HONG KONG -- Circle, the U.S. issuer of the world's second-largest stablecoin, is urging Asian jurisdictions to make space for competition, with chief strategy officer Dante Disparte arguing that experience in the American and European markets shows the sector can accommodate big banks as well as startups.

Major financial hubs in the region have raced to harness the rise of digital tokens pegged to fiat currencies by establishing their own regulatory regimes. But adoption and use cases have proved limited so far, especially when it comes to local currency stablecoins.

In Hong Kong, where regulators awarded the first licenses this April to entities backed by the city's two largest banks -- HSBC and a joint venture backed by Standard Chartered -- critics have questioned whether there will be room for newcomers.

"Obviously, some jurisdictions are trying to protect the incumbent industry, hence the idea of protecting the banks," Disparte told Nikkei Asia in Bangkok on the sidelines of the International Monetary Fund and World Bank Annual Meetings earlier this month.

"But my broad message is what makes stablecoins and digital assets very unique is that it is an entrepreneurial economy, and it is one that supports ... the development of an ecosystem." Dante Disparte, chief strategy officer at circle, meets with Nikkei Asia in Bangkok on the sidelines of the International Monetary Fund and World Bank Annual Meetings.

Disparte said he believes that in stablecoin regulation, "Hong Kong's model has been bank first ... but not bank only." Circle's co-founder and CEO Jeremy Allaire previously suggested that the company was eyeing regulatory approval for a stablecoin license in the city.

Circle, which is behind the dollar-denominated stablecoin USDC, recently accelerated its Asia expansion with Singapore as its regional headquarters. It announced plans in September to acquire Singapore-based cross-border B2B payment firm Tazapay for $400 million, with the deal expected to close in 2027. In the same month, it also received a $100 million investment from Binance and signed a five-year agreement with the company to focus on expanding USDC access across emerging markets.

As of the end of June, around $73.3 billion worth of USDC were in circulation globally, representing year-on-year growth of 19%, Circle disclosed in its latest quarterly report. Its share of the stablecoin market stood at around 27%, according to the company.

Unlike rival Tether, which built an empire around cryptocurrency trading and adoption through digital asset exchanges, the NYSE-listed Circle has sought partnerships with established institutions and payment companies that integrate them into a blockchain ecosystem. The company has recently signed agreements with South Korean fintech Kakao Group and Japanese securities firm Nomura on digital finance and USDC-based payment. Implementation is expected to take place as early as next year.

"One of the first choices we made was to find regulatory hubs in all of the regions of the world," Disparte explained. "From those hubs, we would continue expanding to different geographies." He added the firm wants its stablecoins "available everywhere, but regulated in a few high-quality places." "This is the question in Hong Kong, Singapore, Japan, South Korea and many other countries: What is your rulebook for this innovation? How will it promote growth and inward investment? And how will it also promote a level playing field competitor?" Disparte said.

He also argued that stablecoin regulations in Asia should seek "more harmonization of rules" across borders. While Hong Kong, Singapore, Japan and South Korea develop separate rulebooks, he said regulators need to align with each other if digital currencies are to function seamlessly and connect with global standards like the U.S. Genius Act, which set the framework for issuing dollar-backed coins.

Looking at the U.S., Disparte said he is optimistic. "The Genius Act has now created a revival of banking with more than 40 companies, international, domestic, bank and nonbank, all seeking licenses" for stablecoins as well as broader payment activities.

When asked about opportunities for Circle in China, Disparte said he sees "a very big case for convergence" between stablecoins like USDC and central bank digital currencies "You're going to need landing points for which there's interoperability of existing stablecoins, future public digital money initiatives, and initiatives that might be coming from the banking system itself." Disparte added that he is very "encouraged" by new initiatives from China to establish a national blockchain network. In a slew of measures rolled out earlier this month, Beijing called for this as part of its strategy to connect the real economy with the digital economy and digitize its manufacturing sector.