Asia’s Stablecoin Race: National Currency Projects Challenge Dollar Dominance
Tiger Research’s “State of the Asian Stablecoin Market in 2026” finds Asia’s stablecoin market has become a strategic battleground for digital sovereignty as total stablecoin market capitalization approaches $300 billion. About 99% of global stablecoins remain dollar-pegged, while national currency–pegged stablecoins in Asia account for under 1%, prompting governments to act to preserve monetary control. Regulatory responses vary: Singapore legalized stablecoins with a framework (2024) supporting SGD-pegged issuance; Hong Kong implemented comprehensive rules in August 2025; Japan legislated issuer permissions in 2023 focusing on banks and trust firms; South Korea allows market-led KRW initiatives with regulators monitoring; China bans private stablecoins and prioritizes its digital yuan (e-CNY). Tiger Research highlights technical challenges (peg stability, scalability, interoperability), infrastructure needs (digital ID, real-time settlement), and security practices (reserve standards, audits, liquidity provisions). Key growth drivers include mobile payment adoption, cross-border trade, youthful demographics, and clearer regulation in hubs like Singapore and Hong Kong. Projections to 2027 foresee regulatory convergence, broader institutional adoption, and more retail integration, but fragmentation risk remains if national systems lack interoperability. For traders: watch issuance timelines, adoption metrics, cross-border testing results, and regulatory announcements in Singapore, Hong Kong, Japan, South Korea, and China — these will affect regional stablecoin supply, onshore liquidity, and FX settlement flows.
Neutral
The report signals both opportunity and constraint for crypto markets. Short term, clearer stablecoin regulation in Singapore, Hong Kong and Japan reduces regulatory uncertainty for institutional participants, which can support onshore stablecoin liquidity and trading activity (mildly bullish for Asian crypto markets and stablecoin usage). However, the dominance of dollar-pegged assets (~99%) and China’s ban on private stablecoins limit rapid market rebalancing; national stablecoins currently represent <1% of market cap, so material impact on global FX or crypto valuations is limited near term. Fragmentation and interoperability risks introduce medium- to long-term uncertainty: incompatible national systems could reduce cross-border liquidity and complicate settlement, potentially depressing volumes and increasing regional FX frictions (bearish for cross-border crypto flows). Historical parallels: regulatory clarity in jurisdictions (e.g., U.S. and EU stablecoin proposals) has previously boosted institutional engagement and on-chain liquidity, while outright bans (as with China’s 2021 crypto ban) have shifted volumes offshore without eliminating demand. Traders should monitor issuance events, reserve disclosure practices, and cross-border pilot results — positive adoption and audit transparency would be bullish for onshore stablecoin pairs and regional FX settlement, while fragmentation, restrictive policies, or reserve scandals would be bearish. Overall, the balanced mix of regulatory progress and structural constraints justifies a neutral categorization.