Reporter of Meijing: Wang Haimin & Editor of Meijing: Ye Feng

Almost overnight, "stablecoin" suddenly became popular. According to Jinmen Finance, in just two days from May 29 to May 30, more than a dozen brokerage telephone conferences with stablecoin as the keyword were held, involving more than a dozen brokerages in the industry. In the past few days, many stablecoin concept stocks have also performed strongly.

Behind this craze is the fermentation of the event catalyst. Recently, the Legislative Council of the Hong Kong Special Administrative Region passed the "Stablecoin Bill". The impact and opportunities of the passage of this bill on various links and participants in the stablecoin industry have recently attracted the attention of brokerages.

Securities firms are vying to pay attention to stablecoin investment opportunities

According to Jinmen Finance, from May 29 to May 30, more than a dozen securities firms including CITIC Securities, Cathay Haitong, China Merchants Securities, Guojin Securities, Soochow Securities, Western Securities, and Guosheng Securities held 13 roadshows with "stablecoin" as the keyword. In the next few days, securities firms such as CICC and GF Securities will also hold telephone conferences related to stablecoins.

Screenshot from: Jinmen Finance

Looking back on this year, the last time so many brokerages rushed to hold a conference call to focus on the same topic was probably hot topics such as DeepSeek, humanoid robots, and reciprocal tariffs.

At the same time, in recent days, stablecoin concept stocks in A-shares and H-shares such as Hailian Jinhui, Xiongdi Technology, Langxin Group, Lianlian Digital, and Zhongan Online have all strengthened in the short term. Yesterday, Lianlian Digital rose nearly 45%, and Xiongdi Technology's largest increase in the past two trading days reached 44%. According to Huaxi Securities' overseas research team, a stablecoin is a cryptocurrency that maintains its own relatively stable value by establishing an anchor relationship with legal currencies (such as the U.S. dollar, the Chinese yuan), commodities or other assets. The original intention of its birth was to effectively solve the problem of large price fluctuations of virtual currencies such as Bitcoin.

In fact, stablecoins are not new things that "came out of nowhere". There have been discussions about stablecoins in China a few years ago. According to previous media reports, Li Bo, deputy governor of the central bank, pointed out at the Boao Forum for Asia 2021 Annual Meeting Forum that the People's Bank of China is studying the regulatory rules for Bitcoin and stablecoins.

In addition, in terms of practical applications, stablecoins have been widely popularized in the fields of payment and trading. Dongwu Securities' latest research report pointed out that according to a report from the cryptocurrency exchange CEX.IO, the total transfer volume of stablecoins in 2024 reached 27.6 trillion US dollars, exceeding the total transaction volume of traditional payment giants Visa and Mastercard. Whether in cross-border remittances, decentralized finance (DeFi) lending, or online shopping, stablecoins have demonstrated the advantages of fast and low cost, gradually affecting the ecological pattern of global payments and transactions.

However, in the A-share market, stablecoins have only recently become a hot topic. Before May this year, this concept was basically ignored.

Industry insiders believe that the rapid rise of stablecoins in the market recently is closely related to multiple catalysts:

1. Recently, the Legislative Council of the Hong Kong Special Administrative Region passed the Stablecoin Bill (hereinafter referred to as the "Bill"), marking that Hong Kong has become the world's first jurisdiction to establish a comprehensive regulatory framework for fiat stablecoins.

2. Circle Internet Group, the issuer of the world's second largest stablecoin USDC, recently announced the terms of its IPO. The company plans to list on the New York Stock Exchange and raise up to US$624 million.

3. Recently, the US GENIUS Act (Guiding and Establishing the National Innovation Act for Stablecoins in the United States) has made important progress in the Senate. Once the bill is passed, it may promote the growth of institutional investment in stablecoins.

Among them, the most concerned by the market is the passage of the "Draft". The Hong Kong Special Administrative Region Government Office in Shanghai recently published an article on its official account, pointing out that the "Draft" is expected to take effect this year. In the future, anyone who issues legal currency stablecoins in Hong Kong during the course of business must apply for a license from the Financial Authority. Only legal currency stablecoins issued by licensed issuers can be sold to retail investors.

The computer team of CITIC Construction Investment recently released a viewpoint pointing out that the introduction of the "Draft" fills the regulatory gap in virtual assets and enhances the trust of investors. Compliant and transparent stablecoins are expected to play an indispensable role as an "engine" and "cornerstone" in the RWA (real asset tokenization) ecosystem, and will accelerate the process of converting various real assets into digital tokens through blockchain technology.

Securities: Stablecoins have great potential in the field of cross-border payments

According to the reporter's observation, since it is an emerging topic, the above-mentioned securities companies have held mostly popular science conference calls on stablecoins in the past two days. For example, the conference call held by CITIC Securities last night focused on the impact and opportunities of the "Draft" on various links and participants in the stablecoin industry. The conference call held by Western Securities this morning was themed "What is a stablecoin?", and was interpreted from the perspectives of stablecoins, RWA concepts, and related national strategies.

It is worth mentioning that the term RWA has recently been frequently mentioned by institutions together with stablecoins. So, what is the connection between the two?

To this end, today, Chen Chen, an ecological partner of Hong Kong Victory Securities, told the reporter of "Daily Economic News" that stablecoins are the "currency anchor" of on-chain finance, which can be regarded as a transaction medium linking legal currency and encrypted assets, while RWA is an "asset anchor". Through blockchain technology, real physical assets in reality are converted into tradable digital tokens on the chain. The two together constitute a closed loop of value connecting the real world and the on-chain world. "In layman's terms, the two (stablecoins, RWA) are symbiotic: stablecoins need 'asset anchoring' to establish trust and expand scenarios, and RWA needs 'on-chain funds' to obtain liquidity." Chen Chen said.

From public information, stablecoin-related businesses are expected to be officially launched this year. On May 18, Qiu Dagen, a member of the seventh Legislative Council of the Hong Kong Special Administrative Region and chairman of the Hong Kong Information Technology Federation, said in an interview with the "Daily Economic News" that it is expected that stablecoin issuers will start business in Hong Kong in the second half of the year. "In the future, traditional assets such as stocks and bonds may also be traded through blockchain technology."

As for the application prospects of stablecoins, according to Chen Chen, there are currently two core scenarios for stablecoins - trading scenarios and payment scenarios. "In terms of trading scenarios, stablecoins have become safe-haven assets and trading media by binding large exchanges and on-chain contract channels. The future growth point lies in the new opportunities of RWA (real world assets) on the chain to form a similar "on-chain Nasdaq"; in terms of payment scenarios, in the cross-border payment needs of B-end and C-end, stablecoins have obvious cost advantages and huge demand, which seriously impacts the monopoly of the traditional banking system."

In the view of the overseas research team of West China Securities, stablecoins have great potential in the field of cross-border payments. First of all, stablecoins can realize the real-time arrival of funds, greatly shortening the transaction cycle and reducing transaction costs. Cross-border real-time settlement is achieved based on blockchain technology, and the handling fee is only 1/10 to 1/100 of the traditional banking system, especially in emerging markets where it can replace legal tender for daily payments and salary distribution. In addition, stablecoins are expected to become a tool for currency internationalization. Taking the RMB stablecoin as an example, in cross-border trade, by using the RMB stablecoin for settlement, the traditional SWIFT system can be bypassed.

"As far as the stablecoin industry chain is concerned, it can be divided into two lines: issuers and distributors. The concentration of issuers is more obvious, and there are more issuers. Lianlian Digital, whose stock price has skyrocketed recently, is a stablecoin payment company. The industry's profit model is similar to that of commercial banks absorbing deposits and lending. It attracts deposits at zero interest on the liability side and allocates U.S. debt assets on the asset side to obtain returns." Chen Chen said, "The core competitive factors in the stablecoin track are mainly three points: 1. Credit endorsement; 2. Liquidity support; 3. Channels and customer acquisition capabilities. At present, the competitive landscape of the top stablecoins has evolved from the competition in the transaction scenarios of on-chain/exchanges to the competition for markets and channels in non-encrypted scenarios such as cross-border payment settlement."

Talking about the market size of stablecoins, Chen Chen pointed out, "The current stablecoin market size has reached nearly 250 billion US dollars. In the past, it was mainly driven by bottom-up demand, with great conflicts of interest with the traditional financial system and high compliance thresholds. With the passage of stablecoin bills around the world, compliant stablecoins have gradually reflected higher strategic value."

Looking ahead to the impact trend of stablecoins and RWA on the virtual asset industry, Chen Chen analyzed that "in terms of short-term impact, as the compliance channel is opened and the global capital allocation is restructured, virtual assets will enjoy liquidity dividends, and reversely attract high-quality assets to the chain, forming a positive flywheel effect; in terms of long-term impact, on-chain finance will change from marginal experiments to the backbone of global financial infrastructure, and RWA will become the core driving force of the 'new skeleton of the global financial system'." Although the application prospects of stablecoins are promising, some market participants believe that the recent market hot spots have rotated rapidly, and the stablecoin sector is not strong today, indicating that there are differences in the market, and the sustainability of the market should be observed in the future. According to the reporter's observation, there are obviously few in-depth research reports on stablecoins by domestic securities companies, and mainstream institutions may still have a certain cognitive gap on stablecoins. In the short term, the market may still be in the stage of concept speculation.