Mere Issuance of Stablecoin Won’t Work, Usage is Important (ASA News #3)

*[ASA News] is a bi-weekly newsletter where we share the most important news related to stablecoin in Asia. (2025.07.13~07.26)

1. Tokenized RWA Settlement, Emerging Use Case of Stablecoin

1.1 [News] KOSCOM to Test Stablecoin Settlement System for Korean Capital Markets

Source: Market Data Service<Financial Information Service<Business<koscom

KOSCOM plans to test a stablecoin-based settlement system for tokenized securities (STOs) in Korea’s capital markets using an ‘Atomic Settlement’ process, which enables simultaneous clearing and settlement. The validation of this technical concept is set for completion by the end of this year to assess the feasibility of implementing the system, reflecting an initiative designed to bridge traditional finance and digital assets, thereby preparing market infrastructure for broader stablecoin adoption in the future.

Link to the News: KOSCOM validates stablecoin-based settlement system for capital market transformation

1.2 Commentary

1.2.1 Heechang (ASA, Four Pillars) - Connect the Local Market to the Global Market

For crypto traders, there are two main options: CEX and DEX. In 2023, trading volume on DEX platforms accounted for less than 10% of the total spot volume on centralized exchanges. However, last month, this number rose significantly to around 30%. The advantages of DEXs are becoming increasingly clear, driven by increasing on-chain liquidity and the ability for traders worldwide to participate freely at any time.

Now, the opportunities are expanding from cryptocurrencies into traditional financial assets such as funds, stocks, and other securities. Previously, the volatility inherent in cryptocurrencies posed significant settlement risks for these traditional assets, but stablecoins have emerged as a solution to mitigate this volatility.

A recent pilot conducted by KOSCOM, a subsidiary of Korea Exchange, marked a meaningful step towards making Korean financial market assets accessible to global investors. Although challenges remain - such as whether Korean assets can appeal sufficiently to international investors - the original promise of blockchain technology is gradually becoming a reality.

2. Programmable Reward and Stablecoin

2.1 [News] DBS Bank launches blockchain-based programmable rewards

Source: DBS Bank launches blockchain-based programmable rewards

DBS Bank, Singapore’s largest bank, has introduced a blockchain-based Programmable Rewards program integrated into its widely-used DBS Paylah! app, enabling smart contract-powered e-vouchers for 2.9 million users across 40,000 merchant locations. These vouchers automate conditions such as specific merchant redemption or expiration dates, streamlining reconciliation and reducing costs. Initially, customers can convert rewards points into e-vouchers with additional cashback promotions available for a limited time.

DBS aims to leverage this system not only for marketing but also for employee and government rewards, aligning with Singapore’s ongoing digital currency initiatives, notably the Monetary Authority of Singapore’s Purpose Bound Money (PBM) projec t, in which DBS has participated since 2022. Unlike previous blockchain reward programs like Bakkt’s failed initiative, DBS’s solution benefits from existing wide user adoption and strong merchant integration.

Link to the News: DBS Bank launches blockchain-based programmable rewards

2.2 Commentary

2.2.1 Heechang (ASA, Four Pillars) - DBS’ Programmable Reward and Synergy with Stablecoin

In the stablecoin landscape, there are three primary industry groups aiming to secure their share of this rapidly growing market. The first group comprises banks such as DBS and JP Morgan, which are particularly well-positioned to manage collateral assets and issue stablecoins given their established financial infrastructure and reputation. The second group consists of fintech companies like Stripe, which possess extensive distribution channels and large active user bases. The third group involves crypto-native organizations like Tether and Circle, who are actively developing use cases for CEXs and on-chain applications.

Previously, regulatory uncertainty created significant hurdles for the first two groups. However, as stablecoin regulations become clearer and global regulatory momentum grows, these groups have begun actively developing their strategies. Given the cautious stance of most regulatory bodies toward stablecoins, banks appear to be the preferred entities for stablecoin issuance, benefiting from their regulated status and existing trust frameworks.

In this context, DBS’s strategy of launching “programmable rewards” integrated with blockchain technology is particularly notable. DBS Paylah!, widely adopted in Singapore for everyday activities such as transportation, dining, shopping, and bill payments, forms a foundation for this initiative. With the infrastructure of programmable rewards firmly established, the issuance of a stablecoin by DBS could significantly accelerate the transition from a semi-blockchain infrastructure to a fully integrated blockchain ecosystem. A green sign on stablecoin issuance from the singapore regulatory body would be the starting gun of the race.

3. Could Tokenized Bank Deposits Compete with Stablecoin?

3.1 [News] Morgan Stanley: Stablecoins Could Challenge Traditional Bank Deposits

Source: 'Deposit Tokens' Could Trade On DeFi Like Stablecoins: JPMorgan

Morgan Stanley notes that the stablecoin market has reached $263 billion, with Tether alone accounting for 66% of reserves held in U.S. Treasury bills - representing around 2% of the total T-bill market. Stablecoins present notable advantages over traditional bank deposits, including rapid settlement, broader global accessibility to dollars, and seamless cross-platform mobility. However, the current regulatory environment, exemplified by the Genius Act, restricts interest payments on stablecoins and emphasizes private-sector-driven solutions rather than central bank digital currencies (CBDCs).

Link to the News: Are stablecoins a risk to bank deposits? By Investing.com

3.2 Commentary

3.2.1 Moyed (ASA, Delta Network) - Stablecoins vs Tokenized Deposits: Competition or Coordination?

There are broadly two scenarios for how stablecoins and tokenized deposits may evolve in relation to each other. The first is one of competition. In this view, stablecoins act as a disruptive alternative to traditional deposits, particularly for smaller banks. While the GENIUS Act prohibits issuers from offering interest, it does not prevent intermediaries like Coinbase from doing so through reserve asset rewards. As a result, stablecoins can offer yield-like features that smaller institutions are unable to replicate, making them vulnerable to deposit outflows and disintermediation.

The second scenario envisions a complementary structure. Tokenized deposits, as demonstrated by Citi’s strategy, are positioned to function as an infrastructure layer for the broader digital asset ecosystem. Jane Fraser’s comments during Citi’s earnings call emphasized tokenized deposits as the backbone for 24/7, cross-border clearing between bank hubs, enabling stablecoins and other on-chain assets to settle securely and efficiently across jurisdictions. This model does not compete with stablecoins directly but rather integrates them into a bank-led framework of programmable finance.

In markets outside the United States, tokenized deposits may find even stronger footing. In Asia, where financial systems are predominantly bank-centered, tokenized deposits benefit from legal clarity, consumer protection, and regulatory familiarity. In South Korea, for example, stablecoins do not fall under the depositor protection scheme, while tokenized deposits enjoy parity with traditional accounts. Without yield advantages or insurance protections, stablecoins face steeper adoption barriers in such environments.

4. Other News

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4.1 Theme 1. Eyes on Tokenization

4.1.1 Singapore Explores Real Estate Tokenization for Private Investors

• Minimum investment starts at $19,500, significantly lower than traditional private equity funds, targeting accredited investors with assets above $1.55M or annual income over $233K.

• Platform Fraxtor, licensed by MAS, focuses on developed markets (Singapore, Australia, UK, Japan) with emphasis on residential development and value-add opportunities.

• Tokenization addresses key challenges: lower entry barriers, access to vetted deals, removes asset management burden, and potentially offers better liquidity than traditional real estate.

4.1.2 MUFG Acquires ¥100B Osaka Property for Real Estate Tokenization

• Japan's largest bank to tokenize high-rise building for both retail and institutional investors, expanding digital securities market.

• Real estate dominates Japan's tokenization landscape with 80% of 63 total digital securities offerings, worth ¥194B ($1.3B).

• MUFG Trust competes with former client Mitsui in tokenization space, while maintaining connection through Progmat platform.

4.1.3 Blockchain Expert: Tokenization Will Democratize Green Energy Investment

• Tokenization enables fractional ownership of renewable energy projects, allowing small investors to participate with minimal capital requirements.

• Smart contracts will automatically distribute passive income to token holders based on actual energy production, ensuring transparency and trust.

• ICB Labs plans to launch a solar tokenization project in 2026, implementing real-time performance tracking and automated reward systems.

4.2 Theme2. Governments are Laying out Clear Legal Framework

4.2.1 Hong Kong Set to Implement Mandatory Stablecoin Licensing in 2025

• New regulations will require licenses for fiat-backed stablecoins like USDT and USDC, aligning with EU's MiCA framework.

• Hong Kong Monetary Authority to enforce strict compliance measures including reserve management and AML controls.

• Ping An acknowledges the regulatory changes while highlighting its blockchain expertise, though no specific projects announced.

4.2.2 South Korea Introduces Landmark Won-Based Stablecoin Legislation

• Bill requires stablecoin issuers to maintain 100% reserves in high-liquidity assets and obtain FSC approval with 5 billion won minimum capital requirement.

• Mandates user protection measures including 3-day redemption guarantees and prohibition of interest payments on stablecoin holdings.

• Financial regulators (FSC, Bank of Korea, Ministry of Finance) granted emergency powers to maintain market stability and monetary policy control.

4.2.3 Pakistan Introduces Virtual Assets Ordinance 2025, Establishing First Crypto Regulatory Framework

• New law creates licensing and supervision system for virtual assets and service providers, coming into effect July 8, 2025.

• Defines two types of regulated tokens: Fiat-Referenced Tokens and Asset-Referenced Tokens, with 1 billion PKR minimum capital requirement for issuers.

• Requires 100% reserve backing in high-quality liquid assets for tokens, with mandatory quarterly audits and strict redemption policies.

4.3 Theme3. China is Looking into Stablecoin

4.3.1 China's Conflux to Launch Offshore Yuan Stablecoin Targeting Belt and Road Countries

• Partners with Eastcompeace Technology, AnchorX, and TokenPocket to develop stablecoin for cross-border payments across 150+ BRI nations.

• Joins tech giants Ant International and JD.com in race for Hong Kong stablecoin licenses, as China explores alternative to boost yuan's 3% global trade share.

• Initiative comes as Chinese firms embrace stablecoins, with ChinaAMC recently launching the first global yuan-denominated tokenized money fund.

4.3.2 Shanghai Signals Major Shift in China's Stablecoin Policy, Plans Pilot Program

• Local state-owned companies Guotai Haitong and Shanghai Data Group to study stablecoin implementation feasibility.

• Follows supportive comments from central bank governor Pan Gongsheng on stablecoins' role in cross-border payments.

• Shanghai SASAC director calls for increased research into blockchain applications for international trade and supply chain finance.

4.3.3 Shanghai Exposes $6.5B Illegal USDT Network in Major Crackdown

• Network operated through 17 shell companies using a dual-operation system to bypass regulations, splitting forex transactions between domestic and foreign operations.

• Despite the massive scale of the illegal operation, USDT's market cap remains stable with minimal impact on broader crypto markets.

• Chinese authorities expected to implement stricter regulations on stablecoin flows and cross-border transactions following this discovery.