From a macro perspective, stablecoins are undergoing a major reshuffle.

In July, U.S. President Donald Trump signed the GENIUS Act, marking the first federal stablecoin law. In August, Hong Kong’s Stablecoin Ordinance came into effect — the first regulatory framework of its kind in the region. Meanwhile, Japan, South Korea, and other major economies are fast-tracking rules to allow licensed issuers to bring stablecoins to market.

In short, the market has entered a genuine “regulatory window.” Stablecoins are evolving from a grey-area liquidity tool into financial infrastructure where compliance and innovation can advance in parallel.

I. Why focus on regulated stablecoins?

Within the broader taxonomy, regulated stablecoins hold a distinct and critical position.

Demand now extends well beyond on-chain trading. For crypto-native users, they remain essential for hedging and liquidity. For traditional institutions, they are increasingly seen as instruments for cross-border settlement, treasury management, and payments.

Historically, tokens like USDT scaled organically with demand. Yet despite their size, they operated in a regulatory grey zone and faced persistent questions around transparency and compliance risk.

Regulated stablecoins, by contrast, are built “compliance-first”: issued by supervised entities, licensed in their home jurisdictions, and backed by clear reserves and legal obligations.

Put simply: a regulated issuer + the right license + transparent reserves and enforceable liability. Each token is tied to identifiable regulators and custody arrangements that both users and institutions can verify.

That’s why these assets can circulate on-chain while also appearing in corporate filings and compliance reports—serving as an “official bridge” between TradFi and crypto.

Source: Regulated stablecoins on imToken Web (web.token.im).

At imToken, we look at stablecoins through the lens of user needs—there is no single narrative anymore. In our framework, Stablecoins, Simplified: A Practical Guide to User Needs, we categorize stablecoins into several user-driven, practical segments.

Within this framework, regulated stablecoins (USDC, FDUSD, PYUSD, GUSD, USD1, etc.) are not intended to replace USDT; they operate in parallel—providing compliant, lower-risk rails for cross-border payments, institutional workflows, and other regulated use cases.

If USDT’s role has been to provide “global crypto liquidity,” the aim of regulated stablecoins is to embed stablecoins into the fabric of financial systems and everyday life.

II. The landscape of major regulated stablecoins

Across regions, the paths may differ—but the direction is converging: moving away from grey-area liquidity toward compliant financial interfaces. Their use is no longer limited to exchange matching and arbitrage; it now extends to cross-border payments, corporate treasury, and even everyday spending.

At the global level, regulated stablecoins are evolving along a few clear development tracks.

United States

• USDC (Circle): Backed by cash and short-duration U.S. Treasuries, with regular attestations and 1:1 redeemability. Widely adopted by institutions and among the few tokens that can appear in audited financial statements.
• USDP (Paxos Trust Company): Issued under NYDFS oversight. Smaller in circulation than USDC, but clearly positioned for institutional payments and settlement.
• PYUSD (PayPal): Designed primarily for retail payments rather than trading, aiming to bring stablecoins into everyday spending and cross-border transfers.

Hong Kong

With the Stablecoin Ordinance taking effect in August 2025, Hong Kong became the first jurisdiction to establish a comprehensive regulatory framework covering issuance, reserves, and custody. Stablecoins issued under this regime are treated as supervised financial instruments rather than grey-area assets. FDUSD (First Digital) is a representative example.

Japan

JPYC is the first approved JPY stablecoin from JPYC Inc., issued under a money transfer service license and backed by liquid assets such as government securities. The Financial Services Agency (FSA) plans to grant additional approvals as early as this autumn. JPYC has already completed its registration for remittance operations and intends to issue across Ethereum, Avalanche, and Polygon.

South Korea

A regulatory sandbox in South Korea is testing KRW-stablecoin use in cross-border payments and B2B settlement.

The common thread is clear: regulated stablecoins are not designed to dethrone USDT or USDC. Instead, they target scenarios that demand compliance and transparency. The narrative is shifting from “grey liquidity for trading” to “lawful interfaces for global finance.”

Different paths, same destination: regulated stablecoins are emerging as a parallel lane to USDT—not to seize liquidity dominance, but to provide institutions, cross-border flows, and everyday applications with a legal, auditable, and regulator-friendly option.

III. What’s next?

In 2025, the biggest structural shift in TradFi is the broad rollout of regulated stablecoins. Competition is moving away from scale and trading volume toward regulatory depth and real-world adoption.

Whether it is Hong Kong’s first-mover ordinance or tighter U.S. oversight of USDC and PYUSD, the signal is the same: the stablecoins that will truly serve global users and traditional capital are those that fuse off-chain compliance with on-chain architecture.

The basis of competition is shifting—from “who holds the most dollar reserves” to “who can enter real-world use cases the fastest”: cross-border settlement, corporate treasury, and retail payments. A new wave of compliance-first entrants is emerging

Example: USD1

Backed by strong traditional capital and policy ties, USD1 has emphasized compliance and global utility from the outset. With political support from the Trump family, it has achieved a striking zero-to-one breakthrough within just six months.

Since March, supply has surged to USD 2.1B, surpassing FDUSD and PYUSD to become the world’s No. 5 stablecoin (CoinMarketCap).

USD1 is now listed on major CEXs including HTX, Bitget, and Binance—whereas PYUSD, despite PayPal’s brand, is still struggling to gain adoption.

At the same time, Liquidity-as-a-Service infrastructure is on the rise, aiming to make stablecoins not just on-chain tickers but callable settlement APIs for global use.

In the near future, cross-border payments, corporate treasury, and even personal spending are likely to find a new balance—between USDT’s grey-market liquidity and the whitelist systems of regulated stablecoins.

Zooming out, the stack is branching into a plural, parallel structure:

• USDT remains the liquidity engine of the global crypto market.
• Yield-bearing stablecoins meet capital-growth needs.
• Non-USD stablecoins introduce a multipolar narrative.
• Regulated stablecoins are increasingly embedding into real-world finance.

Over the past decade, USDT embodied organic, grey-zone growth that fueled global crypto liquidity. Products like USDC bridged the gap between grey and white. Now—with the GENIUS Act in the U.S., Hong Kong’s ordinance in force, and pilots underway in Japan and South Korea—regulated stablecoins are entering a genuine window of opportunity.

This time, stablecoins will not just serve on-chain users. They will appear in cross-border settlement, corporate treasury, and everyday spending.

That is the essence of regulated stablecoins: to move beyond the crypto bubble and embed themselves into the routines of finance and daily life.