiat currency and must be issued by an authorized credit institution or electronic money institution.
- Asset-referenced tokens (ARTs) reference multiple assets, such as a basket of currencies or commodities, and require a separate ART authorization.
Under MiCA, tokens must be backed one-to-one by liquid assets and be redeemable at par at any time, and issuers may not pay interest on EMTs or ARTs [5][8]. A practical consequence of the July 2026 deadline was that USDT was delisted across EEA-regulated venues, because Tether did not apply for EMT authorization, while Circle's USDC and EURC retained their listings under Circle's EU authorization [4]. Our blog on MiCA after July 2026 covers what changed at the deadline.
MiCA also continues to be refined through delegated acts and technical standards developed by the European Commission, ESMA and the European Banking Authority [8]. One such development, an EBA opinion published in February 2026, clarified that transferring an e-money token can qualify as a payment service under the second Payment Services Directive, because an EMT is legally a form of electronic money.
Asia and Other Jurisdictions
Several jurisdictions outside the US and EU have moved from experimentation to active supervision.
Hong Kong brought its Stablecoins Ordinance into effect on 1 August 2025 and granted its first stablecoin issuer licences in 2026 [7]. The regime applies to issuers of fiat-referenced stablecoins in Hong Kong, and to issuers of Hong Kong dollar-referenced stablecoins even where issued outside Hong Kong [7].
Singapore operates its stablecoin framework under the Monetary Authority of Singapore, applying to single-currency stablecoins pegged to the Singapore dollar or a G10 currency and issued in Singapore, with a requirement that reserves be held at no less than 100% of coins in circulation [6].
The UAE regulates fiat-backed payment tokens at the federal level under the Central Bank of the UAE's Payment Token Services Regulation, effective from August 2024 [8].
Japan regulates fiat-backed stablecoins as electronic payment instruments under amendments to its Payment Services Act, effective from June 2023 [8].
Across these regimes, the shared principles hold: licensing of issuers under financial supervision, one-to-one reserve backing, redemption at par, and AML and KYC controls [8].
The Travel Rule and Transfer-Level Compliance
Beyond issuer requirements, stablecoin transfers are subject to transfer-level AML compliance under what is commonly called the Travel Rule.
The Travel Rule requires issuers and payment providers to collect and share sender and recipient information for qualifying transfers, applying the same standard used for traditional wire transfers [9]. This is an obligation on the entities facilitating the transfer rather than on the underlying token. Our blog on the Travel Rule for cross-border payments covers how it applies to businesses in practice.
The Travel Rule has been widely adopted. In its 2026 targeted update, the FATF reported that 83% of surveyed jurisdictions had passed legislation implementing the Travel Rule, up from 73% (85 of 117) in 2025, with a further group of jurisdictions reporting implementation under way [9]. In the EU, the Transfer of Funds Regulation implements this requirement for crypto transfers [8].
Where Compliance Responsibility Sits
For a business considering stablecoin settlement, the practical question is which obligations fall on the business itself and which fall elsewhere.
Stablecoin regulation is primarily issuer-led: the substantive requirements on reserves, redemption, governance, disclosures and supervision apply to the entity issuing the stablecoin [8]. Service-provider requirements, including licensing and Travel Rule compliance, apply to the regulated intermediaries that move the tokens [9].
A business that uses a licensed provider's stablecoin settlement infrastructure, rather than holding or converting stablecoins itself, generally faces the same obligations as it would for any cross-border payment: KYC and KYB on its counterparties, sanctions screening, and transaction monitoring. The stablecoin-specific compliance, meaning the Travel Rule at the transfer layer, the GENIUS Act issuer requirements, and the MiCA EMT rules, is handled by the provider and the stablecoin issuer [8].
This division is why the choice of provider and the choice of stablecoin matter. The compliance status of the specific stablecoin in a payment flow depends on both the issuer's authorizations and the jurisdictions the payment touches, and a given token may be authorized in one jurisdiction and unavailable on regulated venues in another [4][8].
How the Frameworks Interact
Because the major frameworks are jurisdiction-specific, a stablecoin or provider operating across borders is subject to more than one at once. The frameworks share core principles but differ in detail, and in some areas the details diverge, for example in the specific reserve composition each regime requires [8].
Reserve and redemption rules are converging across jurisdictions toward one-to-one high-quality reserves and redemption at par [8]. AML and sanctions requirements are also tightening across regimes [9]. The direction of travel is toward greater alignment on principles, with implementation detail remaining jurisdiction-specific [8].
For a comparison of how the US, EU, Canada, Hong Kong and Singapore payment and digital-asset frameworks fit together, see our global payment licensing landscape guide. For how stablecoin settlement works operationally, see our complete guide to stablecoin payments.
Sources
[1] U.S. Congress. "S.1582 - Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, 119th Congress (Public Law 119-27)." Signed July 18, 2025.
[2] Congressional Research Service. "Stablecoin Legislation: An Overview of S. 1582, GENIUS Act of 2025." Congress.gov.
[3] European Securities and Markets Authority (ESMA). "Statement on the end of transitional periods under MiCA." 17 April 2026.
[4] European Securities and Markets Authority (ESMA). "Public Statement: ESMA calls on unauthorised crypto-asset service providers to cease services as the MiCA transitional period ends." 23 June 2026.
[5] European Securities and Markets Authority (ESMA). "Markets in Crypto-Assets Regulation (MiCA)."
[6] Monetary Authority of Singapore. "MAS Finalises Stablecoin Regulatory Framework." 15 August 2023.
[7] Hong Kong Monetary Authority. "Regulatory Regime for Stablecoin Issuers" (Stablecoins Ordinance, effective 1 August 2025).
[8] EY. "Global stablecoin regulation: a comparison of frameworks." September 2025.
[9] Financial Action Task Force (FATF). "Targeted Update on Implementation of the FATF Standards on Virtual Assets and VASPs" (seventh update). July 2026.
[10] BVNK. "Global stablecoin regulations 2026: What enterprises need to know." January 2026.
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