Where to issue your stablecoin: jurisdiction tips for founders

Introduction

Stablecoin founders face a simple but decisive question: where should I issue my stablecoin?

For founders, choosing the right jurisdiction to issue a stablecoin is as critical as the technology stack itself. The wrong choice can be expensive, very slow to provide licensing authorisation, hamper your banking access, or limit which markets you can sell into. The right choice can give your project credibility, speed to market, and investor confidence.

In this guide, we compare the best places to set up a stablecoin issuer, looking at offshore hubs like BVI, Bermuda, and Cayman Islands, major regulatory centres like the U.S. and EU (MiCA), and Asian gateways like Singapore and Hong Kong. We also explore where to issue USD stablecoins, differences between different types of stablecoins, and which jurisdictions are best aligned with high-growth user markets in Africa and Southeast Asia.

Why are we doing this? People outside our industry - muggles, if you will -  will sometimes ask us, in tones of great scepticism, “but what is blockchain actually used for?” The question tends to betray the geography of the questioner; just like the cast of Harry Potter, blockchain muggles are rather Eurocentric. Among the most basic answer to this question is this: stablecoins. Away from Europe, stablecoins are seeing explosive growth, and represent by far and away the largest and most established mass use-case for blockchain technology. Stablecoins enable rapid & cheap international & domestic payments, and facilitate easy on and off-ramping into crypto. Their use is particularly high in emerging markets, where they act as an important hedge against currency inflation; at the same time, they also provide greater financial access to the unbanked. 

For the benefit of the uninitiated (and, indeed, muggles): stablecoins are blockchain-based tokens designed to maintain a stable value. There are three main types of stablecoin: 

1. Fiat-backed stablecoins: Backed by bank deposits, government securities, or other cash equivalents. Examples: USDC, USDT. Fiat backed stablecoins make up about 87% of the total circulating supply.
2. Crypto-collateralised stablecoins: Backed by volatile crypto assets (like ETH), often requiring over-collateralisation. Example: DAI. These make up just under 13% of supply.
3. Algorithmic stablecoins: Attempt to stabilise through algorithmic supply adjustments – largely disfavoured by regulators due to collapses like Terra/Luna. These constitute only about 0.2% of total supply.

For space, time, and clarity, this blog post will mainly focus on type 1 (fiat backed stablecoins), while making some comments on type 2 (crypto-collateralised stablecoins). 

The stablecoin opportunity

As crypto adoption continues to spread, there are large opportunities for web3 entrepreneurs seeking to develop and deploy new stablecoin solutions. To do so, however, they must reckon with the spread of global stablecoin regulation, deepening political sensitivities around the effect of stablecoins on local banking and monetary systems, and how both of these structure the ‘art of the possible’.

Launching a stablecoin today is therefore as much a legal and regulatory strategy as it is a technical one. Founders must balance two dimensions:

1. Where to issue: the jurisdiction in which the token is legally incorporated and licensed.
2. Where to use/sell: the markets where they hope the token will gain traction among users.

These are not always the same. Although EU regulators require all stablecoins sold in the EU to be issued and licensed by an EU entity, the stablecoin scene more generally sees a split between the jurisdiction of issuance and the jurisdiction of sales/ use. Offshore jurisdictions (like Bermuda or the BVI) can be excellent places to issue, but they are not end-user markets. Conversely, regions like Africa or Southeast Asia present immense user demand but lack mature issuance frameworks. The US is a mix of both - its a large market, increasingly crypto friendly, and a good place both to issue tokens and sell foreign-issued tokens. 

Top jurisdiction criteria for founders

For founders, the choice of jurisdiction can determine the credibility, scalability, and longevity of their project. In this article, we compare key jurisdictions across six criteria:

1. Reserve Composition Rules: What reserves are permitted? Fiat only, or also real-world assets (RWAs)? Must reserves be held 1:1?
2. Licensing & Incorporation: Is licensing mandatory to issue or distribute tokens? What kinds of requirements does licensing impose?
3. Cost: How expensive is it to incorporate, acquire a license, and maintain compliance? Some jurisdictions will have higher licensing costs and staffing costs than others.
4. Speed: How quickly can an entity be licensed and become operational?
5. Geography & Market Alignment: Is the jurisdiction close to your target market? How and through whom do you intend to distribute the tokens? If you plan for your project to distribute the tokens, this may create additional regulatory requirements
6. Yield: Does the jurisdiction allow yield bearing stablecoins? These are potentially very attractive products, yet many jurisdictions do not allow them.

The dominance of the dollar

A further point to note is the dominance of the dollar. Approximately 99% of stablecoins are dollar-denominated, and the majority of stablecoin transactions are conducted in these USD backed stablecoins. Other currencies do not yet compete. It is estimated for instance that there are approximately $240 billion of stablecoins in circulation, but as of June 2025, EU denominated stablecoin have a market capitalization of less than $350 billion. Most stablecoin issuers will therefore be thinking in dollar terms, and will need to consider how this impact their strategy.

Offshore Issuance Jurisdictions: Bermuda, BVI, Cayman Islands

Possessed of minuscule populations but deep reserves of financial and legal talent, these jurisdictions are attractive for issuance rather than as markets of stablecoin users. They offer flexibility, neutrality, and international credibility, and focus on creating stablecoin products that can be used elsewhere. 

Bermuda

British Overseas Territory with strong financial service background and particular focus on the insurance industry. Stablecoin issuance is regulated under the Digital Asset Business Act (DABA) and Digital Asset Issuance Act 2020 (DAIA).

1. Reserves: Recent guidance states that reserves must be high-quality and liquid (typically fiat + Treasuries). The value of the backing assets must be at least 1:1 with the token
2. Licensing: Mandatory for anyone seeking to issue a stablecoin in Bermuda. Issuers must obtain a Digital Asset Business license from the Bermuda Monetary Authority (BMA).
3. Cost: Medium-high. Legal and compliance costs are higher than BVI but significantly lower than the U.S. or EU.
4. Speed: Moderate (3–6 months for approval).
5. Geography: Neutral. Not a direct user market, but Bermuda is well regarded by major institutional partners.
6. Are yield bearing stablecoins allowed? Yes. Unlike the USA and EU, Bermuda will allows yield based stablecoins - offering it a significant competitive advantage.

How to issue a Bermuda based stablecoin: Before you set anything up, ensure you have the correct local partners to help you get a license. As well as setting up Bermudan SPVs for your project, DAO SPV can facilitate introductions to local legal experts with whom to undertake the licensing process. 

BVI (British Virgin Islands)

British Overseas Territory, specialised in financial services and with a particular tradfi focus on offshore company and trust formation. In web3 it is the world’s leading hub for utility token issuance, and a well-regarded centre for security token and stablecoins. 

1. Reserves: Very flexible. The BVI VASP Act does not prescribe reserve composition in detail, leaving discretion to the issuer. No explicit 1:1 requirement.
2. Licensing: Virtual Asset Service Provider (VASP) license may be required, but some issuance models may fall outside scope. Crucially, the mere act of issuing a stablecoin is not a licensable act in the BVI - the VASP Act does not make the issuance of stablecoins a regulated activity in and of itself. Instead, the Act regulates virtual asset services. This means that, if conducted by a BVI company, other activities such as oversight of a treasury backing the stablecoin, transfer, exchange, or custody of stablecoins may require registration/licensing under the BVI VASP Act. These could be provided by a 3rd party, either in the BVI or elsewhere. 
   1. Securities regulation: The BVI Securities and Investment Business Act may or may not apply. It is likely that a fiat-backed or algorithmic stablecoin is not an “investment” under BVI SIBA and, if so, no BVI SIBA license would be required in order to deal in/arrange deals in/manage/advise on the stablecoin.
3. Cost & tax: Low. BVI remains one of the cheapest and easiest places to incorporate. As a tax neutral jurisdiction, it also lacks the tax burden that may apply in other jurisdictions. As BVI stablecoin issuance falls outside of the scope of the BVI Economic Subsistence Act, BVI-based issuers also will not need to have local resident directors or premises. This further reduces costs.
4. Speed: Fast (weeks to a few months).
5. Geography: Neutral. Pure issuance hub with little consumer market.
6. Are yield bearing stablecoins allowed? Yes - but this would be very likely to trigger the need to get a local SIBA license

How to issue a BVI based stablecoin: Before you set anything up, it is worth working with a lawyer to understand if you need a VASP or SIBA license at all. If you do, ensure you have the correct local partners to help you get a license. BVI may not regulate the issuance of stablecoins and utility tokens, but it certainly will regulate stablecoin projects if they are providing VASP services, or if the stablecoin appears to be a security  As well as setting up BVI SPVs for your project, DAO SPV can facilitate introductions to local legal experts with whom to do a legal review and undertake the licensing process. 

Panama

Central American state famous for shipping, offshore companies, and hats. In recent years it has become a major centre for the blockchain industry. It does not possess a VASP regime or any blockchain specific laws, making it an attractive destination for many projects. As a result, a specialised professional services industry has developed in order to serve these clients

1. Reserves: No reserve requirements specified
2. Licensing: As Panama has neither a VASP regime nor specific stablecoin rules, it imposes no licensing requirements on stablecoin issuers
3. Cost: Low - limited to the cost of local entity setup
4. Speed: Under a month
5. Geography: Suitable for global use
6. Are yield bearing stablecoins allowed? Yes

How and why to issue a Panama based stablecoin: 

• Setting up your entity and getting legal advice: It is always worthwhile getting some local legal advice before you set up your entity. A small outlay of up-front legal costs can prevent much larger expenditure in due course. 
• A great place to develop an test your product:  Panama is an excellent location to issue and test a stablecoin while initiating the slow-moving licensing processes that a project may need in other jurisdictions . It is a rapid, low cost way to test the business case of stablecoin project, and this plays a useful role in the wider strategy of many stablecoin entrepreneurs.

Cayman Islands

Another finance-focused British Overseas Territory, and a leading jurisdiction for the global funds industry. In recent years it has also become the leading jurisdiction for DAO and protocol wrappers. 

1. Reserves: Flexible. The VASP regime allows innovative reserve models subject to regulator approval.
2. Licensing: Cayman VASP licensing is required for any virtual asset services that the stablecoin entity may wish to provide; unlike in the BVI, this also includes the issuance of the stablecoin tokens themselves. 
   1. Securities regulation:  The Cayman Securities & Investment Business Act (SIBA) may or may not apply. Any stablecoin merely pegged to fiat currency would not be expected to constitute a security and would therefore be treated the same as other virtual assets (and therefore solely regulated under the VASP Regime). Conversely, and stablecoin pegged to the value of a security will likely fall under SIBA
3. Cost: Medium. Professional fees and licensing fees will likely be higher than in the BVI; however, like the BVI the jurisdiction also benefits from tax neutrality.
4. Speed: Moderate (3–6 months).
5. Geography: Similar to BVI: offshore issuance, not a user base. Like Bermuda, it has a strong brand with institutional investors and partners. 
6. Are yield bearing stablecoins allowed? No. Some workarounds are available in terms of structuring as a reward program, but these are high ris

How to issue a Cayman based stablecoin:

• Before you set anything up, it is worth working with a lawyer to understand if you need a VASP or SIBA license. If you do, ensure you have the correct local partners to help you get a license.  As well as setting up Cayman SPVs for your project, DAO SPV can facilitate introductions to local legal experts with whom to undertake the licensing process. 
• However - Cayman is better for stablecoin holding structures, not stablecoin issuance: While the Cayman Islands is well-advertised online as a jurisdiction for stablecoin issuance, conversations with local practitioners indicates that comparatively few stablecoins are actually issued here. Instead, Cayman plays a role in the wider structuring of stablecoin projects through the use of Cayman foundations as overall holding entities for the projet

Offshore stablecoin issuance: founder takeaway

Offshore hubs are best for fast issuance and flexible structures. Bermuda offers credibility, BVI offers speed and low cost, and Cayman provides a balance.

Onshore and Mid-shore licensing

United States

The U.S. is both a major issuance hub and a key market for stablecoins, particularly USD-pegged tokens. Given the overwhelming current dominance of USD-backed stablecoins, US regulations are globally relevant. The recent GENIUS Act has clarified and simplified rules on payment stablecoins, i.e. those used for payment and convertible to a fixed amount of monetary value. Non-payment stablecoins remain subject to pre-GENIUS Act digital asset rules.

1. Reserves: The GENIUS Act requires 1:1 fiat reserves in cash or high-quality liquid assets. No hybrid or RWA models permitted for payment stablecoins.
2. Licensing: Mandatory, and may apply at either state or federal level. Only ‘permitted payment issuers’ may issue payment stablecoins; these are banks are qualified non-bank entities. If a payment stablecoin issuer has an issuance over $10 billion, the issuer must be federally regulated unless granted a waiver. State-qualified issuers with less than $10 billion in outstanding stablecoins may opt for state-level regulation if the SCRC certifies that the applicable state regime is substantially similar to federal framework. 
   1. Other regulation: Under GENIUS, payment stablecoins are not considered securities. However, various other regulations may apply.
3. Cost: Very high. Legal, compliance, and ongoing audits can run into millions annually.
4. Speed: Slow. Full regulatory approval may take 12–24 months.
5. Geography: Critical if your target market is the U.S. consumer base or if you want access to the USD financial system.
   1. Territorial scope:  Importantly, foreign issuers that issue or offer payment stablecoins to US residents or operate in the USA are subject to the Act. Issuers that don’t do these things are not.
6. Are yield bearing stablecoins allowed? No Genius-act regulated payment tokens may be yield bearing.

How to issue a US based stablecoin: With the GENIUS Act still fresh, and non-payment stablecoins still subject to pre-GENIUS rules, projects seeking to launch a US based stablecoin (and, indeed, to offer stablecoins in the USA), should seek legal advice. DAO SPV would be happy to facilitate an introduction.

Founder takeaway: The U.S. is the best place to issue a USD-pegged stablecoin if credibility and adoption in the American market are priorities. It is unsuitable for experimental or hybrid reserve models.

European Union (MiCA)

The EU’s Markets in Crypto-Assets Regulation (MiCA), is one of the world’s most detailed stablecoin frameworks. All stablecoin tokens sold in the EU must be issued by an EU licensed and EU incorporated entity. 

1. Reserves:  MiCA outlines two categories of token, and with them the kind of reserves:
   1. E-Money Tokens (EMTs):  These refer to tokens backed by a single currency. 1:1 fiat backing. At least 30% of the received funds must be held in segregated accounts open with a regulated EU credit institution (i.e., bank deposits) and the remaining funds can be placed in low-risk, highly liquid financial instruments denominated in the same currency as the one referenced by the emoney token
   2. Asset-Referenced Tokens (ARTs): May reference baskets of currencies or commodities, but must be fully collateralised with high-quality liquid reserves.
2. Licensing: Mandatory. Issuers must be authorised and supervised by national regulators.
3. Cost: Medium-high. Requires significant capital and EU presence.
4. Speed: Medium (6–12 months).
5. Geography: Necessary for European users and provides strong credibility with global institutional partners.
   1. Territorial scope: Importantly, all stablecoins offered to EU residents must be issued in the EU, from an EU incorporated entity. 
6. Are yield bearing stablecoins allowed? No

Founder takeaway: The EU is a good jurisdiction for hybrid models (fiat + RWAs) and multi-currency stablecoins. Either way, whether your stablecoin is fiat or crypto based, licensing is a must in order to offer tokens to EU citizens. 

Singapore

Singapore regulates stablecoins under two regimes. Single-currency stablecoins are regulated under the MAS regulatory framework. This framework applies to any single-currency stablecoin backed by the Singapore dollar or a pegged to another g10 currency, where issued from . Singapore. Stablecoins pegged to other assets, or issued outside of Singapore, are subject to Digital Payment Token rules. Below, we consider single-currency stablecoins:

• Reserves: Must be at least 1:1 fiat backed. Eligible currencies are SGD, USD, or other G10. Reserves must be held in low-risk assets
• Licensing: All MAS Regulated stablecoins with circulation exceeding S$5 million will require a Major Payments Institution license: all those underneath this threshold will not be regulated. Covers any issuer issuing a Singapore dollar backed single-currency stablecoin, or one pegged to any G10 current where issued solely out of Singapore
• Cost: High. Compliance and capital requirements are strict.
• Speed: Moderate (6–9 months).
• Geography: Excellent hub for Asia-Pacific markets. Strong banking links and institutional credibility.

Founder takeaway: Singapore is ideal for founders targeting Asia-Pacific with USD- or SGD-pegged stablecoins. Its value as an offshore operations hub for stablecoin issuance has however shifted - the jurisdiction has recently tightened rules on any Singapore-based providers who offer digital payment tokens or digital capital market products  solely to overseas customers. Any such provider must now get a Singapore DTSP license.

Hong Kong

Hong Kong launched its Stablecoin Ordinance in 2025, creating a clear licensing regime.

• Reserves: Must be 1:1 fiat backed. Algorithmic and RWA reserves are prohibited.  Reserve assets of HKD-referenced stablecoins can be denominated in USD
• Licensing: Mandatory under the Stablecoin Ordinance.
• Cost: High but comparable to Singapore.
• Speed: Medium. Regime is new, so timelines vary.
• Geography: Strategic gateway to China and Asia. Attractive for institutional-grade projects.

• Territorial scope: Applies to any stablecoin issues in Hong Kong, and to all global stablecoins that purport to maintain a value with reference to Hong Kong dollars
• Are yield bearing stablecoins allowed? No

Founder takeaway: Hong Kong is best for Asia-focused projects that need regulatory credibility and proximity to Chinese markets.

User markets

African Markets (Use Markets, Not Issuance Hubs)

Africa is a demand hotspot for stablecoins. Stablecoins are used as a hedge against local inflation, as a way of slashing high international money remittance fees, and to provide financial access to the unbanked. Overall, sub-Saharan Africa has the world’s highest stablecoin adoption rate, 9.3%. However, and uncertain, varied, and rapidly evolving regulatory scene across the continent currently means that African markets are not major centres for stablecoin issuance.

Founders targeting African users should issue elsewhere and distribute locally.

• Reserves: Determined by the issuance jurisdiction.
• Licensing: Most countries have no dedicated stablecoin rules. Nigeria has banned certain crypto activities; South Africa is building a regulatory framework.
• Cost: Low barriers to entry for distribution.
• Speed: Fast adoption driven by inflation and remittances.
• Geography: Huge demand for USD stablecoins, particularly in Nigeria, Kenya, and South Africa.

Founder takeaway: For Africa, the strategy is to issue offshore (Bermuda, BVI, EU, or U.S.) and distribute into local markets.

Broader Asia (Outside Singapore & Hong Kong)

Beyond Singapore and Hong Kong, most Asian jurisdictions are user markets, not issuance hubs.

• Japan: Permits stablecoins under banking regulations, requiring domestic trust banks.
• South Korea: Restrictive, with regulators cautious after Terra’s collapse.
• SEA (Indonesia, Philippines, Vietnam): Strong demand, but regulations remain underdeveloped.
• Reserves: Determined by issuing jurisdiction.
• Licensing: Often unclear; distribution typically falls into regulatory grey zones.
• Cost: Market entry costs vary, mostly operational.
• Speed: Adoption is fast in remittances and retail trading.
• Geography: Excellent growth markets, especially for USD-pegged coins.

Founder takeaway: Issue in Singapore/HK and sell into Southeast Asia. These markets are demand-rich but not regulatory anchors.

Strategic Considerations Beyond Jurisdiction

Choosing the right jurisdiction is critical, but founders should also plan around broader strategic issues that will determine success:

1. Banking & Custody Relationships Even in permissive jurisdictions, banking access can be the bottleneck. Credible banking and custody partners are essential to hold fiat or Treasuries safely and build user trust. Founders should bear this in mind as they consider their growth
2. Distribution & On/Off-Ramp Infrastructure Issuance means little without adoption. Partnerships with exchanges, payment providers, fintechs, and other will create the liquidity that makes your stablecoin usable in target markets. Without these partnerships in place, your stablecoin will truggle.
3. Audit & Transparency Requirements Some regulators mandate attestations; others don’t. Regardless, independent audits and transparent reserve disclosures strengthen credibility and adoption.
4. Technology Stack & Compliance Integration Stablecoins must integrate compliance features (AML, transaction monitoring) while remaining user-friendly. Chain choice (Ethereum, Solana, Layer 2s) affects costs and reach.
5. Exit & Contingency Planning Regulatory landscapes shift. Having a plan to re-domicile, restructure, or wind down ensures long-term resilience if laws tighten.

Next step: get in touch!

If you would like to learn more about where to set up your stablecoin, please get in touch on contact @ daospv.com