Onigiri Weekend Digest: Institutional Lens #15

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Happy New Year from Onigiri Capital and welcome to the first Stablescope Weekend Edition of 2026! We begin the year not with incremental headlines, but with a structural inflection in how money itself is designed, distributed, and competed over.

Recap this Week's Headliners

SS #61 - China Transforms Digital Yuan Into Interest Bearing Deposit Currency
SS #62 - The Great Stablecoin Yield Gap and the Rise of China’s Digital Yuan

As China converts the digital yuan (e-CNY) into an interest-bearing deposit currency, and the U.S. simultaneously reinforces a no-yield stance on regulated stablecoins, the global monetary system is quietly splitting along incentive lines. Yield—once a by-product of banking or DeFi—is now a strategic lever of statecraft.

These two headlines are not isolated developments. Together, they mark the opening chapter of a new contest: who can offer the most compelling form of digital money without surrendering control.

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🍙Onigiri Take

For years, CBDCs were framed as neutral payment utilities—safe, programmable, but economically sterile. China has now decisively rejected that model. By embedding interest directly into the e-CNY and extending deposit insurance, the People’s Bank of China is repositioning sovereign digital money as a competitive savings and settlement instrument, not merely a payments rail.

In parallel, U.S. policymakers—via the GENIUS Act—are constraining stablecoins from offering yield, prioritizing deposit stability over digital competitiveness. The result is a widening stablecoin yield gap that has real implications for capital allocation, trade settlement, and treasury behavior.

This is not a crypto-versus-fiat debate. It is a question of which monetary systems reward participation—and which rely on inertia.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: From Utility to Incentive—The e-CNY Pivot

China’s overhaul allows commercial banks to pay interest on e-CNY balances from January 1, 2026, bringing wallets under the national deposit insurance umbrella. This reframes the CBDC from “digital cash” into a digital deposit, integrating it into bank balance sheets while keeping non-bank payment institutions on 100% reserves. This unlocks:

• Balance-sheet integration for banks

• Incentive-driven retail adoption

• Viable cross-border settlement pilots

Despite US$2.38 trillion in cumulative transactions by late 2025, adoption lagged behind private platforms such as Alipay and WeChat Pay. Interest removes the opportunity cost of holding e-CNY and arms banks with a powerful acquisition lever.

Next, expect aggressive retail campaigns and expanded cross-border pilots—particularly with Singapore and the United Arab Emirates—to test international settlement at scale. For the People’s Bank of China, this is a calibrated move: adoption through incentives, control through permissioning.

The Great Stablecoin Yield Gap: Policy Meets Competition

In contrast, U.S. policy under the GENIUS Act prohibits stablecoin issuers from paying direct interest. Industry leaders—including Coinbase—argue this handicaps the dollar in a world where users can earn yield on CBDCs or offshore alternatives.

The legislative battleground now centers on whether “rewards” or “incentives” can be legally distinguished from interest. Banks warn of deposit flight; crypto advocates warn of strategic erosion. This is no longer a domestic regulatory skirmish—it is about global settlement preference.

🍙Stablecoin ≠ Crypto — Sovereign Yield vs. Open Liquidity

Stablecoins are not speculative assets; they are monetary infrastructure. The comparison is therefore not crypto-to-crypto, but sovereign yield-bearing money vs. privately issued, non-yielding settlement tokens. China’s approach internalizes yield within a state-controlled system. The U.S. approach externalizes yield to banks, leaving stablecoins functionally inferior for savings and treasury use.

The result is a bifurcation:

• CBDCs optimize for control, incentives, and policy transmission.

• Stablecoins optimize for openness, interoperability, and global liquidity—but only if value propositions are allowed to compete.

🍙Institutional Risks & Unknowns

Despite regulatory momentum, several uncertainties remain:

1. Capital Controls & Permissioning: Yield may accelerate adoption, but constraints limit global scalability and composability.

2. Regulatory Arbitrage: Users may migrate to offshore yield products, undermining onshore safeguards.

3. Dollar Primacy Risk: Prolonged yield asymmetry could shift settlement behavior at the margins.

4. Bank–Stablecoin Tension: Protecting deposits today may cost innovation tomorrow.

5. Geopolitical Fragmentation: Competing monetary stacks reduce interoperability and increase friction.

Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.