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State-Owned Banks Point to Three Major Opportunities and Challenges for Stablecoins

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State-owned banks are optimistic about stablecoins' potential in cross-border payments, supply chain finance and asset tokenization, noting divergent needs among three client segments — corporates, high-net-worth clients and the general public — while stressing that compliance, reserve assets and cybersecurity risks require prudent assessment, with ecosystem development and regulatory liberalization progress as key.

Digital Finance Shifts Toward a Single Shared Ledger

First Bank noted that the global financial system is gradually moving toward a blockchain-based digital finance model, while Taiwan has brought stablecoins into its regulatory framework through the Virtual Asset Service Act, clearly regulating their issuance, management and related business activities. On the opportunity side, stablecoins offer relatively stable prices, real-time settlement and lower transfer costs, with development potential in scenarios such as cross-border payments, supply chain finance and asset tokenization, and could operate alongside traditional financial services as an important digital settlement tool.

Needs of Three Client Segments Diverge Clearly

Facing demand from different client segments, First Bank observed that corporate clients focus on improving fund allocation efficiency, lowering cross-border transaction costs and optimizing settlement processes; high-net-worth clients pay more attention to diversified asset allocation, professional investment advisory and virtual asset custody services; while the general public places more emphasis on payment applications and cross-border transactions close to daily life. These shifts in demand can serve as important references for future product and service planning, showing that banks need to design complementary service models tailored to each segment.

Bank of Taiwan: Focus Is on Whether Assets Are Real and Trustworthy

Bank of Taiwan further analyzed that the essence of this transformation is a shift in financial infrastructure from separate bookkeeping to a single shared ledger. Blockchain allows different participants to record assets and execute transactions on the same ledger, with assets transferable and composable directly. Under such a division of labor, who provides the service is no longer the focus; the key is whether the assets on the ledger are real and trustworthy. Bank of Taiwan stressed that this makes the role of banks even clearer, including stablecoin issuance and reserve asset management as well as digital asset custody, all of which must be undertaken by institutions with credibility and a regulatory foundation.

Compliance and Risks Still Require Prudent Assessment

Taiwan Cooperative Bank reminded that stablecoins and related digital asset developments could bring new application models to financial services, such as using blockchain technology to improve transaction and fund transfer efficiency, or combining with payments, cross-border remittances and other financial services. However, they still involve issues such as regulatory compliance, reserve asset management, anti-money laundering, information security, consumer protection and operational risks, while market scale and application effectiveness will also depend on use cases and the gradual formation of the ecosystem.

Land Bank: Export-Oriented Economy Puts Greater Weight on Settlement Efficiency

Land Bank of Taiwan noted that as an export-oriented economy, Taiwan's enterprises have sustainedly growing demand for cross-border fund allocation and improved settlement efficiency. Banks can leverage their existing strengths in large corporate financial transactions, trade finance, foreign exchange hedging and compliance and risk control to explore complementary service models combining stablecoins in cross-border payments, real-time settlement and global fund management. At the same time, banks must continue to monitor regulatory rules and the business liberalization process, prudently assess reserve assets, redemption and liquidity risks, and strengthen anti-money laundering, information security and customer rights protection, while also improving supporting measures such as blockchain technology infrastructure, professional talent development and internal control adjustments.

FAQ

Which application scenarios for stablecoins are state-owned banks optimistic about?

They are mainly optimistic about cross-border payments, supply chain finance and asset tokenization, arguing that their relatively stable prices, real-time settlement and lower transfer cost features allow them to operate alongside traditional financial services as a digital settlement tool.

How do needs differ across the three client segments?

Corporate clients value fund allocation efficiency, cross-border transaction costs and settlement process optimization; high-net-worth clients focus on diversified asset allocation, investment advisory and virtual asset custody; the general public values payment applications and cross-border transactions in daily-life scenarios.

What risks and supporting measures are involved in pursuing stablecoin business?

It involves regulatory compliance, reserve asset management, redemption and liquidity risks, anti-money laundering, information security, consumer protection and operational risks. Banks must monitor the regulatory liberalization process and improve technology infrastructure, talent development and internal control systems.