The regulatory landscape for stablecoins is evolving at remarkable speed across the globe. A growing number of jurisdictions are moving from exploratory consultations to full legislative implementation, driven by the policy goal to create innovation‑friendly yet prudentially robust frameworks that can accommodate the rapid institutionalisation of digital asset markets. Stablecoins are no longer viewed as a niche product by financial institutions and regulators.
The Swiss legislature has finally joined the regulatory development of comprehensive stablecoin licensing, offering and trading regimes. In October 2025, a comprehensive consultation draft was presented by the Federal government. The draft seeks to modernise Switzerland‘s prudential framework by replacing the former fintech licence (article 1b Banking Act) with a new payments institution category (Zahlungsmittelinstitut) empowered to issue positively regulated, single‑currency stablecoins, and by introducing a separate crypto‑institution (Krypto-Institut) regime for custody, trading and other services involving cryptocurrencies. In addition to the two new prudential licensing categories, the draft contains amendments across the core financial market “architecture“ laws with the aim to strengthen client‑fund segregation and market disclosure. Further, it imposes AML obligations throughout a stablecoin‘s life cycle.ycle.
This edition of CapLaw is largely devoted to stablecoin regulation. Benjamin Leisinger and Fabrice Eckert‘s article reviews the draft regarding payment institutions, while Lukas Staub‘s contribution takes a look at the proposed regulation of crypto-institutions. Taking up a wider perspective, a highly influential development is occurring in the United States, where the GENIUS Act – discussed in more detail in Thomas Werlen, Nicolas Curchod and Simon Weber‘s contribution in this CapLaw edition – has significantly shaped global institutional interest in stablecoins and other DLT‑based instruments. The Act represents the first comprehensive federal stablecoin statute in the U.S., shifting oversight from securities regulators to banking regulators, requiring full 1:1 reserves, prohibiting interest‑bearing stablecoins, and introducing separate regimes for domestic and foreign issuers. It has already become a global reference point: U.S. regulatory clarity has materially strengthened the comfort level of global financial institutions, with 2025 marking a notable acceleration of institutional adoption of stablecoins.
In this editorial, the view across the globe is further expanded, followed by a consolidation of the current trends and hot topics across various jurisdictions. This leads to a strategic policy perspective on the Swiss consultation draft.
Dynamic development in APAC and the Middle East meets an established EU framework
Across the APAC region, several jurisdictions are pushing ahead with full statutory regimes for fiat-referenced tokens. Hong Kong‘s new Stablecoin Ordinance, which entered into force in 2025, requires licensing for issuers and mandates 1:1 reserves, buffers, and comprehensive AML/KYC oversight, while prohibiting interest‑bearing stablecoins and imposing strict controls on circulation monitoring for AML purposes. Singapore has now finalized the core features of its stablecoin regulatory regime, with MAS preparing draft legislation that will introduce a dedicated statutory framework. Beyond legislation, MAS continues to expand its broader digital‑asset strategy through initiatives such as tokenised MAS‑bill trials, wholesale CBDC pilots, and ongoing work on interoperable settlement networks. Japan, which is among the most advanced Asian jurisdictions in terms of stablecoin regulation, already operates a fully implemented stablecoin regime under the Payment Services Act (PSA). Under this framework, stablecoins can only be issued by licensed banks, trust companies or fund transfer service providers, and issuers must ensure robust reserve arrangements. Australia, too, has moved decisively toward a comprehensive regime: ASIC‘s 2025 class‑order exemption permits intermediaries to distribute licensed AUD‑backed stablecoins, while Treasury‘s Tranche 1a Exposure Draft legislation proposes to regulate stablecoins within a tokenised stored‑value facility framework as part of a broader modernisation of the country‘s payments system. However, not all jurisdictions treat stablecoins in a liberal manner. For instance, Malaysia classifies stablecoins as securities when traded on an exchange and maintaining Securities Commission oversight over any listing. Although broader liberalisation is under consideration, stablecoins explicitly remain carved out from exchange self‑regulation due to monetary policy concerns. South Korea continues to develop its own comprehensive approach, in particular in light of financial stability and monetary policy concerns. Following the Virtual Asset User Protection Act (VAUPA), which came fully into force in July 2024 and mandates reserve segregation and strict custody standards, the government proposed the Digital Asset Basic Act (DABA) to establish a unified legal framework for digital asset oversight. In parallel, the Digital Asset Innovation Growth Act (DAIGA) introduces capital requirements for stablecoin issuers and formalises the supervisory role of the Bank of Korea. Together, these measures signal South Korea‘s intention to regulate not only issuance but also wallet interactions and cross‑border flows.
In the Middle East, notably the UAE, the regulatory momentum is particularly pronounced. The Abu Dhabi Global Market (ADGM) has taken a leading role by recognising USDC as an “accepted fiat‑referenced token“ and granting Circle, the issuer of USDC, a license to offer regulated services using its stablecoin. This reflects an active strategy to attract international stablecoin issuers and build a regional settlement hub. The UAE‘s broader digital asset regimes continue to mature, with several frameworks for token issuers and custodians now fully operational. This accelerates adoption across the region. Multiple Middle Eastern regulators are now positioning themselves as stablecoin‑friendly environments to attract global payment infrastructure and cross‑border settlement activity.
The European Union remains the most advanced jurisdiction with a comprehensive regime. The Markets in Crypto‑Assets Regulation (MiCA), fully applicable to stablecoins – either “E‑Money Tokens“ (EMTs) or “Asset‑Referenced Tokens“ (ARTs) – since June 2024, establishes a harmonised EU‑wide regime with prudential, governance, reserve, redemption and disclosure requirements, combined with a single‑market passport for issuers. The MiCA is a catch-all regime and also regulates other crypto-assets. Securities remain regulated under the existing disclosure and financial services framework, with specific DLT-related additions in member states. Enforcement has also intensified in the EU: By late 2025, non‑compliant ARTs and EMTs were being delisted, while significant tokens are subject to enhanced EBA supervision. MiCA is widely seen as providing legal certainty and a large addressable market of more than 300 million consumers, while some industry participants view it as too restrictive. Further, MiCA can be viewed as a “European Fortress“ in the stablecoin landscape, as the access of non-EU stablecoins to the European market is nearly impossible in practice.
The legislatures of three of the jurisdictions discussed in this editorial – the EU, Japan and Singapore – also consider the concrete possibility for a bank to issue a balance-sheet-backed stablecoin without the requirement to establish a dedicated reserve of assets.
Common themes and obstacles
Across jurisdictions, a set of common themes and obstacles has begun to crystallise. Regulators worldwide are converging on the core principles of full reserve backing, strict redemption rights, robust custody standards, and enhanced disclosure, reflecting a broadly shared policy concern that stablecoins, if left unchecked, could affect financial stability, market integrity, and monetary sovereignty. At the same time, regulation remains highly fragmented, with jurisdictions adopting bespoke, often incompatible frameworks – ranging from the expansive EU MiCA model and the U.S. GENIUS Act to more targeted Asian regimes – creating hurdles for cross‑border issuance and trading. This divergence is compounded by structural challenges: Foreign‑currency stablecoins raise concerns about dollarisation and erosion of supervisory visibility. Supervisory authorities still lack effective tools to oversee self‑hosted wallets and many jurisdictions struggle to apply the principle of “same risks, same rules“ to digital financial instruments. Yet, even amid these obstacles, momentum continues to accelerate. Many of the major economies advanced stablecoin legislation in 2025, and regulatory clarity has become a primary driver of institutional adoption, prompting banks, payment providers and corporates to integrate stablecoins into settlement and treasury operations. The global trend is thus one of rapid normalisation: Stablecoins are moving from the periphery of digital asset markets into the core of emerging financial infrastructure.
Strategic policy perspective on Switzerland
A strategic position analysis obviously suggests that Switzerland enters the global competition for digital‑asset regulation under fundamentally different structural conditions than larger markets. Unlike EU‑regulated financial institutions, which can leverage passporting into a unified internal market of roughly 300 million consumers, Swiss intermediaries operate in a home market of only around eight million people. This is a structural disadvantage that cannot be offset simply by mirroring EU‑style regulation. Where the EU can justify extensive regulatory obligations and “walling itself off“, Switzerland risks importing EU regulatory burdens without securing any of the corresponding market access benefits, nor would a recognition of Swiss rules as “equivalent“ resolve this asymmetry without a full passporting.
Against this backdrop, Switzerland‘s strategic imperative should not be regulatory imitation, but regulatory differentiation. Swiss stablecoin legislation could only truly strengthen the Swiss financial center if it produces a distinct, proportionate and internationally competitive framework, rather than a “mini‑MiCA“ approach that recreates European obligations without European opportunities. What the market requires is a regulatory architecture grounded in Swiss strengths – independence, efficiency, legal clarity and the primacy of self‑responsibility – that enables cross‑border business models to operate from Switzerland despite the country‘s small domestic market. This includes designing licensing categories that are genuinely enabling rather than restrictive, and ensuring that prudential requirements are aligned with actual operational risks rather than set as abstract extensions of foreign templates.
There is also a temporal dimension to Switzerland‘s strategic position. While the 2021 DLT Act was internationally recognized as a pioneering framework, in particular with the rather widely used ledger-based securities enshrined in articles 973d et seqq. CO, the legislative development has since lagged behind the rapid evolution of technology and markets. As foreign jurisdictions accelerate, Switzerland now faces a credibility risk: without timely and pragmatic reforms, particularly in the fast‑moving stablecoin sector, it risks losing the relevance it built as an early mover in digital assets. The consultation draft therefore comes at a critical moment. A positive, innovation‑oriented stablecoin regime is not simply desirable; it is necessary to avoid Switzerland being sidelined as global adoption of digital assets accelerates.
A persistent and often underestimated weakness of the Swiss regulatory environment lies not in the (lack of) substantive rules themselves, but in the predictability and efficiency of licensing procedures. While the consultation draft introduces two new license categories that might, in principle, enhance Switzerland’s competitiveness and adoption of stablecoins, their practical value depends on whether the prudential licensing process becomes faster, clearer and more reliable. In practice, license applicants have frequently faced lengthy, opaque and iterative approval processes, in particular with organizational reviews extending over substantial periods and characterized by repeated – and at times non‑substantive or unexpected – requests for additional information. These frictions have not merely caused delays. They have led to the withdrawal of license applications and deterred both domestic and foreign innovators from using Switzerland as a base for regulated activity. For investors and founders, the economic calculus is straightforward: Without a clear understanding of what requirements must be met, in what form, and within what timeframe a license can be obtained, the risk‑adjusted cost of building a regulated business in Switzerland becomes disproportionately high.
A credible strategic positioning therefore requires that any new regulatory framework be paired with a modern, transparent and time‑bound licensing practice. This includes binding procedural timelines, early completeness checks, predictable milestones, and the publication of realistic processing time statistics. Without these elements, even the most carefully calibrated regulatory design will fail to achieve its intended effect: Innovative market participants will continue to favor jurisdictions that offer speed, clarity and procedural certainty, and Switzerland risks falling further behind in the competition for high‑quality digital‑asset business models.
The international landscape shows that stablecoin regulation is advancing at impressive speed, with the U.S. GENIUS Act and the EU’s MiCA framework now setting global reference points and major APAC jurisdictions deploying increasingly mature regimes. Switzerland cannot afford to remain on the sidelines of this development. As a small, non‑passporting market, it must compete not through scale but through the quality, clarity and efficiency of its regulatory framework. The consultation draft moves Switzerland in the right direction by providing long‑awaited statutory foundations for Swiss‑franc‑linked stablecoins and for crypto‑asset service providers, and by modernizing certain elements of the financial market architecture.
However, Switzerland’s strategic position will ultimately depend less on the text of the law than on the ability to adapt with rapid developments and to operate plannable and efficient licensing procedures. The current prudential licensing practice, characterized by lengthy timelines, repeated information requests and unpredictability, has already discouraged market entrants and risks eroding Switzerland’s competitive appeal. Against this backdrop, Switzerland should adopt the stablecoin draft law, even if conservative and overly complicated in parts, but must pair it with meaningful improvements to approval processes and commit to continuous regulatory evolution. In a field that is moving as fast as digital‑asset regulation, Switzerland cannot simply enact this law and pause for another five years. It must treat this reform as the beginning of an ongoing alignment with a rapidly shifting global environment, technical innovation and market requirements.
Yves Mauchle (yves.mauchle@bakermckenzie.com)