BlockchainRWAMiddle East
|12 min ReadStablecoins and RWA: How the Middle East Becomes the New Crypto Hub
Tariq Al-Saidi
Senior Analyst
Published
Jan 16, 2026
Alpha Briefing: Stablecoins have exploded to a roughly $250 billion market, handling trillions in payments and quietly overtaking card networks on volume. Web3 failed as a consumer revolution and instead delivered Finance 3.0: dollar stablecoins and tokenized real-world assets running on public chains. The next big battlefield is clear, with Hong Kong’s compliant stablecoin race and the Middle East emerging as a world-class RWA hub linking global capital, China and on-chain finance.
Stablecoins quietly did what a decade of “Web3” branding could not. They became the killer app of blockchain finance. While people argued about decentralization and ownership, the market voted with dollars. Those dollars moved into tokenized cash.
According to RWA data providers, the outstanding value of stablecoins has pushed past about 6.7 trillion in transaction volume. Annual stablecoin payments have already surpassed the combined volume of Visa and Mastercard. That is not a meme. That is real pipes.
Regulators and traditional finance see the same thing. One major US advisory body expects base stablecoin market cap to reach around 3.5 to $4 trillion. This is not a niche side show any more. It is becoming a parallel dollar system.
Author Nathan Ma, co-founder and chairman of DMZ Finance, argues that this is the real story. Web3 as a grand internet upgrade fizzled. What we actually built is Finance 3.0 on top of decentralized ledgers.
The Skype Moment For Money
Before apps like Skype, making an international call was painful. It was expensive. It was slow. Then a simple piece of software turned voice into data and sent it over the public internet almost for free. That first step opened the door to messaging giants, mobile payments and the entire era of internet finance.
Stablecoins are doing the same thing for cross-border money. They were born as pure trading chips on exchanges. A neutral unit between volatile coins. Then geopolitics, inflation and sanctions pressure hit. Suddenly, a dollar that could move on-chain, 24 hours a day, with no bank in the middle, looked like a very useful thing.
Traditional SWIFT transfers often take several business days. Fees can land in the 2 to 3 percent range. A stablecoin transfer rides on a public chain and settles in minutes or seconds. On Solana, an average transaction fee can be as low as $0.00025. You do not need a PhD to see the difference.
Just as internet protocols replaced legacy phone networks for communication, blockchain networks are now starting to replace legacy bank messaging for settlement. The direction is clear. The wave has only started.
Web3 Failed, Finance 3.0 Succeeded
A lot of people tried to sell Web3 as a new internet. In practice, the internet we use today still runs on classic Web2 rails. The real upgrade came somewhere else.
The big break between early internet and the social/mobile era was not fancy mission statements. It was a brutal jump in chip performance and bandwidth. That allowed search, video, payments, e-commerce, gaming and social networks to explode. Users got new applications they loved. The tech layer just made it possible.
By that standard, Web3 never delivered its own app wave. Most of what we call Web3 was infrastructure: new ledger designs, new token standards, new consensus. Useful, but invisible to the average person.
Ma’s view is blunt. If you define generations by applications, then “Web3” failed. What we did build is Finance 3.0.
Finance 1.0 is the legacy banking system. Finance 2.0 is internet finance, things like online banking, Alipay and WeChat Pay. Finance 3.0 is blockchain finance: exchanges, derivatives, leverage, credit, all reconstructed on decentralized ledgers with crypto as the medium.
In this stack, the crown jewel is not an NFT marketplace or a metaverse game. It is the humble stablecoin contract sitting on a public chain, punching a hole straight into the global payments and settlement system. The disruption is at least as powerful as trains replacing horses. Speed goes up. Cost collapses. Entire industries have to adjust.
RWA Needs Decentralized Ledgers And Centralized Assets
Finance 3.0 is not just about crypto-native tokens. It is also about dragging real-world assets onto permissionless ledgers.
At first, blockchains only carried their own coins, like BTC and ETH. Now we see tokenized stocks, tokenized treasuries, tokenized gold and even tokenized real estate. Once they live on-chain, these assets can move in real time and plug into lending, margin and DeFi. A major consultancy has projected that tokenized real-world assets could reach tens of trillions of dollars in value by the end of the decade.
Ma argues that two design choices decide who will win this RWA race.
First, ledger choice. Should RWA live on public chains or private consortium chains? His answer is clear. The ledger must be decentralized. RWA should default to public chains like Ethereum, Solana, or large exchange ecosystems like BNB Chain and Base.
He points to tokenized US Treasury products as proof. Leading treasury tokens like BUIDL from BlackRock and Securitize, BENJI from Franklin Templeton, and QCDT from QNB and DMZ Finance all issue on public chains. That is not an accident.
These tokens already serve two powerful use cases. They sit in the reserves of yield-bearing stablecoins, such as USDtb from Ethena, where they provide on-chain transparency and income. They also act as margin collateral, following the traditional model where a large share of futures margin is parked in treasuries.
We are watching the same playbook appear on-chain. OKX and Standard Chartered have launched a collateral mirroring pilot that lets institutions use tokenized money market funds like BENJI as trading collateral. Other exchanges are working on similar models. If a treasury token lives on a private or closed network, it simply cannot plug into this open collateral engine. Its impact is capped.
Second, asset choice. The assets themselves must be centralized. The more standardized the asset and the stronger the rating framework, the deeper the secondary market. Sovereign bonds and gold sit at the top. Then come equities, large bank deposits and plain-vanilla credit. Far below that you find niche things like charging piles or a specific vineyard’s grapes.
Highly fragmented, hyper-local assets do not magically gain liquidity by going on-chain. A tokenized charging pole still has a tiny buyer base. A tokenized bunch of grapes is marketing, not market structure. The sweet spot is centralized assets on decentralized rails. The network brings global reach. The asset brings trusted value.
Hong Kong’s Stablecoin War And The New Guard
With laws hardening in the US, Hong Kong and other key centers, the next phase of the stablecoin game is kicking off. The battle is no longer just USDT versus USDC. New categories are forming.
Trading stablecoins live and die on exchange support. A token like USDC gained power by sharing profits and embedding deeply with a top platform like Coinbase. Others, like FDUSD, grow when a giant such as Binance simply decides to make them the house chip.
On top of that, we now see yield-bearing stablecoins like USDe and USDtb. Their pitch is simple and strong. They share funding fees or protocol income with users, so holding the token beats sitting in cash.
Then there is the new wave of compliant payment stablecoins. These are pushed by payment giants and cross-border platforms, the likes of card networks and global e-commerce firms. They lean into existing merchant networks, often targeting business users first and retail later.
Ma notes that in Hong Kong alone, more than a hundred institutions and companies are already applying for, or preparing to apply for, stablecoin licenses. The “hundred-coin war” has begun.
The challenges are serious. Regulatory frameworks in the US and Hong Kong typically forbid compliant stablecoins from paying explicit interest to holders. That kills one of the biggest incentives to park money in the token outside of payments. Getting into major trading venues is hard. Top exchanges have limited slots and high demands.
Even in payments, breaking out is tricky. E-commerce firms tend to favor their own tokens inside their own ecosystems. It is hard to imagine one global platform willingly supporting a direct competitor’s coin at scale. The walls are high.
This is where a new layer comes in. Infrastructure firms backed by large banks are building clearing, settlement and yield-integration systems that sit between different stablecoins. Examples include Partior, incubated by MAS with partners like DBS, J.P. Morgan and ENBD, Taurus in Europe with backing from Credit Suisse and Deutsche Bank, and DMZ Finance, focused on RWA infrastructure and supported by QNB and Standard Chartered.
All three have been selected into the Qatar central bank’s QFC digital asset lab. They are treated as key players in building the next generation of stablecoin infrastructure.
The Middle East RWA Moment And China’s Link
If you want to see where RWA can really scale, Ma argues you should look to the Gulf.
He analyzes the region on three axes: regulation, ecosystem and market.
On regulation, the groundwork is already laid. An Abu Dhabi free zone rolled out one of the world’s first comprehensive crypto asset frameworks years ago, covering exchanges, custodians and issuance. Dubai’s VARA was set up as a dedicated virtual asset regulator and later worked with the federal securities body to offer cross-emirate licensing paths. Major exchanges like Binance, OKX and Deribit now hold full VARA licenses. Others such as Bybit have temporary approvals.
Regulators have started to approve tokenized funds as well. DFSA has cleared QCDT, a tokenized money market fund domiciled in the Dubai International Financial Centre. The product is launched by QNB and DMZ Finance, with fund and token custody at Standard Chartered in Dubai. It combines the weight of two Gulf financial centers and targets global flows.
On ecosystem, the numbers speak. UAE sovereign wealth funds reportedly hold tens of billions of dollars in crypto assets. One Abu Dhabi vehicle invested around $2 billion into Binance, becoming the first sovereign fund to take a stake in a top-tier exchange. At the same time, the Middle East is spending huge sums to build one of the largest AI compute hubs outside the US.
Dubai’s DIFC is now a genuine global money hub. It hosts thousands of financial institutions and related firms, including hundreds of asset managers, dozens of hedge funds, over a hundred insurers and a very large cluster of family offices. For Chinese banks, DIFC is the main beachhead. The big five Chinese banks account for more than 30 percent of banking and capital market assets there, and many of the Chinese companies in the zone are Fortune 500 names.
On market, the region is importing high-net-worth individuals at scale. Forecasts put the UAE at the top of global millionaire inflows. Crypto penetration is expected to reach high double-digit percentages of the population, far above the global average.
Tax rules are friendly. There is no personal income tax, no capital gains tax, and corporate rates are low. Time zone overlap with Hong Kong, Singapore, mainland China, London and Switzerland is excellent. In other words, this is not just a “rich people” playground. It is a serious, globally connected, compliant capital market.
The link to China and Hong Kong is obvious. Trade volumes between mainland China, Hong Kong and the UAE are enormous. Trade with Qatar is also large. Offshore renminbi stablecoins could find their best use case here, settling a slice of that trade through licensed structures in Hong Kong and Gulf jurisdictions.
Chinese issuers can also think bigger. High-quality domestic projects can use the Middle East’s regulatory frameworks and financial center status to showcase their assets, raise capital and build brands in a way that is hard to achieve at home.
A New Map For Global Finance
Ma’s conclusion is simple and powerful. Web3 as a social dream ran into a wall. Finance 3.0 did not. Stablecoins and tokenized assets have already broken into payments, clearing and trading collateral at the core of global finance.
The core logic is clean. The ledger must be decentralized to win global trust. The assets must be centralized and standardized to carry real value. Put those together in regions that welcome capital and innovation, and you get something tremendous.
As regulation clarifies and traditional institutions move faster, the Middle East is turning into a critical junction between new financial rails and old money. Combined with deep trade and financial links to China and Hong Kong, it gives stablecoins and RWA a real-world sandbox big enough to matter.
This is the start of a new chapter in the global financial map. The stablecoin and RWA era is no longer a theory. It has already begun.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.