Stablecoins have become one of the most significant applications of tokenisation, representing a bridge between digital assets and regulated finance. The sector, valued at more than $280 billion, has been led by crypto-native issuers such as Tether and Circle, but is now drawing in regulated players who see the opportunity to combine compliance with programmability. The challenge is to design stablecoins that satisfy institutional requirements without losing the qualities that make them efficient for payments and settlement. Asia is emerging as a test bed for this transition. Japan has implemented a licensing framework for stablecoin issuers under its revised Payment Services Act, Singapore has finalised rules for single-currency stablecoins, and Hong Kong has passed its own Stablecoins Ordinance. Against this backdrop, Ripple has introduced Ripple United States Dollar (RLUSD), a stablecoin issued under a New York trust company charter and supported by reserves custodied at Bank of New York Mellon (BNY). Through its partnership with SBI, Ripple aims to bring RLUSD to the Japanese market and expand its use across Asia. From crypto-native to regulated infrastructure McDonald outlined how RLUSD is designed, how Ripple views regulatory developments, and how institutional adoption is being pursued. His remarks highlight both the opportunities and challenges facing tokenised finance. He contrasted the two approaches to stablecoins. “The difference really comes down to design and oversight. Bank-issued stablecoins can be considered extensions of the banking system—governed by strict banking safeguards like capital requirements, redemption rights and ongoing regulatory supervision,” he said. He explained that bank-issued tokens are mainly used for internal settlement, while most of the $280 billion market is driven by independent issuers. “The majority of today’s stablecoin market is comprised of independent issuers like Tether, Circle and Ripple’s RLUSD which are built for open access and programmability,” he said. Ripple USD combines both elements. “RLUSD is issued natively on XRPL and Ethereum, but under a New York trust company charter, under the banking laws of New York State. Our reserves are custodied at BNY, backed one-to-one by cash and equivalents, and attested monthly by a leading audit firm,” McDonald explained. “RLUSD combines the programmability of a crypto-native stablecoin with the compliance and security of bank-grade infrastructure”. Ripple is expanding this approach through its partnership with SBI. “We announced our new MOU with SBI VC Trade to allow RLUSD to be distributed in Japan under the new stablecoin framework. This marks an important step in expanding RLUSD’s global footprint, giving institutions and businesses a regulated and trusted option for digital payments,” McDonald said. Japan, he argued, is setting an important precedent. “Japan has taken a pioneering approach to digital asset regulation. By working with SBI, we are setting a benchmark for how stablecoins can be introduced responsibly and at scale across Asia,” he said. Use cases moving into production Stablecoins are already proving their value. “When we look at tokenised assets in production today, stablecoins are the clearest example of a real-world use case. They are no longer experimental—stablecoins are live and are delivering real utility in payments and foreign exchange (FX),” McDonald said. Ripple USD is being deployed in multiple markets. “In Singapore, we are working with MetaComp to integrate RLUSD into regulated payment flows. In Korea, BDACS is custodian for RLUSD in production, and in Japan our new MOU (memorandum of understanding) with SBI VC Trade will bring RLUSD into the market under the country’s stablecoin framework,” he explained. He stressed that these are not just trials. “These are not pilots. They are production-level deployments that show how tokenised assets can make cross-border settlement faster, cheaper and more compliant,” McDonald said The trend extends beyond payments. “Financial institutions are exploring treasuries and deposits for collateral management, liquidity and portfolio diversification—areas where custody and governance tools can reduce risk, automate reconciliations and drive new efficiencies in capital markets,” he noted. Regulatory frameworks and market standards McDonald acknowledged the complexity of divergent regimes. “When people talk about navigating divergent regimes, the real challenge is balancing global consistency with local nuances. The way we approach it is by working within clear local frameworks while aligning to global standards wherever possible,” he said. Ripple works with international standard setters. “We look to international bodies such as the Financial Stability Board and the Bank for International Settlements to drive consistency in standards and best practice, while adapting to regional nuances,” he explained. The company engages actively with regulators. “Our business and policy teams are actively engaged with regulators and rulemakers around the world to help educate and inform how legislation is being developed,” McDonald added. He pointed to Singapore as an example of innovation-friendly oversight. “We have seen this play out in Singapore, where progressive regulation has created an environment for innovation through initiatives like Project Guardian and the Global Layer One programme. The Monetary Authority of Singapore (MAS) has also finalised a regulatory framework for single-currency stablecoins, under which MAS-regulated stablecoins can be issued,” he said. Hong Kong is another important case. “We are seeing similar regulatory momentum in Hong Kong. The Stablecoins Ordinance, which came into effect in August 2025, establishes a licensing regime for fiat-referenced stablecoin issuers,” McDonald explained. He emphasised the risks of over-regulation. “Stablecoins derive their value from being globally fungible. Overly strict local issuance requirements would risk fragmenting liquidity, raising costs and undermining their usefulness. Ultimately, what moves the needle is regulatory clarity, real-world adoption and infrastructure that institutions can trust,” McDonald said. Custody, clearing and programmability Custody remains the foundation of institutional confidence. “At Ripple, our priority is instilling institutional confidence in tokenised assets, starting with custody. We believe tokenisation will not scale beyond pilots unless private keys and reserves meet bank-grade trust and compliance,” McDonald said. Ripple Custody was designed to provide this assurance. “Ripple Custody is built on robust, regulatory-compliant infrastructure trusted by leading global financial institutions. This establishes our offering as the institutional standard for secure digital asset safekeeping,” he explained. The platform covers the full lifecycle. “Through Ripple’s broader platform—spanning issuance, token lifecycle management and settlement—we are enabling institutions to manage tokenised assets across their full journey,” McDonald said. The acquisition of Hidden Road added another layer. “With the acquisition of Hidden Road, we are adding the critical prime brokerage layer: collateral management, credit intermediation and access to deep liquidity,” he explained. Ripple’s aim is to offer an integrated solution. “Ripple delivers a one-stop shop—custody, lifecycle tools, liquidity and programmability—giving institutions confidence that tokenisation can scale beyond pilots and into the real economy,” McDonald said. Risks and institutional adoption McDonald identified the biggest barrier to adoption. “One of the biggest risks in deploying tokenised platforms is global legal and regulatory uncertainty around digital assets. Institutions will not scale adoption if rules around issuance, custody and settlement remain unclear,” he explained. He pointed to encouraging signs. “The good news is, clarity is coming: in the US, the GENIUS Act is establishing a federal framework for stablecoins, while Japan has already put in place one of the most comprehensive regulatory regimes for digital assets,” McDonald said. The importance of this clarity cannot be overstated. “As more jurisdictions follow their lead, legal and operational risks diminish, standards become harmonised, and institutions gain the confidence to invest in this technology. Regulation is the unlock—it transforms tokenisation from pilot projects into a foundation for mainstream finance,” he said. Education is also essential. “Institutional adoption of tokenised assets will not happen through technology alone—it requires education, trusted partners and regulatory alignment. In Asia Pacific, we are working closely with banks, corporates and market infrastructures to build that confidence,” McDonald explained. Ripple’s partnerships provide practical evidence. “Through SBI, for example, we have helped financial institutions test and scale cross-border payment flows on blockchain, setting the stage for broader tokenisation use cases. In Hong Kong and Singapore, we are collaborating with regulators and financial institutions to explore tokenised real-world assets and regulated digital custody,” he said. The global dimension reinforces this confidence. “With partners like DZ Bank and HSBC working with Ripple Custody globally, Asia Pacific clients can see that the same infrastructure they rely on elsewhere is available in their markets. By combining local regulatory engagement with hands-on pilots and a global custody and payments stack, Ripple is giving institutions the confidence to move from experimentation to scaled production,” McDonald said.
