From CBDC Pause to Stablecoin Surge (ASA News #2)

*[ASA News] is a bi-weekly newsletter where we share the most important news related to stablecoin in Asia. (2025.06.29~07.12)

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Written by Moyed, Heechang

1. The Stablecoin Dilemma: Sovereignty vs Dollarization

1.1 [News] China's tech giants lobby for offshore yuan stablecoin

Source: China's tech giants lobby for offshore yuan stablecoin, sources say

In July 2025, Chinese tech companies JD.com and Ant Group urged the People’s Bank of China to approve the launch of offshore yuan stablecoins, starting with Hong Kong. The proposal aims to reduce reliance on US dollar stablecoins, increase global use of the yuan, and improve the efficiency of cross border payments. The initiative coincides with Hong Kong’s new stablecoin regulations, which take effect on August 1. JD.com and Ant Group plan to issue the yuan stablecoin backed by bank deposits and compliant with regulatory oversight. The rollout is expected to begin in Hong Kong and later expand to China’s free trade zones. This move signals a potential shift in China’s stance on digital assets, following its 2021 domestic crypto ban.

1.2 Commentary

1.2.1 Moyed (ASA Contributor, Delta Network) - What can we learn from this proposal?

One interesting angle in the offshore yuan stablecoin proposal is how Chinese tech companies are framing the narrative. They emphasize that the main purpose is to reduce reliance on the US dollar. However, this justification is not without debate. Some argue that launching local currency stablecoins could actually accelerate dollar adoption. For instance, Bank of Korea Governor stated in a CNBC interview that “the existence of a won denomianted stablecoin may make it easier for users to convert to dollar stablecoins, ultimately increasing capital outflow” In other words, there is still no consensus on whether issuing local stablecoins weakens or strengthens national dependence on the US dollar.

Another notable point is that JD.com and Ant Group are exploring a bank deposit-backed model for the yuan stablecoin. As someone who supports the idea of deposit tokens, I see this as a realistic and pragmatic approach. It avoids undermining a country’s core monetary policy while still pushing forward digital asset innovation. Backing the stablecoin with bank deposits keeps the design closely tied to the regulated financial system while still offering the core benefits of stablecoins, such as instant settlement, low fees, and programmability.

1.2.2 Ian Lee (RD Tech) - CNH Stablecoin Urgency: Trade Strategy Meets Geopolitical Demand

I believe in the end, trade flow volume and preferred currencies will determine the utilization.

So it’ll ride along the ongoing initiatives to press for CNY-denominated trade flows versus USD. The issue today is that stablecoins have been quickly replacing fiat flow as alternatives to local fiat, due to local currency instability and international acceptance. So, not having one for CNH means USD-denominated stablecoins will drown out China’s efforts to offer a non-USD alternative as an international trade currency and leaves them out of the playing field as TradFi moves toward stablecoin usage overall.

At the same time, geopolitical friction between the U.S. and China has created demand from Chinese firms for a non-U.S.-regulated alternative yet one that still allows them to remain compliant. Thus, the importance of a Hong Kong–born stablecoin.

2. Erebor and the Rise of the Stablecoin-First Bank

2.1 [News] Palmer Luckey, backed by Palantir's Lonsdale, to launch crypto-focused bank

Source: Palmer Luckey, backed by Palantir's Lonsdale, to launch crypto-focused bank

In July 2025, a group of tech billionaires led by Palmer Luckey, with backing from Peter Thiel’s Founders Fund and venture capitalist Joe Lonsdale, launched a new US bank named Erebor to serve innovation-driven companies following the collapse of Silicon Valley Bank. The bank is applying for a national charter and intends to offer both traditional banking services and digital asset support. According to reports, Erebor plans to hold stablecoins on its balance sheet and aims to become a fully regulated entity facilitating stablecoin transactions. This positions Erebor not only as a challenger bank for startups and crypto firms, but also as a potential key player in the regulated stablecoin ecosystem.

2.2 Commentary

Moyed (ASA Contributor, Delta Network) - First-principle apporach in stablecoin bank.

Erebor presents a particularly interesting shift in the stablecoin landscape because it represents the first real bottom-up approach to building a bank with stablecoins at its core. Until now, the direction was either traditional banks exploring stablecoins, or stablecoin issuers like Circle and Ripple pursuing banking licenses to gain regulatory legitimacy. Erebor flips that sequence. If it succeeds in building from first principles with stablecoins as the native format for deposits and infrastructure, it could become a powerful new model. It would not be surprising to see new entrants in markets like Korea begin to benchmark against this strategy.

What does it really mean to be “the most regulated entity facilitating stablecoin transactions”? Are customer deposits being tokenized into stablecoins? If so, how are they protected, are they covered under deposit insurance? How is reserve management handled? Is this functionally a deposit token in disguise? While the vision is compelling, there is still a lack of clarity about how such a system would operate in practice, especially within the current regulatory and supervisory frameworks.

3. Can CBDC and Stablecoins Co-Exist?

3.1 [News] South Korea Suspends CBDC Project as Banks Pivot to Stablecoins

Source: Bank of Korea pauses CBDC project as local stablecoin adoption picks up speed

The Bank of Korea has paused its wholesale central bank digital currency (CBDC) and tokenized deposit initiative, known as Project Han River, after significant pushback from participating banks. The first phase of the project involved 100,000 users and required the seven banks to collectively invest around 35 billion won ($26 million). Despite the central bank’s offer to subsidize future costs, banks remain concerned about the high expenses and an unclear path to commercialization. This uncertainty is compounded by ongoing legislative efforts to regulate stablecoins, which has led the central bank to delay further trials until there is more clarity on how CBDCs, stablecoins, and deposit tokens might coexist in Korea’s financial ecosystem.

As the CBDC project is put on hold, Korean banks are shifting their focus toward launching their own stablecoins, forming a consortium to take advantage of new government plans supporting broader stablecoin issuance.

3.2 Commentary

3.2.1 Heechang (ASA, Four Pillars) - Stablecoins and CBDC will Co-Exist

CBDC is a digital form of a country’s official currency, issued and directly regulated by the central bank. CBDCs are centralized, fully backed by the issuing government, and typically designed to complement or partially replace traditional cash. The introduction of CBDCs carries significant implications: they can improve payment efficiency, lower transaction costs, and enhance monetary policy effectiveness by providing central banks with greater transparency and real-time transaction data.

Many Asian countries have explored CBDCs through pilot programs. In Korea, a public CBDC pilot officially began in April but has since been paused due to the government shifting its focus towards stablecoins, following similar strategic priorities laid out by regions such as the U.S., EU, and Hong Kong.

I believe CBDC and Stablecoins will Co-Exist in the future.

While CBDCs offer clear benefits in terms of monetary policy control and operational efficiency, stablecoins present themselves as a potentially superior form of digital currency, especially due to their programmability and flexibility. Currently, however, the potential of stablecoins remains underexplored. Thus, as stablecoins grabbed attention, we are at this stage to actively pursue stablecoin-related legislation, support key players in the ecosystem, and thoroughly examine strategies that enable CBDCs and stablecoins to effectively coexist.

*Check out these two great research articles to dive deeper into this topic

• A Network Model of Money - Luca Prosperi

• A Strategic Framework Proposal for Korean CBDC and Stablecoin - DeSpread Research

4. Other News

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4.1 Theme 1. Stablecoins Enter the Mainstream

4.1.1 Naver Pay and Kakao Pay Plan Won Stablecoin Launch, Face Liquidity Challenges

• Both companies have filed multiple stablecoin-related patents, with Kakao Pay registering KKRW and Naver Pay filing for NKRW brands.

• Previous won stablecoins failed due to insufficient liquidity - for comparison, successful USD stablecoins have $243.5B market cap with strong trading volumes.

• 88% of current stablecoin transactions are used in crypto trading, while only 6% are used for payments, highlighting the challenge for payment-focused stablecoins.

4.1.2 Fiserv and PayPal Partner to Enable FIUSD and PYUSD Stablecoin Interoperability

• Partnership aims to facilitate domestic and international fund transfers through stablecoin integration across banking and payments systems.

• Fiserv launches FIUSD, a new bank-friendly stablecoin designed for financial institutions to offer next-gen banking solutions.

• Initiative targets key payment flows including cross-border transactions, payouts, and merchant solutions to enable faster, 24/7 global transfers.

4.1.3 South Korea Suspends CBDC Project as Banks Pivot to Stablecoins

• Seven Korean banks spent $26M on initial CBDC trials, now pausing due to high costs and uncertain commercialization path.

• Banks forming stablecoin consortium as government plans to enable broader stablecoin issuance.

• Project discussions may resume in 2026, signaling potential shift in global CBDC vs stablecoin dynamics.

4.2 Theme2. Tokenized Finance Expands Globally

4.2.1 GF Securities Becomes First Hong Kong Firm to Launch Daily Interest-Bearing Tokenized Securities on HashKey Chain

• Introduces "GF Token" in USD, HKD, and RMB with daily interest accrual and redemption features, benchmarked to SOFR for USD version.

• Offers multi-channel distribution through both GF Securities and HashKey Exchange, allowing investors to hold tokens in traditional securities accounts or directly on-chain.

• Expands access beyond institutional investors to include High-Net-Worth Individual Professional Investors, marking broader adoption of tokenized securities.

4.2.2 Robinhood to Launch Tokenized OpenAI and SpaceX Shares for EU Users

• CEO Vlad Tenev announced $1 million worth of tokenized OpenAI shares will be distributed to eligible EU users through the Robinhood app.

• Initial token holders will face a lock-up period before trading becomes available.

• Platform expanding to offer over 200 tokenized U.S. stock options for European users as part of growth strategy.

4.2.3 BitGo and Dinari Partner to Launch Unified API for Tokenized Stocks and Crypto

• New platform will combine access to 100+ tokenized U.S. stocks (like AAPL, TSLA) alongside cryptocurrencies and stablecoins through a single API.

• Platform features institutional-grade custody with insurance, serving over 60 global markets with regulatory compliance built-in.

• Set to launch in private beta Q3 2025, solving the multi-vendor integration challenge that typically takes months for trading platforms.

4.3 Others

4.3.1 Japanese Bank Hokkoku Partners with Soft Space to Launch Stablecoin-Compatible SoftPOS Solution

• Solution allows merchants to accept both contactless card and stablecoin payments using only Android mobile devices, eliminating need for specialized hardware.

• Will support Tochika, a Japanese yen-backed stablecoin, alongside major card networks like Visa and JCB.

• Launching autumn 2025 with PCI MPoC security certification, part of initiative to create a Super Cashless Region in Hokuriku area.

4.3.2 China Economist Urges Yuan-Pegged Stablecoins to Counter USD Dominance

• Dollar-pegged stablecoins currently outnumber yuan-based ones by 80:1, limiting China's global financial influence.

• Proposed strategy includes launching pilot programs in free trade zones and Belt and Road countries with regulatory frameworks.

• Yuan's undervaluation linked to insufficient global liquidity, which stablecoins could help address through enhanced cross-border settlements.

4.3.3 Project Guardian Paper Reveals Role of Ant Whale in Cross-Border Tokenized Deposits

• Ant International can act as liquidity provider between banks' tokenized deposits, leveraging its network of 1.2B consumers across 200+ countries.

• ISDA and industry leaders exploring standards for interoperability between different tokenized deposit platforms and technologies.

• Multiple solutions demonstrated, including HSBC's Baton Core FX which has processed $9.4T in transactions, and BNY-OCBC's direct bank-to-bank interoperability.

4.3.4 Hong Kong to Launch Third Tokenized Bond Offering Amid Major Digital Asset Push

• Government plans tax incentives including stamp duty exemptions for tokenized ETF transfers to boost adoption.

• New "LEAP" framework introduces stablecoin licensing from August 1st, focusing on legal clarity and ecosystem development.

• HKEX launches first digital asset indexes for Bitcoin and Ethereum during Asian trading hours to attract institutional investors.

4.3.5 Japan’s Minna Bank to Explore Stablecoin Issuance on Solana

• Minna Bank, backed by Fukuoka Financial Group, will explore issuing stablecoins using SORAMITSU’s platform on Solana.

• The move aligns with Japan’s revised Payment Services Act, allowing regulated stablecoin issuance via trust banks.

• The initiative targets real-world payments and remittances, leveraging blockchain scalability and full regulatory compliance.