{"id":29208,"date":"2026-09-11T10:50:00","date_gmt":"2026-09-11T14:50:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-us\/?p=29208"},"modified":"2026-09-11T10:50:02","modified_gmt":"2026-09-11T14:50:02","slug":"beyond-stablecoins-the-tokenization-story","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insights\/beyond-stablecoins-the-tokenization-story","title":{"rendered":"Beyond stablecoins: The tokenization story"},"content":{"rendered":"\n

\n It has been just over a year since the Guiding and Establishing National\n Innovation for U.S. Stablecoins (GENIUS) Act became law. That legislation\n laid out a regulatory framework for stablecoins, or electronic tokens\n designed to maintain parity with traditional currencies. Since its\n passage, the conversation on the rules has focused on a provision\n prohibiting stablecoin issuers from paying interest.\n <\/p>\n

\n Proponents of that limitation argue that it is an important safeguard\n against possible runs on traditional banks, while opponents point out the\n negative impact on stablecoin adoption.\n <\/p>\n

\n As we argue in our recent\n special report<\/a>, however, this debate seems to us largely misplaced. Interest payments\n on stablecoins are, we believe, a tangential issue at most in terms of\n banking stability. Instead, what we think is revolutionary about\n stablecoins is the launch of a tokenized version of a mainstream asset.\n That, we think, is where investors need to focus their attention, not on\n the minutiae of interest paying policy.\n <\/p>\n \n

Stablecoins: From niche tool to $300 billion market<\/h2>\n

\n Stablecoins began as a liquidity and temporary holding vehicle for\n cryptocurrency investors. The purpose of the coin was merely to hold its\n value, so investors could stay in the crypto ecosystem and not have to\n return to standard banks. The promise was that a dollar stablecoin would\n maintain a one-to-one valuation with the real-world dollar, a condition\n known as parity.\n <\/p>\n

\n Despite a few well-publicized failures, money continued to flow into\n stablecoins, with the asset class growing from approximately $5 billion in\n 2019 to nearly $300 billion today. That growth drew regulatory attention,\n culminating in the GENIUS Act.\n <\/p>\n

\n The Act includes a series of requirements for stablecoins, including\n pre-approval of issuers, a strict one-to-one reserve requirement and a\n very restrictive list of permitted investments. Issuers are required to\n hold highly liquid, short-maturity investments with low credit risk.\n <\/p>\n \n

The interest payment debate: A distraction from what matters<\/h2>\n

\n The combination of liquidity and low credit risk makes stablecoins a\n potential competitor to traditional bank accounts. The potential for\n substitution drove the GENIUS Act\u2019s prohibition on interest payments. The\n concern was that in times of banking crisis, the existence of an\n interest-paying substitute could spark or accelerate a run by depositors.\n <\/p>\n\n

\n While the theory appears sound, there are serious practical difficulties\n with the argument:\n <\/p>\n