Onigiri Weekend Digest: Institutional Lens #5

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Good weekend from Onigiri Capital!

This week, two defining moments capture the political and regulatory power struggle shaping the next phase of global stablecoin adoption.

Recap this Week's Headliners

SS #41 - China's PBoC Overrides HK Stablecoin Plans
SS #42 - Warren Demands Treasury Block Stablecoin 'Conflicts’

Both developments underscore a single truth: stablecoins are no longer a crypto issue — they are now instruments of state power in both the East and West. The Fed Fintech Meeting (Oct 21, D.C.) —also showed signals: The Fed moves from adversarial to dialogic: interoperability, “slim master accounts” for payments firms, and stablecoins as AI and tokenization plumbing.

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🍙Onigiri Take

The global stablecoin narrative has entered a monetary realpolitik phase. Beijing’s intervention in Hong Kong signals that sovereign currencies cannot coexist with private money, especially when monetary control is strategic. Meanwhile, Washington’s political wrangling shows that stablecoins have crossed the Rubicon into statecraft, no longer viewed as neutral financial tools.

• China’s move reinforces the dominance of the e-CNY and effectively ends hopes for an offshore CNH stablecoin regime, isolating Hong Kong’s ambitions.

• Warren’s demands expand U.S. oversight from compliance to integrity of governance, establishing a precedent where who backs a stablecoin is as important as how it operates.

For institutional allocators, the message is clear: The new moat is compliance credibility. The winners of this cycle will not be the most innovative issuers — but those who can navigate political legitimacy and regulatory proximity.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: State Control, Regulatory Capture, and the Future of “Permissioned” Stablecoins

1. Beijing’s Command over Capital Mobility
   Hong Kong’s experiment with a CNH-pegged stablecoin has been halted. The PBoC’s directive to Ant Group and JD.com isn’t merely about monetary control — it’s about data control. 
   
   A successful offshore CNH stablecoin would have generated non-state transaction data, effectively creating a shadow payment system parallel to the e-CNY. Now, Beijing’s stance aligns its Digital Currency Electronic Payment (DCEP) strategy with capital account containment, ensuring RMB internationalization remains state-managed, not market-driven.

2. Washington’s Political Oversight Phase
   Warren’s pressure campaign against the Treasury stems from the GENIUS Act’s unintended ambiguities — particularly around conflicts of interest and operational governance. The reference to the World Liberty Financial USD stablecoin and Trump-linked backers underscores a deeper fear: that private issuers could wield political leverage through monetary rails.

The Structural Divergence

• China’s model: Centralized CBDC dominance, zero tolerance for private fiat proxies.

• U.S. model: Private-public co-regulation, but with political gatekeeping at the Treasury level.
  The result is a bifurcated stablecoin world — one shaped by state monopoly (East) and political legitimacy (West).

🍙Stablecoin ≠ Crypto — From Open Networks to State-Vetted Money Rails

Stablecoins were once the crypto industry’s Trojan horse into mainstream finance. They are now becoming the state’s firewall against uncontrolled liquidity. The reclassification is underway — stablecoins are no longer “crypto assets,” but regulated financial instruments with sovereign implications.

This shift creates a new design frontier:

• Permissioned interoperability layers bridging compliant stablecoins with DeFi rails.

• Tokenized bank money replacing synthetic stablecoins as the preferred institutional format.

• RegTech-native architecture, where transaction-level attestations replace “proof of reserves.”

The distinction between “crypto” and “digital money” will define institutional adoption. Stablecoins that look like bank deposits will survive. Those that look like tokens will not.

🍙Institutional Risks & Unknowns

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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