Standard Chartered argues stablecoin controls should follow use case, not technology
Key points
- Standard Chartered's Minli Ng argues the industry should replace technology-centric stablecoin controls with Use-Based Compliance, where the customer's economic objective determines the risk framework applied.
- Ng distinguishes at least five stablecoin use cases, including cross-border B2B payments, treasury liquidity movement, tokenised asset settlement, investment and trading, and broader digital asset market participation, each carrying different monitoring and governance requirements.
- Leading regulatory frameworks from FATF, MAS, HKMA, and the PRA are cited as increasingly combining risk-based financial crime controls with expectations specific to stablecoin issuance and operation.
- A corporate settling a commodity purchase with an emerging-market supplier is contrasted directly with a customer moving funds between exchanges, illustrating how identical technology can carry divergent compliance obligations.
- The piece signals that financial institutions willing to align controls to use case could convert stablecoin adoption into new custody, payment, and settlement propositions and strengthen their position as value migrates across traditional and on-chain networks.
Standard Chartered‘s Minli Ng has published a framework arguing that institutional stablecoin compliance is being designed backwards: the industry is building controls around the technology rather than the economic purpose driving each transaction. The core proposition, which Ng labels Use-Based Compliance, holds that a corporate settling a commodity purchase across borders carries a fundamentally different risk profile from a customer cycling funds between exchanges, even if both transactions use identical stablecoin infrastructure.
Ng identifies the central tension as stablecoins straddling two worlds simultaneously: they are positioned as digital cash and payment instruments, yet a meaningful share of current activity still resembles asset-trading behaviour. That split matters for compliance design because treasury liquidity movements, cross-border business-to-business settlements, tokenised asset settlement, and investment activity each generate distinct monitoring scenarios, screening thresholds, and governance requirements. Applying a uniform surveillance framework across all of them conflates risk contexts that regulators, including the Financial Action Task Force, the Monetary Authority of Singapore, the Hong Kong Monetary Authority, and the Prudential Regulation Authority, already treat as meaningfully different.
The practical implication for financial institutions is that the first design question should be the customer objective, not the transaction type. Ng frames the principle as a sequence: use informs risk, and risk informs controls. Where operating models and corridor economics support the approach, she argues financial institutions stand to gain new payment, liquidity, custody, and settlement propositions alongside deeper client relationships, while customers gain faster fund availability, extended-hour settlement, and more flexible cross-border liquidity through an institutional relationship they already trust.