The global financial landscape is undergoing radical changes. The recent approval of the "Genius Act" in the United States, which regulates stablecoins, has triggered a series of swift responses from governments and central banks around the world. This legislation not only introduces the concept of digital dollars but also marks the beginning of a global competition that could reconfigure the nature of money, cryptocurrencies, and Central Bank Digital Currencies (CBDCs).
Europe and the Digital Euro: A Forced Adjustment
Historically, the European Central Bank (ECB) had conceived a centralized digital euro, operating on a private blockchain and accessible only through traditional banking institutions. However, the momentum generated by the U.S. law and the predominance of dollar-backed stablecoins, which account for 98% of the market, have forced Brussels to reconsider its strategy.
With the threat of the euro losing relevance in this new ecosystem, the ECB is seriously evaluating the possibility of implementing a digital euro on a public blockchain, possibly using technologies like Ethereum or Solana. Although no definitive decision has been made yet, the intention to protect the euro's sovereignty is apparent. However, this urgency contrasts with the lack of interest among the European public in changing their payment habits, as many still prefer cash and cards for their everyday transactions. Despite this, the ECB maintains its timeline and expects to make a final decision by the end of 2025.
Asia at a Crossroads: Control and Innovation
The U.S. law is also having a significant influence in Asia, leading its strongest economies to reconsider their approaches.
China: Innovation Under Strict Control
China, known for its stringent control through the digital yuan (e-CNY), is considering the creation of a stablecoin backed by the yuan. The government is likely to use Hong Kong as a "testing ground," allowing this stablecoin, linked to the offshore yuan (CNH), to compete in international markets without relaxing the capital controls it maintains on the mainland. Hong Kong thus presents itself as a hub of innovation, attracting both investments and talent in the crypto sector while the rest of the nation remains closed off to that world.
Japan: A Shift in Financial Policy
After years of strict regulations, Japan is on the verge of approving its first stablecoin linked to the yen (JPYC). Additionally, it is undertaking tax reforms that could reduce cryptocurrency capital gains tax from 55% to a fixed 20%. On the other hand, the Bank of Japan is adopting a conservative approach, prioritizing the improvement of existing payment systems rather than accelerating the adoption of a CBDC.
South Korea: Supporting Crypto Innovation
South Korea, with a strong focus on innovation in the crypto space, has seen eight of its major banks join forces to launch a stablecoin in won (KCW) by 2026. Furthermore, the government is promoting an ambitious plan to legalize cryptocurrency ETFs and even allow pension funds to invest in digital assets. In fact, the Bank of Korea has decided to suspend its CBDC pilot program, focusing on fostering a private crypto ecosystem instead of a state-controlled one.
United States: Regulation to Protect or Control?
The "Genius Act" establishes, for the first time, a clear regulatory framework for the stablecoin sector in the United States. This regulation requires licensed issuers to back their coins with cash or treasury bonds on a 1:1 basis, provide information about their reserves monthly, and protect users' funds.
However, one concern persists: many fears associated with CBDCs, such as surveillance and programmable money, have not disappeared but have been transferred to private companies. According to the new legislation, stablecoin issuers must comply with the Bank Secrecy Act, which entails monitoring transactions and reporting suspicious activities. Authorities can request information and freeze wallets, often without the legal oversight that one would expect if the government were managing the system directly.
Diversity of Strategies Globally
While some countries follow a similar path, others opt for alternatives. India is making steady progress in the development of its digital rupee, which has demonstrated advanced status with over 6 million users participating in its trials. In contrast, countries like Canada and Australia have decided to pause their retail CBDC projects, citing a lack of widespread interest and concerns about potential risks to the stability of the banking system.
A Future Under Construction: Greater Convenience or Greater Surveillance
The new regulation on stablecoins in the United States has triggered a series of reactions that accelerate the integration of digital assets into global finance. This raises a promising future for cryptocurrencies, as blockchains and decentralized infrastructure are being publicly discussed at the highest levels of power.
Yet, the normalization of stablecoins also entails adopting characteristics of the system they were meant to replace: surveillance, control, and centralization in the hands of large corporations. For users, this could translate to greater convenience and access but also increased data collection and oversight of their financial behavior.
The advent of this new era poses a significant dilemma: whether this trajectory will lead to greater financial freedom or unprecedented control.
To continue exploring the implications of these changes in the global financial market and other relevant topics, readers are invited to explore more on the blog.
