The dialectical unity of stablecoins and RWA

Author: Mask

At the Gulf Financial Regulation and Asset Digitization Exchange held in Abu Dhabi, financial strategy expert Tian Bangde posed a thought-provoking question to regulators from various countries: "Is the global financial system ready to use a set of financial infrastructure protocols not set by the West?"

Behind this issue is the third path being explored by the UAE through a "dual-track parallel" monetary system—coordinated development of Central Bank Digital Currency (CBDC) and stablecoins. Meanwhile, in the skyscrapers of Central Hong Kong, the passage of the "Stablecoin Regulation" by the Legislative Council heralds the impending licensing system set to be implemented on August 1, opening a new window for digital finance in Asia.

Stablecoins are the "vessels of trade" in the crypto world—serving as a measure of value and medium of payment on the blockchain, their core mission is to address the high volatility issues of native cryptocurrencies. The current mainstream models include fiat-collateralized (such as USDT and USDC) and over-collateralized (such as DAI), while algorithmic stablecoins have been marginalized due to high risks.

RWA (Real World Asset Tokenization) is the "value anchor" of digital finance—transforming physical assets such as real estate, bonds, and commodities into programmable tokens through blockchain, thereby activating the liquidity of traditional non-standard assets.

As we observe the profound transformation of global financial infrastructure, the dialectical unity between stablecoins and real-world assets (RWA) is becoming the core engine of this transformation. According to a joint forecast by BCG and ADDX, by 2030, the RWA market size will reach $16 trillion, accounting for 10% of global GDP, while the trading volume of stablecoins, which serves as the "blood" of the RWA ecosystem, has surpassed $28 trillion, exceeding the total of Visa and Mastercard.

The dialectical unity relationship between the two is reflected in three levels:

1. Complementary Functions

Stablecoins and RWAs are essentially two sides of the same coin—both achieve "on-chain reconstruction" of traditional value through tokenization technology.

Stablecoins, as a "measure of value", map fiat currencies, commodities, and other value anchors into on-chain programmable tokens. Whether it's fiat-collateralized stablecoins like USDT and USDC or commodity-collateralized ones like PAXG, they address the core issue of the price volatility of cryptocurrencies, becoming a bridge connecting the crypto world with traditional finance.

Stablecoins provide on-chain settlement tools for RWA: for example, in cross-border trade, after the tokenization of accounts receivable, payments in stablecoins compress the settlement time from 7 days to minutes, reducing costs by 70%.

RWA acts as an "asset carrier," breaking down non-standard assets such as real estate, bonds, and carbon credits into tradable digital certificates. When Huaxia Fund in Hong Kong launches the real estate TNFT (tokenized real estate certificate), investors can utilize Hong Kong dollar stablecoins for minute-level share trading, avoiding the complex processes of traditional property transfer.

RWA expands the asset backing scenarios for stablecoins: MakerDAO has replaced 37% of its DAI collateral with RWA assets such as U.S. Treasury bonds, enhancing stability while providing on-chain yields.

Together, they build a three-in-one value on-chain pipeline of "asset mapping - trust mechanism - liquidity engine:"

1. Asset Mapping: Creating a digital twin of real-world value through tokens.

2. Trust mechanism: relies on off-chain asset endorsement + on-chain transparent verification (reserve proof, oracle price feeding)

3. Liquidity Engine: Transforming low liquidity assets into on-chain tools that can be traded 24/7.

2. Liquidity Circulation

The dialectical unity of stablecoins and RWAs is reflected in the dynamic relationship of mutual dependence and transformation between the two, forming a self-consistent financial closed loop.

1. Stablecoin: The "infrastructure" for RWA circulation

In the traditional financial system, physical assets such as real estate and commodities are difficult to circulate efficiently due to insufficient liquidity and high transaction costs. RWA uses tokenization technology to convert these assets into on-chain digital certificates, while stablecoins become the natural medium of exchange and unit of account for these certificates.

Cross-border trade scenarios particularly highlight this value. When Chinese companies export photovoltaic equipment to the Middle East, the tokenization of accounts receivable allows for direct payment in stablecoins, significantly shortening payment terms and reducing exchange rate risks. According to a Deutsche Bank research report, the cost of cross-border payments using stablecoins sent via blockchain is only about $0.00025, while the average fee rate for traditional models is as high as 6.35%.

2.RWA: The "value anchor" of stablecoins

Stablecoins have the potential to go beyond the singular role of "transaction intermediaries," and RWA provides diversified paths for value support. Currently, stablecoins are mostly pegged to fiat currencies or government bonds, but innovative models have begun to explore RWA collateral mechanisms.

The algorithmic stablecoin USDR innovatively incorporates real estate into its collateral portfolio: 40% of its reserves are allocated to UK rental income properties, transforming rental cash flows into intrinsic yields for stablecoin holders (approximately 5% annualized). The JD stablecoin testing scenarios cover multidimensional applications such as cross-border payments, investment transactions, and retail payments.

The deep coupling of the two creates a unique liquidity cycle, becoming the flywheel that activates "sleeping capital":

> RWA → Stablecoin → DeFi Yield → More RWA On-Chain

When users mint stablecoins by pledging gold bars and invest these stablecoins into the liquidity pools of DeFi platforms to earn additional returns, a "triple value-added structure" is formed. Users holding tokenized bonds can also pledge assets to borrow stablecoins, obtaining short-term funds without selling the underlying assets. This model is rapidly penetrating DeFi platforms.

Fragmented investment in RWA (such as subscribing for photovoltaic panel shares at $50) relies on stablecoins for small payments; meanwhile, the reserve assets of stablecoins (such as USDC holding $80 billion in U.S. Treasury bonds) themselves form an important part of the RWA ecosystem.

3. Risk Hedging

Although the functionalities are complementary, the risk linkage between stablecoins and RWAs is equally close, forming a transmission chain of systemic vulnerability.

1. Market risk resonance. When the macroeconomic environment deteriorates, the value of RWA underlying assets being impacted will directly affect the credit foundation of related stablecoins. In the early stages of the global COVID-19 pandemic in 2020, some stablecoins backed by bonds experienced increased redemption pressure due to falling bond prices.

2. Credit Risk Cross-Chain Transmission. If the asset custody institution in the RWA project encounters credit issues, such as the bankruptcy of FTX leading to the termination of its tokenized stock business, not only will RWA investors suffer losses, but related stablecoin trading will also be affected, triggering a liquidity crisis.

3. Regulatory Arbitrage and Compliance Paradox. RWA tokenization blurs the boundaries of traditional asset classes. The U.S. "GENIUS Act" explicitly states that payment stablecoins do not fall under the category of securities or commodities, but securities-type RWAs are still strictly regulated by the SEC. In Hong Kong, while the Monetary Authority uniformly regulates stablecoin licensing, RWA projects must comply with different financial regulatory authorities according to the nature of the assets.

Single fiat-backed stablecoins have vulnerabilities (such as the UST crash), while RWA enhances risk resistance through diversified collateral (gold, commercial paper).

In this regard, Hong Kong's regulatory innovation provides a balanced approach: requiring stablecoin issuers to hold 100% of reserve funds in licensed institutions and publicly disclose the asset composition monthly, seeking a balance between ensuring safety and encouraging innovation. The Hong Kong "Stablecoin Regulation" even mandates that RWA must account for no less than 30% of the collateral.

Global Practice: The "Triple Pattern" of Institutional Competition

In the global practice of the integration of stablecoins and RWA, three differentiated paths are emerging:

U.S. Bill: The GENIUS Act Establishes a Federal Stablecoin Framework

The first federal-level regulatory framework for stablecoins. The core of the bill is to reshape regulatory logic through a three-tier structure:

1. Function Definition: Clearly define payment stablecoins as "digital assets" rather than securities or commodities, prohibit the payment of interest, and require a 1:1 peg to high liquidity assets in USD (cash, short-term U.S. Treasury bonds, repurchase agreements, etc.);

2. Issuance Access: Only U.S. registered entities are allowed to issue, non-bank institutions must meet capital and risk management requirements, and the issuance of algorithmic stablecoins is prohibited;

3. Layered Regulation: Federal banking agencies lead the systemic issuer regulation, while state-level regulation applies to issuers with a scale of ≤$10 billion, but it must be "substantially similar" to the federal framework.

Systemic competition has surpassed regulation itself, with the deeper contest being the discourse power of global financial infrastructure agreements. This move marks that the United States incorporates stablecoins into its national payment infrastructure, providing a systemic foundation for the global penetration of the "on-chain dollar".

Hong Kong Path: The "Breakthrough Point" of Offshore RMB

Hong Kong's Stablecoin Regulation establishes three major innovation pillars:

1. Strict compliance: The issuer must meet the minimum capital requirement (HKD 15 million) and fully custody the reserves.

2. Currency Breakthrough: Creating space for offshore Renminbi stablecoins, opening new paths outside the dollar system.

3. Scene implementation: Attract JD to utilize stablecoins to optimize cross-border e-commerce settlements, and promote Standard Chartered Bank to explore tokenized bonds.

What is even more noteworthy is its "LEAP" framework: through the four-dimensional linkage of legal regulation optimization (Legal), tokenized product expansion (Expansion), application scenario promotion (Application), and talent cultivation (Partnership), a digital asset ecosystem is constructed.

Mainland China's Innovation: The "Roundabout Strategy" of Data Assets

Under the constraints of directly putting domestic assets on-chain, the new paradigm of RDA (Real Data Assets) proposed by the Shanghai Data Exchange in 2025 achieves a breakthrough through "real number fusion."

In a typical case, Shanghai Steel Union packaged steel trading data into RDA, and SPDB issued the stablecoin "STEEL-CNY" based on this, charging a commission of 0.15% for each cross-border transaction, with annual profits exceeding 900 million yuan. This "domestic confirmation, overseas circulation" mechanism allows 30 million small and medium-sized enterprises to obtain cross-border financing through data assets.

UAE Model: Dual Track of Sovereignty and Market

The Digital Dirham, led by the Central Bank of the UAE, is the anchor of national sovereignty in the digital age, while the Dirham-pegged stablecoin serves as a vehicle for market efficiency, together forming a "dual-layer firewall in the governance framework:"

1. CBDC serves sovereign payment systems, cross-border clearing, and government affairs.

2. Stablecoins embedded in enterprise payments, DeFi systems, and market innovations

Learning from the lessons of the Terra crash in 2022, the UAE has prohibited all interest incentives and algorithmic stablecoins in the stablecoin regulations to be implemented in 2024, reflecting the foresight of institutional design.

When stablecoins carry payment efficiency and RWA injects real value, the dialectical unity of the two is fostering a programmable financial ecosystem parallel to the traditional system. In the next decade, whoever can connect the closed loop of "asset tokenization - stablecoin settlement - global circulation" within a compliant framework will be able to dominate the rule-making power of the digital financial era.