There’s a number that should reframe every stablecoin policy debate in the region, and it isn’t flattering. As of early 2026, the global stablecoin market is worth north of US$300 billion, and about 99.76 per cent of it is backed by the US dollar. Non-dollar coins, every euro, yen, ringgit and Singapore dollar experiment combined, split the remaining quarter of one per cent.
For two years, the region’s answer to that has been the same: write a better rulebook. Singapore built an open, multi-currency licensing regime under the Monetary Authority of Singapore and drew in issuers like StraitsX, Paxos and Circle. Malaysia is running the region’s most-watched ringgit stablecoin pilot, bank-anchored and Shariah-inclusive.
These are thoughtful pieces of policy, and the instinct behind them is right: digital money is becoming a question of sovereignty, and sovereignty is worth defending.
But a rulebook and a market are different things, and we keep confusing the two. That 99.76 per cent isn’t a gap in anyone’s licensing regime, but a verdict of sorts. Users, exchanges and treasurers have already chosen, and they chose the dollar, for its liquidity, its ubiquity across every wallet and venue, and the plain fact that it’s what everyone else is already holding.
You don’t legislate your way out of a network effect, and you can’t simply license a default into existence.
It’s worth looking at who set that default, because it wasn’t an accident. When the United States passed the GENIUS Act in July 2025, it did something the region should study closely. The law requires payment stablecoins to be fully backed one-to-one by dollar assets, which sounds like consumer protection and works like statecraft.
Every compliant token routes fresh demand into US Treasuries and widens foreign access to dollars. Washington understood that this contest isn’t won in the rulebook, it’s won in the reach. Whoever owns the default token exports their currency with it. China clearly agrees; it’s now drafting a yuan-stablecoin roadmap of its own. The big players are treating this as a distribution war. We’re treating it as a compliance exercise.
That’s the mismatch. A licence authorises a product; it doesn’t give anyone a reason to hold it. The best-regulated ringgit stablecoin in the world still has to compete against a dollar token that’s already in every wallet, already trusted, already the path of least resistance. In fintech circles, you hear the market’s indifference described, very politely, as “user preference for usability,” which is just a nice way of saying nobody cares where a coin was issued. Sovereignty on paper isn’t sovereignty in wallets, and no amount of regulatory craft closes that gap on its own.
The fair objection is that retail adoption may be beside the point. Maybe local-currency stablecoins aren’t built for consumers at all, but for business, cross-border settlement, remittances, corridor flows where banking relationships and regulation matter more than what sits in a shopper’s phone.
Also Read: Japan shows how non-USD stablecoins complement USDC and USDT
It’s a reasonable argument, and it’s partly true. But it doesn’t rescue the licensing-first strategy; it just moves the same problem upstream. The dollar’s incumbency in settlement is exactly the thing a regional coin has to dislodge, and incumbents don’t fall to frameworks. Retail or wholesale, it’s a battle for the default, and defaults are won on reasons to switch, not rules to comply with.
Here’s where the region’s real advantage has been hiding in plain sight, and where I think a marketer reads this problem differently than a regulator does. Southeast Asia doesn’t lack rails or rulebooks.
What it has, that almost no one else does, is distribution it already owns, the wallets and QR systems hundreds of millions of people open every day without thinking, from QRIS to PromptPay to the super apps that have quietly become default infrastructure. That’s the asset.
A local-currency stablecoin embedded as the native rail inside systems people already trust isn’t asking anyone to make a patriotic choice; it’s making the local option the easy one. Add corridors where a regional coin is genuinely cheaper and faster than a dollar round-trip, and you start giving people, retail and treasury alike, a concrete reason to switch that a licence never could.
None of this means the frameworks were wasted. They’re the floor. But a floor isn’t a strategy, and we’ve been mistaking one for the other, polishing the rules for money that keeps flowing in someone else’s currency. The awkward part is that the licensing is the easy bit. The hard part, the part that actually decides sovereignty, is distribution and trust. And that’s the part nobody’s resourcing.
Also Read: Taiwan’s stablecoin moment: Why the NTD could outshine the dollar
So the question isn’t whether the region can regulate stablecoins well. It plainly can. The question is whether it intends to contest the default itself, to fight for the thing people reach for first, or keep drafting careful rules while the digital dollar wins by simply being everywhere it already is.
On the present course, we’re reacting to a standard the dollar set and the GENIUS Act is now actively defending. Being part of rewriting the rules means fighting a battle that a rulebook, on its own, was never going to win.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.
Join us on WhatsApp, Instagram, Facebook, X, and LinkedIn to stay connected.
The post Southeast Asia can’t simply license its way to stablecoin sovereignty appeared first on e27.