Rebuilding payments for Web 3: from crypto rules to regulated rails in Asia-Pacific (Part 1)

APAC's crypto landscape shifts from bans to frameworks. Stablecoins and CBDCs reshape cross-border payments as regulators build, not block, the future.

In a three-part series, Monica Jasuja shares expert insights on how these fast-moving rules will redefine how money moves across the region.

Introduction: why Web 3 payments in APAC now

Asia-Pacific has emerged as the global powerhouse of crypto adoption. In the 2025 Global Adoption Index by Chainalysis India holds the top spot, with Pakistan and Vietnam also in the global top four and the Philippines in the global top ten. This means millions across the region are actively holding and using crypto for everyday financial activities like savings, remittances, and commerce.

Investment is following in a big way. Despite a more cautious global venture capital environment, Southeast Asia alone saw crypto-specific funding surge by an impressive 20% in 2024, hitting USD 325 million. APAC emerged as one of the largest regional destinations for Web 3 venture capital, with Southeast Asia and broader Asia accounting for a significant share of global crypto funding, led by hubs like Singapore and Hong Kong. Despite a more cautious global venture capital environment, Southeast Asia’s crypto‑specific funding grew by about 20% in 2024 to roughly USD 325 million, even as overall fintech funding declined, signalling strong investor confidence in Web 3 infrastructure. These numbers show that investors place real faith in the region's potential to build the next generation of Web 3 payments infrastructure.

Of course, adoption and investment are only half the story. Regulators across APAC are stepping up to turn this enthusiasm into sustainable, scalable payment rails. Hong Kong's licensing framework for stablecoin issuers, which kicked off in August 2025, sets a pioneering example by balancing innovation with oversight, Singapore’s Payment Services Act brings a growing roster of digital‑asset and payment providers into a single supervisory framework, and India’s e‑rupee pilots have expanded to 17 banks, around 6 million users and over INR 1,000 crore in circulation, with work underway on cross‑border and programmable use cases.

All of this adds up to a simple reality: Web 3 payments are beginning to move beyond hype and into day‑to‑day use by banks, PSPs, and merchants in Asia‑Pacific. For banks, payment service providers, merchants, and regulators alike, the key question shifts from whether to engage with crypto to how best to plug into these burgeoning networks with confidence and clarity.

From speculative crypto to Web 3 payment rails

Three years ago, writing about crypto regulation in Asia-Pacific meant cataloguing bans, warnings, and regulatory grey zones.

What we’re now seeing across the region is something different: the deliberate construction of new financial infrastructure. Not tentative pilots. Not wait-and-see. Regulators are laying rails that will shape cross-border payments for decades.

The first wave of crypto in APAC was dominated by trading and speculation, with exchanges at the centre and most activity focused on price swings rather than day‑to‑day payments. That picture is starting to change as new instruments and more practical use cases come into focus.

Enter stablecoins, tokenised deposits, and CBDCs. Unlike Bitcoin’s volatility, these instruments are designed for stability, whether through fiat reserves, commercial bank backing, or direct central bank issuance. That stability matters because it turns tokens into credible settlement media: a merchant, bank, or cross‑border trader can plan around value that is unlikely to swing wildly overnight.

The numbers back this shift. Analysts estimate that stablecoin transaction volumes reached roughly USD 950 billion in July 2025, around 120% higher than a year earlier, with a growing share linked to payments rather than pure trading. While trading still accounts for much of the volume, use in real‑economy flows, the share of ‘real’ payment use cases tripled between February 2023 and February 2025, primarily driven by business-to-business (B2B) transactions.

Web 3 payment rails differ from traditional crypto primarily in programmability, speed, and reduced friction. Cross‑border B2B transfers that often took several days and could cost up to 5–7% of transaction value on legacy correspondent banking rails can, in many corridors, be executed in seconds at low single‑digit all‑in costs when routed over tokenised cash or stablecoins. McKinsey estimates that moving just 1% of nostro/vostro balances into tokenised cash could unlock around USD 100 billion of liquidity, and shifting 1% of cross‑border payments to such instruments could save about USD 23 billion a year in fees. Institutional uptake is no longer hypothetical. According to Fireblocks’ ‘State of Stablecoins 2025’ report, 49% of organisations worldwide already use stablecoins for payments, and a further 41% are in testing or planning phases. The report highlights APAC as one of the most advanced regions, with high adoption and infrastructure readiness and market expansion as the main drivers in Asia. Many of these firms point to cross‑border expansion and liquidity management as primary reasons for integrating stablecoins, treating them as strategic infrastructure rather than side experiments.

Programmable money is the other big differentiator. Web 3 rails can support contracts that embed compliance checks into the payment itself, loyalty, or rewards tokens that trigger benefits automatically, streamed payments that accrue in real time, and collateralised settlement structures that reduce counterparty risk. Conventional card and messaging networks offer only limited programmability by comparison, and much less transparency over end‑to‑end flows.

The transition is not plug‑and‑play. Institutions need wallets, APIs, risk and compliance tooling, and the right partnerships. Survey work suggests that in APAC, a clear majority of respondents already report having ecosystem partnerships in place and say their internal infrastructure is ready or nearly ready for stablecoin integration, putting the region in a strong position to scale real‑world Web 3 payment use.

On the ground, this shows up in very tangible ways. Platforms serving Filipino freelancers and overseas workers, for example, now let them receive stablecoin payouts and convert into pesos in local e‑wallets within minutes, often cutting effective costs from mid‑single‑digit percentages to around 1% or less. In parallel, multi‑CBDC experiments like mBridge have already processed real‑value cross‑border commercial and trade finance transactions between banks in Hong Kong, Thailand, the UAE, and China in seconds rather than days, illustrating how regional B2B commerce could ultimately move to near‑real‑time digital settlement.

For banks, PSPs, and merchants operating across the region, this creates a strategic puzzle. The regulatory patchwork demands market-by-market navigation. Crypto and tokenised assets are being pulled into the formal financial system. The only question is who writes the rules.

From bans to frameworks: APAC's Regulatory Evolution

The arc from 2017 to 2025 is a story of hard lessons. China’s sweeping 2021 move to criminalise most crypto trading and clamp down on mining used a near‑total prohibition to keep monetary control, and capital flows firmly onshore. It met Beijing’s policy objectives at home, but elsewhere the takeaway was different. Blanket bans tend to push activity offshore or underground, beyond supervisory reach.

Singapore’s path illustrates that adjustment. MAS went from championing fintech sandboxes in 2016 to rolling out the Payment Services Act in 2020, pulling crypto intermediaries into a licensing and supervision net. When high‑profile failures like Terraform Labs and Three Arrows Capital—both with Singapore links—blew up, MAS tightened the screws. Crypto ATMs were shut, retail‑facing advertising was curbed, and in August 2023 MAS finalised one of the first bespoke stablecoin frameworks for single‑currency tokens pegged to SGD or G10 currencies, with 100% reserve backing and strict redemption rules. The subtext was clear: you can build here, but only on MAS’ terms.

Hong Kong chose a different route to a similar destination: lead with clarity and openness, then regulate hard. Its virtual asset trading platform (VASP) regime took effect in June 2023, making SFC licensing mandatory for centralised platforms serving Hong Kong investors. By early 2025, nine platforms had secured licences. On top of that, Hong Kong passed its Stablecoin Issuer Ordinance in 2025, putting HKMA in charge of licensing fiat‑referenced stablecoin issuers from 1 August 2025, with requirements including at least HKD 25 million in paid‑up capital and fully backed reserves. It is not softer than Singapore; it is simply more explicit about wanting that business.

Australia has been slower off the blocks but is now trying to close the gap. In 2025, the Treasury released draft legislation to bring digital asset and tokenised custody platforms, as well as payment stablecoins, into the Australian Financial Services Licence and payments framework, with ASIC and APRA expected to oversee different parts of the stack. Exchanges, custodians, and stablecoin issuers will need AFSL‑style permissions and will get a defined transition period once the law is finalised.

The pattern across these markets is consistent. Once crypto and stablecoin rails start to plug into real financial infrastructure, regulators respond. Their response goes beyond bans to increasingly detailed frameworks aimed at managing risk without ceding competitiveness.

The stablecoin pivot

If you want to see where crypto policy is really being contested in 2025, follow the stablecoin debates.

Stablecoins sit at the crossroads of three things every Asian central bank cares about: payments efficiency, monetary sovereignty, and the global role of the US dollar. That combination is combustible. Global stablecoin market capitalisation passed around USD 200 billion by late 2024 and has continued climbing, with USDT and USDC still dominating. For emerging markets, these tokens have already become de facto rails for remittances and cross‑border liquidity.

Take India. It receives roughly USD 125 billion a year in remittances, about 14% of global flows. In some corridors where traditional methods can cost 5–7% of the principal, stablecoin‑based routes that land funds in local wallets at around 1% all‑in offer a different cost structure altogether. At the same time, Standard Chartered estimates that more than USD 1 trillion could migrate out of emerging‑market bank deposits into dollar‑pegged stablecoins by 2028 if adoption accelerates, a prospect that understandably focuses central bankers’ minds.

Singapore and Hong Kong have both opted to pull stablecoins inside the perimeter rather than keep pushing them away. India is taking a more defensive stance. The RBI has repeatedly flagged private stablecoins as a threat to monetary and financial stability and has signalled little appetite to license them in the near term.

For payment operators, this divergence is an operational reality. Which stablecoins are actually licensed in Singapore or Hong Kong? Which tokens are effectively off‑limits in India? Which reserve models and disclosure regimes will satisfy supervisors in each hub? Answering those questions—and wiring products accordingly—is quickly becoming a basic competency rather than a specialist niche.

 

In the next installment, Part 2, we’ll break down the market-by-market realities shaping Web3 in APAC, a landscape where each jurisdiction draws its own lines on licencing, stablecoins, and digital asset risk.

Stay tuned!

About Monica Jasuja

 

Monica Jasuja is Chief Expansion and Innovation Officer at the Emerging Payments Association Asia (EPAA), leading industry working groups on cross-border payments and tokenised money. She represents EPAA on the BIS PIE Task Force. Ranked among the top 3 global payment leaders and top 10 fintech voices worldwide, Monica brings 24+ years of experience across PayPal, Mastercard, and Gojek.

 

About Emerging Payments Association Asia (EPAA)

 

Emerging Payments Association Asia (EPAA) is the region's leading independent voice for the payments industry, convening banks, fintechs, regulators, and technology providers to shape the future of payments across Asia-Pacific. Through working groups, research, and advocacy, EPAA bridges the gap between policy and practice in an era of rapid digital transformation.