Stablecoins, once a digital asset circulating only in the crypto world, are rapidly penetrating various corners of traditional finance. Data shows that by 2025, the total market value of stablecoins will exceed $250 billion, with on-chain annual transaction volumes reaching as high as $36.3 trillion! Recently, Hong Kong has witnessed a financial transformation: the world's first stablecoin application in the insurance industry was successfully launched at a conference in Hong Kong. This means that in the future, customers will be able to pay premiums and receive claims in stablecoins, and even achieve the tokenization of insurance assets as RWA (real-world assets). This transformation not only reshapes the cross-border payment ecosystem but also quietly changes the rules of the game in the insurance industry, signaling that the RWA transformation of trillion-dollar policy assets is about to ignite a new financial era.
- Stablecoins: From the Margins of Crypto to Mainstream Financial Infrastructure
Stablecoins, as the name suggests, are cryptocurrencies that aim for value stability, pegged to assets like the US dollar, euro, or gold, with price fluctuations typically controlled within ±0.5%. The core goal is to maintain price stability through specific mechanisms, addressing the significant price volatility issues of native cryptocurrencies like Bitcoin.
Policy Push: From the passage of the GENIUS Act by the US Senate to the implementation of the Stablecoin Regulation in Hong Kong on August 1, 2025, and the strategic moves by internet giants like JD.com and Ant Group, stablecoins are moving from the periphery of cryptocurrency to the mainstream.
Market Size: By 2025, the total market value of stablecoins will exceed $250 billion, with on-chain annual transaction volumes reaching $36.3 trillion.
Institutional Dominance: Stablecoin trading is primarily led by large institutions or enterprises, with individual user-initiated transactions no longer dominating the volume. Global payment giants like Visa, Mastercard, PayPal, and Ant Group, along with numerous cross-border payment companies, are actively participating in the development of global stablecoin payments.
- The World's First Stablecoin Application in Hong Kong's Insurance Industry: RWA Transformation of Trillion-Dollar Policy Assets
On August 15, 2025, the launch conference for the digital transaction platform ecosystem in Hong Kong's insurance industry and the global first stablecoin application in the insurance sector was held at the Ritz-Carlton Hotel in Hong Kong.
Milestone Event: The conference announced the world's first stablecoin application in Hong Kong's insurance industry. Relevant parties even signed a comprehensive strategic cooperation agreement to jointly build a digital transaction platform for insurance based on stablecoin technology, achieving full-process digitization of cross-border premium payments and claims settlements.
Reshaping Cross-Border Payments: This transformation aims to enhance the efficiency of cross-border payments, reduce exchange rate risks, and promote the digital transformation of the insurance industry. Traditional bank cross-border payment fees range from 6% to 14%, but transferring with stablecoins costs less than $1 and arrives within 2 minutes. This means that transaction fees for payments made with stablecoins can be reduced by 80%-90%, and the arrival time is shortened from several days to just a few minutes.
RWA Transformation of Insurance Assets: Its essence is to tokenize physical assets (such as bonds, real estate, and commodities) through blockchain technology, making them tradable, divisible, and combinable on-chain, thus bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi).
"Sleeping Policies Become On-Chain Income-Generating Assets": Previously, if a policyholder needed money urgently, they would have to partially withdraw or even fully surrender their policy, resulting in a loss of part or all of the cash value, and possibly incurring a loss. In the future, the cash value of insurance policies can be converted into stablecoins through blockchain technology, enhancing liquidity, allowing customers to flexibly withdraw funds without having to surrender their policies.
Closed-Loop Ecosystem: Under the conduit role of stablecoins, Hong Kong is building a closed-loop ecosystem of "insurance issuance → asset tokenization → stablecoin circulation."
- Hong Kong's Regulatory Attitude: Support from Xu Zhengyu, but Caution Against Risks
Xu Zhengyu, Secretary for Financial Services and the Treasury, stated in the wireless news program "Clarifying Matters" that digital assets are an inevitable trend, and Hong Kong must prepare in advance to ensure its position and maintain its status as an international financial center.
Regulatory Principles: He emphasized that these digital assets and related services will be regulated, including requiring issuers to have relevant reserves to ensure users can redeem within one working day, and that the value must be equivalent to the relevant fiat currency. If problems are discovered, authorities have the right to intervene and inspect at any time.
Not a Wealth Tool: Xu Zhengyu stressed that digital assets are not wealth tools but rather financial development tools that will help the real economy increase its applications.
Caution Against Fraud: On August 18, Ye Zhiheng, Executive Director of the Intermediaries Division of the Hong Kong Securities and Futures Commission, warned that the introduction of the new stablecoin regulatory framework in Hong Kong could open the door to an increase in fraudulent activities. He noted that some companies merely announcing plans to apply for stablecoin licenses saw their stock prices rise, regardless of whether they met regulatory standards. The Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority (HKMA) issued a joint statement warning that they are closely monitoring suspicious trading activities and will crack down on manipulative behavior.
- Global Regulatory Landscape: A Tale of Two Extremes
Hong Kong and Singapore: Emphasizing strict regulation to prevent excessive speculation and protect retail investors from the growing risks associated with digital assets. The Hong Kong Securities and Futures Commission also released immediate guidance on custody practices, which includes a controversial ban on the use of smart contracts in cold wallets.
United States: In contrast to Hong Kong and Singapore, the US Securities and Exchange Commission has launched a new initiative called "Project Crypto," which passionately outlines a future blueprint for crypto in the US, sending strong positive signals.
Conclusion:
The global first application of stablecoins in Hong Kong's insurance industry marks a key step in the deep integration of digital assets and traditional finance. This will not only significantly enhance the efficiency of cross-border payments but also open a new chapter in the RWA transformation of trillion-dollar policy assets. Hong Kong is solidifying its position as an international digital finance center through its forward-looking regulatory framework and active pilot programs. However, alongside financial innovation, regulatory agencies remain highly vigilant against fraud and excessive speculation. Whether Hong Kong can lead this digital financial transformation while ensuring safety is a matter of global attention.
Related Reading: A subsidiary of China Merchants Bank launches a cryptocurrency exchange in Hong Kong.
Original Article: “Can Stablecoins Pay for Hong Kong Insurance? The World's First Implementation”
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