Asia's Financial Hubs Vie for Stablecoin Dominance
Asia's Financial Hub Race Heats Up Amid Stablecoin Push
The race to become Asia's premier financial hub is intensifying, with stablecoins playing a crucial role. While Singapore and Hong Kong have long been considered leaders, other cities are making significant strides.
Osaka is emerging as a contender, with Governor Hirofumi Yoshimura recently highlighting the success of the “Osaka International Financial City” initiative. This initiative has attracted 27 overseas financial institutions and 650 startups, signaling Osaka's ambition in the next-generation financial landscape.
Korea's Focus on Retail Stablecoin Payments
South Korea is shifting its focus from central bank digital currencies (CBDCs) to private stablecoins. The Financial Services Commission plans to introduce a regulatory bill in October 2025 to facilitate the rollout of won-backed stablecoins. The Bank of Korea has also established a digital asset team to enhance oversight and market development.
Major players like KakaoBank are preparing to enter the market, targeting retail payments and cross-border remittances. South Korea's advantage lies in its advanced digital infrastructure and high fintech adoption rates. With widespread mobile payments and online banking, the country is well-prepared for consumer-oriented stablecoin adoption.
Japan's Comprehensive Stablecoin Legal Framework
Japan has established one of the most comprehensive legal frameworks for stablecoins globally. The revised Payment Services Act, enacted in June 2025, classifies stablecoins as “electronic payment instruments,” distinguishing them from cryptocurrencies. The Financial Services Agency (FSA) strictly regulates issuers, limiting them to banks, trust companies, and licensed money transfer firms.
JPYC, registered as a money transfer operator, will launch a yen-pegged stablecoin in autumn 2025, targeting an initial issuance of $68 million, with a long-term goal of $6.8 billion. Circle introduced USDC to Japan in March 2025 via SBI VC Trade, and Mitsubishi UFJ Trust is developing its Progmat Coin system.
Japan's yen-backed stablecoin is legally recognized as a payment instrument, with expected use cases including carbon credit trading, trade settlements, and cross-border payments.
Hong Kong and Singapore: Licensing and Regulation
Hong Kong implemented its Stablecoin Ordinance on August 1, 2025, introducing Asia’s first comprehensive licensing regime. Issuers must maintain full reserves in high-quality liquid assets and comply with strict anti–money laundering and KYC requirements. The first licenses are expected in early 2026, with over 40 firms preparing applications.
Singapore enacted its Digital Token Service Provider (DTSP) framework in June 2025, setting strict requirements and generally restricting overseas-focused issuers. While Paxos gained approval in 2024, market development remains ongoing. Singapore's approach emphasizes long-term stability over rapid expansion.
China's Yuan-Backed Stablecoin Ambitions
Reports indicate that Beijing is exploring a yuan-pegged stablecoin to reduce reliance on the US dollar and promote renminbi internationalization. Initial rollouts are planned in Hong Kong and Shanghai.
China's existing CBDC deployment raises questions about the role of private stablecoins. However, a yuan-backed stablecoin could significantly reshape Asia’s financial landscape, leveraging China's policy scale and market influence.
Competing Models for the Future
The stablecoin landscape is redefining the concept of an Asian financial hub. Japan leads in legal frameworks and enterprise adoption, Korea in consumer infrastructure, Hong Kong in regulatory credibility, Singapore in cautious long-termism, and China in currency internationalization.
Future financial leadership will depend on capital concentration, regulatory clarity, real-world utility, and policy agility. The balance of these elements will likely determine which city emerges as Asia’s next dominant financial center.