Asia Morning Briefing: Asia’s Banks Look to Stablecoins to Prevent Deposit Flight
Asia’s adoption of stablecoins like USDT and USDC is quietly reshaping its cross-border finance landscape. Unlike the U.S.’s highly publicized focus, Asian banks are strategically leveraging stablecoins to counter deposit flight and declining transaction revenue. Major banks in Korea, Japan, and Hong Kong are actively exploring local-currency stablecoins as a defensive measure. This proactive approach is evident in Korea’s consortium of eight major banks aiming to launch a Korean won stablecoin by 2026, and similar initiatives in Japan and Hong Kong.
Payment service providers (PSPs) are significantly accelerating stablecoin adoption, shifting away from expensive traditional banking systems. The volume of stablecoin transactions is rapidly increasing, with Fireblocks reporting that stablecoins now constitute about half its transaction volume. This growth is fueled by the increasing use of stablecoins by Asian e-commerce giants, as exemplified by JD.com’s plan to reduce supplier-payment costs using stablecoins. PSPs like Tazapay utilize USDC for efficient cross-border payments, facilitating instant payouts for content creators and gamers.
Tether’s USDT dominates stablecoin flows in emerging Asian markets due to its liquidity and accessibility, while USDC gains traction in regulated hubs like Singapore and Hong Kong. Weekend transaction volumes are 30% higher, highlighting stablecoins’ role in retail and gig economy transactions. This quiet transformation of Asia’s cross-border finance infrastructure, driven by both defensive institutional adoption and pragmatic corporate usage, is poised for significant growth.
Meanwhile, Bakkt Holdings is seeking $1 billion to invest in Bitcoin, mirroring a global trend of companies adding Bitcoin to their balance sheets. This move comes amidst recent setbacks, including the loss of major clients and exploration of selling its loyalty division. The increased investment in Bitcoin signals a continued interest in the cryptocurrency market despite recent challenges. Other market movements include Bitcoin holding steady above $107K, Ethereum testing major resistance, gold slipping despite a weaker dollar, and the S&P 500 nearing record highs. The rising global competition for crypto hubs is also driving developments, particularly in Hong Kong. The real-world asset tokenization market continues to grow, reaching a valuation of $24 billion, dominated by private credit and US Treasury debt.
