Morgan Stanley(US:MS)2025-06-23 02:30Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report discusses the implications of stablecoins and the internationalization of the RMB, emphasizing the long-term strategies being implemented by the People's Bank of China (PBoC) to enhance the RMB's global presence [17][21] - It highlights the increasing dominance of USD-pegged stablecoins in the market, which has led to a rise in demand for US treasuries [23][24] Summary by Sections Stablecoins and RMB Internationalization - The PBoC is focusing on enhancing financial infrastructure and services in Shanghai to facilitate RMB internationalization [18] - New financial measures include promoting offshore RMB-denominated bond issuance and optimizing cross-border trade and investment [19] Market Dynamics - The stablecoin market is experiencing significant growth, with over USD 120 billion backed by US T-bills, indicating a strong reliance on USD [24] - The total transaction volume of stablecoins has been rising, with a notable increase compared to traditional payment systems like Visa and MasterCard [22] Regulatory Developments - The Hong Kong Stablecoins Bill is set to take effect on August 1, 2025, establishing a regulatory framework for stablecoin issuers [20] - The report outlines the licensing requirements and operational standards for stablecoin issuers in both Hong Kong and the US [20] RMB's Global Position - The share of RMB in global foreign exchange reserves has decreased from 2.84% in Q1 2022 to 2.18% in Q4 2024, indicating challenges in its international acceptance [31] - The establishment of a Digital Yuan International Operations Center in Shanghai aims to expand the RMB's global reach [29]