Global Crypto and Stablecoin Race is On

2025 review - Genius Act and its ripple effect globally; China, Russia, Brazil, Japan and UAE joined the crypto and stablecoin race, creating or refining regulations and strategies

2025 was a watershed year for the U.S. How did other countries do? In this piece, a sequel to my previous post “2025, a Watershed Year in the U.S.”, I zoom in on five major economies: China, Russia, Brazil, Japan, and the UAE, highlighting the regulatory shifts, stablecoin strategies, and key developments that defined their years.

Following the passage of the Genius Act in the U.S., roughly 70% of global jurisdictions responded in one way or another. Some enacted new laws or updated existing frameworks to regulate crypto and stablecoins. Others accelerated CBDC rollouts while banning crypto, including stablecoins. A third group allowed CBDCs and stablecoins to coexist. Several countries issued their first local-currency–pegged stablecoins.

2025 was a year in which major economies wrestled with defending monetary sovereignty while, in different ways, confronting U.S. dollar dominance. Some leaned into CBDCs; others chose to operate within the reality of dollar hegemony.

Mainland China & Hong Kong: Divergent Paths

Since November 2025, Mainland China’s central bank and regulators have signaled tighter controls over all forms of crypto, including stablecoins and RWAs, reiterating a prohibitive stance.

These policies briefly pushed down China’s Bitcoin hashrate before it rebounded. One explanation is economic pressure: with slowing growth and strained fiscal revenues, local governments in regions with abundant and cheap energy, such as Xinjiang or Sichuan, might have quietly shielded Bitcoin miners. By Q4 2025, China accounted for 14% of global Bitcoin hashrate, down from 75% in 2019, trailing the U.S. (38%) and Russia (15%).

At the same time, Beijing has doubled down on its CBDC. In 2025, China’s CBDC processed RMB 16.7 trillion (about $2.38 trillion) in transactions, up from RMB 7 trillion in June 2024. Retail wallets reached 230 million, with 18.84 million institutional wallets. There is speculation that the CBDC could eventually displace private payment giants Alipay and WeChat Pay.

Internationally, China is pushing its CBDC through mBridge, a DLT-based platform for low-cost cross-border wholesale payments. Developed since 2021 by the BIS in cooperation with the central banks of China, Hong Kong, Thailand, Saudi Arabia, and the UAE, mBridge is EVM-compatible and positioned as an alternative to U.S.-dominated systems such as SWIFT.

Among mBridge’s full participants and more than 30 observers (including the U.S.), China holds a dominant position. In 2025, mBridge settled RMB 387 billion (about $55 billion) in transactions; 95% of the value used China’s CBDC.

Hong Kong, by contrast, has embraced a more open strategy. Its ambition is clear: to become Asia’s leading crypto and digital asset hub. In August 2025, the Stablecoin Ordinance took effect, requiring all fiat-referenced stablecoin issuers operating in Hong Kong, or issuing HKD-pegged stablecoins from abroad, to obtain licenses from the Hong Kong Monetary Authority.

In December, HashKey Holding Limited became the first Asian digital asset company listed on the main board of the Hong Kong Exchange, raising $206 million in its IPO.

Russia: Ready for a Leap

In 2024, Russia lifted its ban on Bitcoin mining, allowing registered institutions and individuals to mine. The legislation also permitted crypto, including stablecoins, for cross-border payments and trade settlement.

Building on this shift, Russia’s central bank released a proposal in December 2025 outlining a comprehensive framework for crypto exchanges, brokers, and market participants, including retail investor access. Enforcement is expected to begin in mid-2026. While no stablecoin-specific regime exists, stablecoins are allowed for cross-border payments. Algorithmic stablecoins and the use of crypto including stablecoins as money in Russia, remain prohibited; crypto is classified strictly as an investment asset.

Both the Moscow Exchange and St. Petersburg Exchange announced their plans to launch compliant crypto trading in 2026. In December 2025, Sberbank, Russia’s largest bank, completed a pilot issuing Russia’s first ruble-denominated loan backed by Bitcoin.

All this marks a dramatic turn, from viewing crypto as a systemic threat to embracing it as a tool for cross-border settlement and investment.

Brazil: Crypto + Pix

In November 2025, Brazil’s central bank (BCB) issued three resolutions clarifying the Virtual Assets Law, which took effect in June 2023. The resolutions define Virtual Asset Service Providers (VASPs), establish licensing requirements, and set guidelines for integrating crypto into Brazil’s FX and capital markets.

Brazil’s crypto market is highly active, with stablecoins accounting for about 90% of total crypto usage. Tether’s USDT alone commands about 80% market share. A key reason is Pix, the BCB-developed instant payment infrastructure that acts as a free on-ramp/off-ramp. Users can connect their crypto wallets to Pix, scan a Pix QR code, and have crypto or stablecoins instantly converted into local currency for everyday purchases.

In 2025, Pix processed an estimated $6.7 trillion in transactions, with about 93% of Brazil’s population using the system.

This raises an obvious question: why isn’t Brazil’s central bank more concerned about the dominance of dollar-pegged stablecoins?

Japan: Revival and Reform

In 2025, Japan welcomed its first female prime minister. In December, the Bank of Japan raised rates for the fourth time, pushing the 10-year government bond yield to a 26-year high and making yen carry trades more expensive, tightening global liquidity.

Japan has also been working to reform crypto taxation. Currently, crypto gains can be taxed up to 55% as “miscellaneous income.” In 2025, the ruling coalition proposed a 2026 reform to cut this to a flat 20%, aligning crypto with stock taxation. If passed, it could meaningfully boost domestic activity, though timing remains uncertain.

In August 2025, JPYC Inc. became the first firm licensed by Japan’s FSA to issue a yen-pegged stablecoin. JPYC runs on Ethereum, Polygon, and Avalanche. Circle remains the only foreign issuer permitted to distribute USDC in Japan via SBI VC Trade, a regulated exchange affiliated with SBI. Stablecoins are regulated under the FSA’s framework established by the 2022 amendment to the Payment Services Act.

UAE: Centralizing Oversight

In 2025, the UAE consolidated oversight of major crypto activities, including L1s, DeFi, stablecoin issuers, DEXs, cross-chain bridges, and Web3 platforms, under its central bank (CBUAE). All entities must obtain licenses, with a compliance grace period through September 2026.

Fiat-referenced payment stablecoins are governed by the Payment Token Services Regulations, effective June 2025. Financial free zones such as ADGM and DIFC are excluded. Algorithmic stablecoins are banned, while foreign, non-AED–pegged stablecoins have better prospects within the financial free zones.

In November 2025, the central bank approved the first AED-pegged stablecoin Zand AED, issued by Zand Bank. The infrastructure was developed by Swiss firm Tarus, with payment rails supported by Ripple. Zand AED is multi-chain.

The UAE continues to advance its CBDC e-Dirham. Retail pilots went live in November 2025, while cross-border pilots have run on eBridge since 2024.

Closing Thoughts

The U.S. was far from the only source of excitement in 2025. Other nations either defended aggressively or moved decisively forward. Mainland China stood apart, isolating itself from the global crypto race while doubling down on CBDCs at home and abroad. Russia surprised many by embracing crypto and stablecoins for investment and cross-border use. Central banks played a decisive role.

While some jurisdictions were preoccupied with defending sovereign currencies, Brazil chose pragmatism, accepting the population’s widespread preference for dollar-pegged stablecoins rather than fighting it. Unlike the U.S., these countries continue to invest heavily in CBDCs.

Looking ahead, 2026 promises even more evolution, divergence and competition in the global crypto landscape.

The race is on.

The following video is generated by NotebookLM based on this blog.