Wangdao Bank Director Warns: Stablecoins May Trigger a "Catastrophic Tsunami" in Taiwan's Finance, Is RWA and Ethereum the Only Way Out?

Lin Kunzheng, a director of Wangdao Bank, recently wrote that U.S. President Trump's GENIUS Act is more lethal than the high-profile equivalent tariffs, extending the dollar's hegemony into the virtual world and potentially triggering a "stablecoin tsunami" that could impact the foundation of Taiwan's financial industry. He warned that if Taiwan's banking sector fails to transform in time, it will face severe risks of being replaced in its core role and capital outflows.

"The Genius Act": The "Backhand Move" of the Dollar Penetrating the Virtual World

Lin Kunzheng analyzes that Trump's tariff war is a first move that shakes the global trade system; while the "Genius Act" is a response strategy aimed at channeling the demand for U.S. bonds through dollar stablecoins, sending the lifeline of the dollar into the digital universe.

The bill requires:

1. All USD stablecoins regulated by the United States must have a 1:1 full reserve (USD cash/deposits, U.S. Treasury bills maturing within 93 days, and qualified repurchase agreements).

2. Monthly public reserve report

3. Issuers are prohibited from directly paying interest to holders.

This means that the United States has established a huge "Treasury bond reservoir" in the virtual space. Even if central banks of various countries reduce their holdings of Treasury bonds, funds will still flow into the dollar system through stablecoins.

stablecoin vs SWIFT: Maglev trains replacing carriages

Currently, cross-border payments rely on the SWIFT system, which has a complicated process and high costs; USD stablecoins have the advantages of instant settlement, low fees, and automatic cross-border clearing.

Lin Kunjeng pointed out that for Taiwanese exporters, this is a simple multiple-choice question: when the CFO discovers that stablecoins can complete payments faster, safer, and cheaper, the funds will sooner or later shift to support platforms that use stablecoins.

The problem is that if Taiwanese banks cannot provide this "maglev track", funds will flow directly to overseas compliant platforms, and the banks' bridging role in USD transactions will be gradually replaced.

The Battle for Funds Between Non-Interest Stablecoins and RWA

Due to the Genius Act prohibiting stablecoin issuers from paying interest, businesses holding large amounts of "non-interest dollar tokens" are equivalent to idle funds. This will encourage the shift of capital to:

Return Bank: Exchange stablecoin for interest-bearing deposits

Invest in RWA: Purchase tokenized US Treasury bonds, funds, notes, and other income-generating assets.

Lin Kunzheng believes that RWA will become a key weapon for banks to retain funds. The Financial Supervisory Commission has promoted several banks to conduct RWA concept verification and is considering establishing a single tokenization platform, which is a commendable starting point.

Taiwan's Financial Industry Breakthrough Roadmap

Lin Kunzheng proposed four major strategies to assist Taiwan's banking industry in finding a way out amidst the stablecoin wave:

Digital Port: Create a proprietary stablecoin exchange and settlement platform, utilizing public chains such as Ethereum as the infrastructure for global trade and investment.

Regulatory mindset: Treat payment stablecoins as "payment tools" rather than "virtual assets", to enhance trust similar to electronic payments.

Business Transformation: Shifting from collection and payment services to issuing and selling digital financial products, allowing stablecoins to be converted into income-generating assets.

Technical foundation: Invest in blockchain infrastructure to support automated clearing, asset tokenization, and cross-border lending.

New Financial Order in the Trifecta Pattern

Lin Kunjeng predicts that the future of digital finance will form a "three-way division of the world":

Stablecoin: The backbone of payments and transactions

Bitcoin: Digital gold, a tool for value preservation and inflation resistance

Ethereum: The underlying layer of RWA and smart contract applications

In addition, CBDC and other public chains will also join the fray, forcing the financial systems of various countries to continuously adjust their strategies.

Conclusion

Lin Kun stated frankly that for Taiwan's financial sector, the wave of stablecoins is not a distant storm, but a tsunami that is approaching. If stablecoins are seen as a revolution in thinking, RWA as new blood, and Ethereum as the global map, Taiwan's finance may still find a blue ocean route in this changing situation; otherwise, it will become a marginal supporting role on the global digital financial stage.