An Analysis from Stablecoin Licensing to On-Chain Fund Management

Original: 招银国际财富管理

Background of the Event

On January 21, 2026, Mr. Paul Chan Mo-po, Financial Secretary of Hong Kong, delivered a speech at the Davos Forum, emphasizing that Hong Kong, as an international financial center, will adopt a proactive and prudent strategy to develop digital assets, and promote responsible and sustainable market development based on the principle of “same activity, same risk, same regulation.” On April 10, 2026, the Hong Kong Monetary Authority officially announced the list of the first batch of “Stablecoin Issuer Licenses,” awarded to Hong Kong Shanghai Banking Corporation Limited and Dingdian Financial Technology Limited (led by Standard Chartered Bank, Animoca Brands, and Hong Kong Telecom). This marks a new stage in Hong Kong’s fiat-backed stablecoin regulation system, aimed at protecting users and standardizing issuance activities. Additionally, the SAR government actively promotes tokenization development, having issued three batches of tokenized green bonds totaling approximately US$2.1 billion; at the same time, a regulatory sandbox has been launched to encourage application innovation.

01 Overview

On the funding side, real-world currencies can exist in token form. Different financial ecosystem participants or institutions have varying understandings and applications of money. First, tokens pegged 1:1 to fiat currency, such as stablecoins issued and operated on public blockchains by private entities, are among the most discussed token types in the current market. On the other hand, central bank digital currencies (CBDCs) issued by central banks can be viewed as fiat tokens operating within a centralized system. Second, according to monetary supply theory, besides cash in circulation (M0), M1 (narrow money) includes demand deposits held by businesses and individuals, while M2 (broad money) includes time deposits. Deposit tokens, therefore, can be used as one of the on-chain payment tools.

02 Classification of On-Chain Fund Forms

How should we understand the development of RWA (Real-World Assets) on the funding side? We can refer to the diagram mentioned in the BIS (Bank for International Settlements) paper (see below), focusing on the intersection of Electronic and Universally accessible categories. We find that the three directions covered by on-chain funding include: 1) CBCC, corresponding to central bank digital currencies; 2) bank deposit, corresponding to deposit tokens; 3) cryptocurrency, including stablecoins.

Figure 1: Diagram of Currency Classification

(Data source: BIS)

1. Central Bank Digital Currency (CBDC) is a digital legal tender issued by a country’s central bank, representing a digital extension of traditional paper currency and coins. It exists electronically, usually pegged 1:1 to fiat currency, and is directly controlled and supervised by the central bank. CBDCs aim to improve payment efficiency, promote financial inclusion, and reduce cash usage. Potential advantages include enhanced monetary policy effectiveness, reduced fraud and money laundering risks, and facilitation of cross-border payments. However, challenges such as privacy protection, cybersecurity, and financial system stability also exist. Several countries, including China, Sweden, and the Bahamas, are conducting CBDC pilot studies and maintaining international cooperation. The development of CBDCs signifies a shift in the form of money and will have profound impacts on future financial systems and economic behaviors.

2. Deposit Tokens are essentially bank liabilities, representing the bank’s tokenization of customers’ fiat deposits (such as demand and time deposits) on a distributed ledger at a 1:1 ratio. They are not cryptocurrencies but represent the bank’s debt to depositors, with risks and legal status similar to traditional deposits.

It is noteworthy that deposit tokens have a key advantage over stablecoins: they can generate interest (the upgrade idea of Digital RMB 2.0 draws on this). Stablecoin issuers typically earn income from their reserve assets, but this income is generally not passed on to token holders. In contrast, deposit tokens can pay interest to holders, which is particularly attractive to institutions with large balances, such as crypto trading firms using stablecoins for fund transfers and collateral.

• 1) Demand deposit tokenization: Customers’ demand deposits can be tokenized to support 24/7 real-time cross-border transfers and settlements, effectively enhancing liquidity.
• 2) Time deposit tokenization: Time deposits can also be tokenized, usually via smart contracts, which release full or partial funds upon maturity or reaching preset conditions, or offer specific yields. Fundamentally, these still represent tokenized time deposits.

3. Stablecoins are cryptocurrencies pegged to fiat currencies or other assets, primarily aimed at maintaining stable value. Based on collateralization methods, stablecoins can be divided into several types; the four main collateral types are:

• 1) Fiat-collateralized stablecoins: These are backed by fiat currencies (like USD, EUR). For example, each issued stablecoin is backed by a reserve of 1 USD in a bank account.
• 2) Crypto-collateralized stablecoins: These are backed by other cryptocurrencies. To maintain stability, over-collateralization is common, requiring users to provide more value in crypto assets as collateral.
• 3) Algorithmic stablecoins: These do not rely on external collateral but use algorithms to control circulation supply to stabilize value. They increase supply when prices rise and decrease when prices fall.
• 4) Commodity-backed stablecoins: These are backed by physical commodities (like gold, oil). For example, each stablecoin’s value can be linked to the market value of a commodity.

03 Conclusion

We can analyze the evolution of the on-chain world from both technological and regulatory perspectives, and also grasp the current market stage from the funding and asset sides.

First, on the on-chain funding side (see diagram below), stablecoins correspond to central bank digital currencies (CBDCs) issued by central banks. Taking Hong Kong as an example, EnsembleTX will continue to operate in 2026, laying a solid foundation for next-stage innovation. Cross-bank settlement of tokenized deposit transactions will initially be conducted via the Hong Kong Real-Time Gross Settlement System (RTGS), with the pilot environment gradually upgraded to support 24/7 settlement of tokenized central bank money, promoting the continuous development of Hong Kong’s broader tokenized ecosystem.

Figure 2: Diagram of On-Chain Funding Classification

(Data source: JPMorgan & Oliver Wyman, Deposit Tokens: A Foundation for Stable Digital Money)

Second, on the on-chain asset side, as investment demand increasingly emphasizes space and time dimensions, asset types with lower minimum purchase amounts and extended trading hours to 24/7 will align closely with the characteristics of the on-chain funding side.