Author
Mr MENG KENING
Organisation/Institution
The University of Tokyo, Graduate Schools for Law and Politics
Country
JAPAN
Panel
Banking and Finance
Title
Toward a Unified Regulatory Framework for Stablecoin Reserve asset
Abstract
The disruptive emergence of stablecoins (SCs) has attracted considerable attention in recent years, particularly following the publication of the Libra (now Diem) Whitepaper. Stablecoins aim to provide the benefits of cryptocurrencies while maintaining a stable value, which relies heavily on the composition and management of their reserve assets. Reserve assets play a critical role in ensuring the stability and trustworthiness of stablecoins, serving as a financial backbone that allows issuers to redeem tokens on demand. Despite their importance, there remain ongoing questions regarding how these reserve assets should be structured, including which types of assets are appropriate, how they are diversified, and how risks are managed. In this article, the author examines the most recent legislation and regulatory revisions concerning reserve asset requirements in Japan, Hong Kong, and Singapore. Across these jurisdictions, regulations generally converge on recognizing cash, deposits, and Treasury bills as suitable reserve assets. To assess the reasonableness of this regulatory approach, the article compares the strengths and weaknesses of four models for structuring reserve assets: the Bank Model, the Deposit-of-Banks (DB) Model, the High-Quality Liquid Assets (HQLA) Model, and the Central Bank Liability (CBL) Model. This analysis also discusses about the potential use of foreign-currency-denominated assets and crypto-assets, highlighting the extra risks such as volatility, and chain of backing. Additionally, the article places the analysis in a broader international context by considering the regulatory frameworks of the European Union, the United Kingdom, and the United States. By examining both Asian and Western regulatory approaches, this study aims to provide a comparative perspective on best practices for reserve asset management while balancing innovation and risk mitigation.
Biography
MENG KENING is a doctoral candidate at the Graduate Schools for Law and Politics, Faculty of Law, The University of Tokyo, meanwhile adopted as a JSPS (Japan Society for the Promotion of Science) Research Fellow (DC2). He obtained Bachelor Degree of Law in China University of Political Science and Law in 2020 and Master Degree of Law in The University of Tokyo in 2023. He is Mainly involved in research on cryptocurrencies. Relevant previous work comprises “Regulating Stablecoins: Lessons from Japan” presented at CAL 2025 (Università degli Studi di Milano-Bicocca), and “Ensuring Stablecoin Redemption in the EU: Focusing on Reserve Assets” presented at the EU Law Research at Hitotsubashi University. Other researching experiences including internship in TMI Associates (Singapore) LLP office, case studies on issues in Company Act and the Financial Instruments and Exchange Act, and research on insurance cases. Now he concentrates on issues such as the scope of stablecoin issuers, the permissibility of crypto asset-type stablecoins, etc. At the same time, he is also researching in other payment methods, including CBDC, crypto assets, prepaid payment instruments, and other digital money. He holds the legal professional qualification of China and speaks Chinese, Japanese, English and Spanish.
