Onigiri Weekend Digest: Institutional Lens #17

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Good weekend, and welcome to this week’s Stablescope. 

As global markets settle into a post-hype phase for digital assets, regulators are no longer asking whether stablecoins matter—but how they should be constrained, classified, and supervised as part of the financial system.

Recap this Week's Headliners

SS #65 – Dubai Sets a New Gold Standard for Stablecoins
SS #66 – Thailand Targets USDT Grey Money Flows

This week’s signals from Dubai and Thailand illustrate the same structural shift from different angles. One jurisdiction is narrowing definitions to create institutional-grade certainty; the other is tightening surveillance to protect monetary sovereignty. Together, they mark a clear transition: stablecoins are now being treated as financial infrastructure, not peripheral crypto instruments.

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🍙Onigiri Take

Dubai and Thailand are converging on a single conclusion through different regulatory paths: not all stablecoins are created equal, and only a subset will be permitted to behave like money.

Dubai’s move is definitional and structural. By sharply restricting what qualifies as a “fiat crypto token,” the Dubai Financial Services Authority is anchoring stablecoins to traditional concepts of cash equivalence—same-currency reserves, high-quality liquidity, and full transparency. This is a deliberate trade-off: sacrificing breadth of innovation to unlock institutional and corporate adoption at scale.

Thailand’s move is supervisory and defensive. The Bank of Thailand is responding to USDT’s real-world usage as an informal FX and settlement rail. By monitoring and constraining “grey money” flows, it is acknowledging that stablecoins already function as shadow financial infrastructure—and must therefore be governed like one.

The connective insight: Stablecoins are crossing the threshold from crypto-native tools into regulated monetary instruments. Jurisdictions are no longer competing on permissiveness, but on credibility. The winners will be those that can support stablecoins as reliable, compliant cash layers for payments, settlement, and treasury—not yield experiments or regulatory arbitrage vehicles.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: Stablecoins as Regulated Monetary Rails

Dubai’s DFSA has effectively eliminated “stability by narrative.” Only tokens backed 1:1 by high-quality, same-currency reserves now qualify as stablecoins, while assets like USDe are formally reclassified as ordinary crypto tokens. This aligns stablecoin treatment with long-standing banking principles around liquidity, redemption certainty, and currency matching.

Thailand’s approach addresses the usage layer. By folding USDT flows into a real-time monitoring framework alongside gold, cash, and e-wallets, the BOT is acknowledging that stablecoins already sit within the monetary transmission mechanism. The forthcoming transaction caps, re-verification requirements, and stricter Travel Rule enforcement signal a shift from observation to enforcement.

Forward trend: Expect global regulators to bifurcate stablecoins into two classes:

1. Recognised cash equivalents – tightly regulated, institutionally usable, low-yield.

2. Crypto instruments – higher risk, higher yield, restricted to professional or offshore contexts.

🍙Stablecoin ≠ Crypto — When Digital Cash Becomes Financial Infrastructure

The events in Dubai and Thailand underscore a critical reframing: stablecoins are no longer judged by their on-chain mechanics alone, but by their macroeconomic impact.

Once a stablecoin influences FX flows, capital controls, or corporate treasury behavior, it exits the realm of “crypto innovation” and enters monetary policy territory. At that point, regulatory tolerance gives way to systemic oversight. This is not hostility toward digital assets—it is recognition of their success.

🍙Institutional Risks & Unknowns

Despite regulatory momentum, several uncertainties remain:

1. Liquidity concentration risk: Fewer approved stablecoins may amplify single-issuer dependencies.

2. Jurisdictional fragmentation: Divergent definitions across regions could complicate cross-border operations.

3. Innovation displacement: Yield-bearing and algorithmic models may migrate to less transparent venues.

4. Operational readiness gaps: Corporates may underestimate the compliance and reporting burden tied to “approved” stablecoins.

5. Policy reflexivity: As stablecoins gain adoption, regulators may further tighten rules, altering economics mid-cycle.

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.