Author: Max.S

On February 6, the People's Bank of China, together with eight other ministries, issued the "Notice on Preventing and Handling Risks of Virtual Currencies and RWA Tokenization" (Document No. 42). This document not only reiterated the ban on virtual currencies but also, for the first time, explicitly included "RWA (Real-World Asset) tokenization" in the category of illegal financial activities, strictly prohibiting domestic institutions from conducting such business. Suddenly, the exploration of RWA in the mainland market seemed to have been brought to a halt.

However, just four days later, on February 10, at the “2026 Asia Crypto Finance High-Level Closed-Door Forum” held in Hong Kong, FinChain, a subsidiary of Fosun Wealth Holdings, announced a deep strategic partnership with Avalanche and officially launched FUSD, an interest-bearing stablecoin based on compliant Asian assets.

On one side are the high "walls" erected by the mainland, and on the other side are the "bridges" built by Hong Kong. This vivid "tale of two cities" narrative reveals the true picture of Asian digital finance in 2026: in the gaps of compliance, traditional institutions are trying to complete a liquidity revolution of tens of trillions of dormant assets through a combination of "offshore + technology".

Saying Goodbye to the "Interest-Free Era": The Generational Leap of Institutional Stablecoins

Over the past five years, the stablecoin market has been dominated by USDT and USDC. While they solved the problem of a "medium of exchange," they left a major pain point—wasted capital efficiency. With the Federal Reserve keeping interest rates high, holding traditional stablecoins means giving up a 4%-5% annualized risk-free return, which is an unacceptable "cash drag" for savvy institutional investors.

Today, in 2026, the market has undergone a generational leap. What we see is no longer a simple "fiat currency mapping," but rather "asset encapsulation."

Taking FinChain's FUSD issuance on Avalanche as an example, it represents a typical architecture of the next generation of "yield-bearing stablecoins." Rather than a token, it's more accurate to describe it as a tokenized money market fund (MMF) with T+0 settlement capabilities. Its underlying assets are directly linked to government bonds and short-term notes managed by top institutions such as BlackRock (BNY Mellon), China Asset Management (Hong Kong), and Taikang Asset Management.

The brilliance of this design lies in the fact that it doesn't create new assets, but rather liberates the liquidity of existing assets. For family offices and private equity funds, funds no longer need to choose between an "interest-bearing bank account" and a "liquid on-chain wallet." Through FUSD, a single fund can simultaneously enjoy the yield of off-chain government bonds and the composability of on-chain DeFi.

The profound meaning of technology selection: Why Avalanche?

In Fosun's case, not only are the asset choices intriguing, but the technological approach is also quite significant.

FinChain did not choose the Ethereum mainnet, which has the most abundant liquidity but is also congested, but instead chose Avalanche as its launch platform.

This is no coincidence. As RWA moves from the "experimental field" to the "deep water zone," the institution's requirements for infrastructure have shifted from simply "decentralization" to "determinism."

Avalanche's subnet architecture and C-Chain's sub-second finality precisely address the most sensitive nerve for institutions—settlement risk. In traditional cross-border payments, the T+2 settlement cycle means two days of exchange rate exposure and counterparty risk; while on Avalanche, FUSD settlement is compressed to the sub-second level.

As FinChain CEO Zhao Chen stated, "What we want to build is not just a token, but a standardized financial asset track." On this track, Avalanche provides not only speed, but also "compliance Lego" capabilities that meet regulatory requirements—such as KYC/AML (anti-money laundering) screening natively integrated on-chain, which is difficult for traditional DeFi protocols to achieve.

The "dual-track" regulatory system: risk isolation and offshore prosperity

Returning to the regulatory "tale of two cities" mentioned at the beginning of the article, the latest "Document No. 42" in mainland China and the first batch of "stablecoin issuer licenses" to be issued by the Hong Kong Monetary Authority in the first quarter of 2026, seemingly contradictory, actually form a subtle complementarity.

The strict ban in mainland China is essentially a physical isolation of financial risks. Without regulation, RWA tokenization could easily evolve into illegal asset securitization or a Ponzi scheme, posing a significant risk in the mainland market with its large retail investor base.

Hong Kong, on the other hand, has been given the roles of "regulatory sandbox" and "offshore transit point".

Fosun's FUSD actually provides a perfect example for observation: capital with a mainland background, utilizing Hong Kong's legal framework, issues assets on overseas public chains, ultimately serving global liquidity.

This model effectively cuts off the path of risk transmission to the mainland while preserving the opportunity for Chinese institutions to participate in global digital asset pricing. Not only Fosun, but also Toyota Blockchain Labs and Sumitomo Mitsui Banking Corporation (SMBC) in Japan, and Woori Bank in South Korea, are adopting similar strategies—deploying RWA (Real-World Asset Management) in offshore or controlled environments using high-performance chains such as Avalanche.

New considerations for systemic risk

Of course, as professional financial practitioners, we cannot only look at one side of the coin. As RWA assets like FUSD expand in size, new financial stability issues emerge.

When billions or even tens of billions of dollars of traditional financial assets (government bonds, bills) are mapped onto a blockchain that trades 24/7, liquidity mismatch becomes the biggest hidden danger. On-chain markets are available 24/7 with instant settlement, while off-chain bond markets still follow business days and T+1 settlement.

In the event of a large-scale on-chain run, can off-chain assets be readily converted into fiat currency through weekends or holidays? This is a "stress test" question that all RWA issuers must answer. Future regulatory focus will inevitably shift from simple "licenses" to comprehensive oversight of issuers' underlying asset liquidity management capabilities.

Looking back from the early spring of 2026, RWA is no longer a game for Web3 natives to amuse themselves, but an ark for the self-redemption of traditional finance (TradFi).

Fosun's move on Avalanche is just a microcosm of this massive migration. It signifies that Asian institutional funds are shifting from "observers" to "builders." While regulatory walls remain high, bridges like FUSD have been erected. For financial professionals, understanding the structure of this bridge may be key to understanding asset flows in the next decade.

In this transformation, only those who understand both Wall Street rules and blockchain code will be able to truly capture the alpha of the times.