Vanessa Yi Ting Cheok

Stablecoins have increasingly been heralded as the up and coming "currency" of the modern era. However, financial lingo and the colloquial conception of stablecoins must not cloud legal analysis. Money, in legal terms, is not an amorphous representation of value but a complex constellation of rights between different stakeholders: individuals, banks, intermediaries and transacting parties. For stablecoins, a form of "private", non-government backed currency, it is even more imperative that the law provides a precisely conceptualised and comprehensive framework of private law rights to ensur confidence and enforceability. As with traditional monies, these rights must operate within a regulatory environment designed to safeguard currency reliability and market integrity. The need for regulation is magnified in relation to the stablecoin market, given cryptocurrency's origin as network-driven environment underpinned by game-theory dynamics, fast-acting participants with speculative tendencies and a "trust free" governance model that eschews centralised control. Enforcement in such ecosystems cannot be achieved through piecemeal interventions based on existing criminal, property and contract law alone. New legislation in the form of the US' GENIUS Act and Hong Kong's Stablecoins Ordinance represent landmark efforts to establish comprehensive, issuer- centric regulatory frameworks. The focus of this article is on bridging the gap between those regulatory duties and private claims by stablecoin holders. It analyses how these two bodies of law - public regulations and private rights - working in tandem can achieve investor protection, market integrity and stability, which is the aim of both Acts.

This Part 1 focuses on the stablecoin holder's contractual right to redeem.