7. Why it matters now
Through 2024 and 2025 the regulatory perimeter for stablecoins moved from speculation to text. MiCA Title III for asset-referenced tokens (ARTs) and Title IV for e-money tokens (EMTs) are in force across the EU, with the European Banking Authority (EBA) and national competent authorities working through authorisation. The Hong Kong Stablecoins Ordinance was passed and gazetted in 2024 with the licensing regime commencing 1 August 2025, and the Hong Kong Monetary Authority (HKMA) has been running its sandbox in parallel, with several Hong Kong dollar (HKD) stablecoin contenders in the queue.
The GENIUS Act framework set the federal perimeter for permitted payment stablecoin issuers, displacing the patchwork of state money-transmission regimes for in-scope issuers. Japan's Payment Services Act (PSA) stablecoin amendments have been in force since June 2023; JPYC took the FTSP route and launched the first FSA-approved yen stablecoin in October 2025, while bank-issued and trust-issued products have been shipped by megabank consortia such as Progmat. Korea's two-phase build-out started with the Virtual Asset User Protection Act (VAUPA), in force July 2024, focused on user protection and unfair-trading rules, with the Phase 2 Digital Asset Basic Act including stablecoin issuance frameworks in legislative progress.
The net effect is that for the first time, an institution can answer the question "is this stablecoin in-scope" with reference to text rather than to inference. That changes what compliance, treasury, and product teams can actually do. It is also why the categorisation matters: under each of these regimes the four flavours are treated separately, and getting them confused costs time at minimum and authorisation at maximum.
8. Common confusions
A short list of the misconceptions you will hear in meetings, and what to say back.
"BUIDL is a stablecoin." It is not. It is a tokenised money-market fund (MMF). It is regulated as a fund, restricted to qualified holders, distributes yield, and sits in a different bucket on the treasury policy. The fact that it trades near par does not make it a stablecoin any more than a money-market fund share is a dollar bill. See Part 4 for the structural breakdown.
"USDC and USDT are functionally identical." They are similar in shape and use case, and they are both payment stablecoins by design. They differ in issuer jurisdiction, reserve disclosure cadence, attestation methodology, redemption practice for non-direct holders, and which regulators they answer to. For an institution making a treasury or counterparty decision, those differences are the entire decision.
"An ART is just a multi-currency stablecoin." It is, and it is also a different regulatory category with different authorisation, different reserve rules, and different supervisory treatment. The "just" is the word doing the damage. Calling an ART a stablecoin in EU compliance correspondence will produce a request for clarification.
"Algorithmic means it has no reserves." Some algorithmic designs hold partial reserves, some hold none, some are dual-token seigniorage models, some are overcollateralised in volatile crypto assets. The common feature is that the peg mechanism does not rely on full off-chain fiat-equivalent reserves with a redemption right. That is what the regulatory regimes have moved against.
"A regulated stablecoin issuer is a bank." Mostly not. Under MiCA, EMT issuers can be credit institutions or electronic money institutions, the latter of which are not banks. Under GENIUS, permitted issuers can be bank subsidiaries or qualified non-bank entities. Under Japan's PSA, trust companies and fund-transfer service providers (FTSPs) are explicit issuance routes alongside banks. The deliberate design across regimes is to allow non-bank issuance under a narrow, reserved, redeemable model rather than to channel everything through bank deposits.
"All stablecoins are bearer-transferable on-chain." Payment stablecoins are, subject to issuer freeze and blocklist powers. Tokenised MMFs are not, in practice; they enforce permissioned transfer at the token contract level, restricted to whitelisted addresses representing eligible holders. If you are designing a flow that assumes free transferability, check which instrument you are touching.
The macro reason these distinctions matter is the singleness-of-money property: at par, any dollar should be a perfect substitute for any other dollar across the system. The BIS Garratt-Shin paper is the cleanest treatment of why a stablecoin and a tokenised deposit are not interchangeable, even when both look identical on a price chart. The four-flavour taxonomy is the operator-level translation of that argument.