The relationship between RWA and stablecoins

1. What is a Stablecoin

• Simple Explanation: A stablecoin is a type of cryptocurrency that maintains its value in line with real-world assets (such as the US dollar). Common stablecoins include USDT and USDC, which are typically valued at 1 dollar, making their prices relatively stable, unlike Bitcoin, which can experience significant fluctuations.
• Function: The function of stablecoins is to help people avoid the risks associated with market volatility when trading cryptocurrencies or tokenized assets.

1. The Role of Stablecoins in RWA

• Safe Trading Tool: When people purchase assets (such as tokenized real estate or bonds) through RWA, using stablecoins for transactions means that both parties do not have to worry about sudden market price changes, making the transaction more stable and secure.
• Increased Liquidity: Stablecoins can help RWA tokens be bought and sold more easily. Since stablecoins are easy to trade, investors can quickly buy or sell RWA tokens with stablecoins, facilitating the flow of funds in the market.
• Convenient Cross-Border Transactions: With stablecoins, investors can easily conduct international transactions, avoiding the complexities and high fees of bank transfers, and funds can reach their destination faster.

1. How Stablecoins Help RWA Projects

• Maintaining Transaction Stability: When using stablecoins to purchase RWA assets, investors do not have to worry about sudden price changes, allowing the transaction amount to remain constant, which makes investing simpler and more reliable.
• Increasing Investor Confidence: Stablecoins provide investors with greater peace of mind, as they know they will not lose money due to fluctuations in the cryptocurrency market. This also attracts investors who are sensitive to market risks to participate in RWA projects.

1. Hong Kong's Support for Stablecoins

• Hong Kong's Policy: The Hong Kong government is very supportive of virtual assets, especially stablecoins, as they help RWA projects operate smoothly. By using stablecoins, RWA projects in Hong Kong can better comply with regulations and receive protection from regulatory authorities.
• Testing Environment: Hong Kong has a "stablecoin regulatory sandbox" that allows companies to test their stablecoins and RWA projects in this environment, ensuring the security of transactions.

1. Real Case: How RWA Uses Stablecoins

• Example of Real Estate Tokenization: Suppose you want to invest in a portion of a building; the project party will tokenize the building, and you can use stablecoins to purchase a part of it. This allows you to avoid using a large amount of capital to buy the entire building while avoiding the price volatility of cryptocurrencies.
• Example of Charging Station Projects: In the tokenization project of charging stations, investors use stablecoins to purchase the revenue rights tokens of the charging stations, and the project revenue is directly returned to investors through stablecoins, ensuring that returns are not affected by market fluctuations.

1. The Future of RWA and Stablecoins

• Deep Cooperation: In the future, RWA and stablecoins will be more closely integrated, with businesses and investors increasingly using stablecoins to trade tokenized assets, making transactions safer and faster.
• Global Development: As more countries and regions support stablecoins, RWA will be able to develop more rapidly on a global scale, providing investors with more opportunities to participate in various tokenized asset projects.

Summary

Stablecoins provide RWA projects with a more stable and secure trading method, helping investors reduce the risks of market volatility. By using stablecoins, cross-border transactions become more convenient, and global investors can more easily participate in RWA projects. In the future, stablecoins will continue to play an important role in the RWA market.