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CNBC
35 minutes ago
- CNBC
The global crypto wave is catching on in Asia as businesses warm up to stablecoins
Businesses across Asia are increasingly warming up to stablecoins for cross-border transactions — a trend set to accelerate further as Hong Kong moves to legalize the use of digital tokens, experts told CNBC. From online travel agencies and luxury goods resellers to high-end hotels, companies are embracing stablecoin for payments, citing both speed and cost-efficiency compared to the traditional financial system. Stablecoins are cryptocurrencies usually pegged to sovereign currencies or even gold, making them more stable compared to other crypto assets. Hong Kong's new legislation , set to take effect Friday, will formalize the framework for financial firms to issue and manage these virtual assets, similar to the U.S. GENIUS Act . Cryptocurrency wallet platforms allow customers to pay via digital currencies, which are then converted into stablecoins or local fiat currencies while being credited to merchants, minimizing price volatility and settlement risk for businesses, according to several crypto industry veterans and business owners. Monthly stablecoin transaction volumes between businesses had surged to more than $3 billion by early 2025, from under $100 million at the start of 2023, according to a report by blockchain analytics firm Artemis from May. The report was based on a survey of 31 stablecoin-based payment firms that process transactions on behalf of end users globally. Unlike conventional cross-border bank transfers that can take several days and incur steep processing fees, stablecoin transactions are nearly instantaneous and substantially cheaper, experts pointed out. "What blockchain is able do is to facilitate transactions between parties with less counterparty risks," said Ben El-Baz, managing director at cryptocurrency exchange Hashkey Global. Blockchain is a technology used for keeping account of crypto transactions. "For cross-border payments, instead of having to go from originating bank to intermediary to correspondent bank, then down to the beneficiary ... stablecoins transferred via blockchain are basically an exchange of value that happens instantaneously," he added. That has attracted the interest of major payment processors such as Visa , Mastercard , and Stripe , all of which have begun integrating stablecoin support into their payment infrastructure. The momentum has been further fueled by the regulatory development in the U.S. in the past two months. The listing of USD Coin-issuer Circle in June along with President Donald Trump's GENIUS Act have sparked broader interest in digital payments across Asia. "Stablecoin has surely emerged as a supplementary currency to the conventional fiat currencies," said Alice Liu, founder and CEO of dtcpay. The Singapore-based fintech company helps clients process stablecoin payments and convert them into fiat currencies. Dtcpay's clients include Chinese businesses with legal entities in Singapore and Hong Kong to settle stablecoin payments into preferred currencies, often U.S. dollar, Singapore dollar or Chinese offshore yuan. Travel, luxury handbags, high-end hotel Singapore-based travel agency Wetrip, which specializes in organizing group tours to China, began accepting stablecoin payments in June. It accepts them via digital wallets such as the one offered by the world's top crypto exchange, Coinbase, lured by faster settlement and significant cost savings. "The lengthy processing period and hefty transaction fees with traditional banking network were real pain points," Vincent Xue, the company's founder and CEO, told CNBC. He added that if his suppliers were to start accepting stablecoin, he would not need to convert them back into local fiat money, allowing his entire payment stack to operate fully on blockchain. Global stablecoin payment volumes hit $94.2 billion over the two years ending February, with business-to-business transactions accounting for one third of the flows, according to Artemis. Stablecoin payments by consumers directly to businesses are also on the rise, climbing to over $300 million a month early this year from just $50 million in early 2023. Singapore and Hong Kong were among the top three markets for stablecoin flows, just following the U.S. The Singapore-China route, in particular, emerged as the busiest for stablecoin flows, the report said, while the next seven largest corridors all involved the U.S. Among retailers, many luxury businesses are embracing blockchain payments, with more high-end brands adopting stablecoin-to-fiat transactions for high-value purchases, citing speed, higher upper limits on transaction value as key advantages. Capella Hotel, a Singapore-based high-end hotel group, started allowing guests to complete transactions using digital currencies in October last year, due to "growing demand [for] secure and convenient payment option," according to its statement. Ginza Xiaoma, a specialist collector and reseller for Hermes Birkin handbags, began accepting stablecoin payments in Singapore earlier this year, as several local customers requested to pay in cryptocurrencies. The boutique handbag reseller is eyeing to expand crypto payments in its Hong Kong branch in the coming months, as well as in its Tokyo branch in the next few years. "More payment options mean a higher chance of sealing the deal," Qian Zhou, director of sales at Ginza Xiaoma, told CNBC. Zhou's outlet mostly sells to customers in Singapore, Hong Kong, the U.S. and Europe. About 3% of the company's transactions are currently settled in stablecoins — a share that could climb to as much as 20% by year-end, Zhou estimates, translating into half a million Singapore dollars ($387, 512) in monthly revenue. Beijing's testbed for stablecoin Chinese government has traditionally imposed stringent restrictions on crypto activity, citing concerns over financial stability, fraud and capital flight. Signaling a shift in policy direction, Shanghai government in July convened a work group, vowing to deepen their understanding of how to use blockchain technology in cross-border trades. While Beijing sticks to a conservative stance in mainland China, Hong Kong, as a special administrative region of the country, has emerged as a regulatory sandbox for Beijing with the aim of preserving its global edge in financial innovation. A slew of mainland-listed fintech companies recently announced plans related to stablecoin usage. Shenzhen-listed Yusys Technologies said in July that it is exploring real-world applications for introducing stablecoin payments into everyday retail scenes. Both and Ant Financial have plans to issue stablecoin backed by the Hong Kong dollar , after the new legislation takes effects Friday. "As more regulatory clarity comes out around stable coins. The ability of stable coin payment networks replacing SWIFT-based payment networks is very high," said Hashkey's El-Baz. SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunications , is the dominant network for international money transfers. "We're really just on the cusp of this," he added.
CNBC
an hour ago
- CNBC
Another late-night Trump trade twist — just hours before the world hit go
Another day, another deadline and another trade curveball from U.S. President Donald Trump just before the buzzer. The tariff deadline was set for August 1. Markets were watching. Countries were calculating. And then, right before midnight, came another announcement: 40% tariffs on transshipped goods, new rates for dozens of nations, and yet another reshuffling of Trump's trade playbook. All set to begin next week. If this feels familiar, it's because it is. We've seen this before. In April, Trump stunned global markets with a blanket 10% tariff hike, followed by a pause, and then a partial reinstatement. The July 9 restart was delayed at the last minute and pushed to August 1. Each time, businesses scrambled. Leaders called Washington. Trade lawyers worked overtime. But the element of surprise remained. This isn't just erratic policymaking. It's a signature Trump move. His leadership style mixes showmanship, brinkmanship, and a firm belief in the power of unpredictability. Announcements often come via social media. Deadlines shift. Pressure builds. And when the world thinks the playbook is set, Trump throws in one more twist. It's the Art of the Deal, reimagined for geopolitics. And while the tactics may appear chaotic, they've produced results — at least by Trump's standards. The U.S.-Mexico-Canada Agreement (USMCA) is a prime example. Trump repeatedly threatened to scrap the North American Free Trade Agreement (NAFTA) unless Canada and Mexico agreed to stricter terms. After months of tense, down-to-the-wire talks and even a few midnight calls, the deal was signed. It came with tougher rules on automotive content, labor, and digital trade. Just days before implementing sweeping "Liberation Day" tariffs, Trump announced a headline-grabbing agreement with the U.K., calling it a "very big and exciting day." The message was clear: act fast or face tariffs. Stephen Olson, Senior Visiting Fellow at ISEAS – Yuosf Ishak Institute and former U.S. trade negotiator, told CNBC this week that Trump has "fundamentally rewritten the rules of global trade." Olson further added that with the U.S. stepping away from the very free trade system it once built and led, it's unclear whether that system can still hold together. "Don't assume this is the end of the story. Trump regards this as an ongoing reality show. More 'deals' or further tariff increases are almost certain to follow. While we haven't returned entirely to a 'law of the jungle' system, we have taken several huge strides back in that direction." This week's moves feels like it's cut from the same cloth. Countries like Thailand and Malaysia saw their rates adjusted at the last moment, while others, such as Canada, were hit harder. Even neutral Switzerland wasn't spared, slapped with a steep 39% tariff despite no major bilateral tension. The timing of the 40% penalty on transshipped goods is notable, given that the U.S. and China are currently negotiating a trade deal. But diplomacy-by-disruption carries costs. Global markets are jittery. CEOs across industries — from autos to semiconductors — are now building uncertainty into their forecasts. Investors dislike surprises and supply chains don't pivot that fast. There's a broader question here: Can a global economy function if one of its most influential players changes the rules at night? For companies and countries alike, Trump's late-night decisions have become a variable of their own. It's not just what he says. It's also when he says it. "The high rates on some countries which have not reached a deal with Trump yet are indeed mostly part of Trump's scare tactics. I expect many of them to be reduced after negotiations. Trump's deadlines are very flexible, after all," Holger Schmieding, chief economist at Berenberg, told CNBC on Friday. So, here we are again. Another Trump tariff deadline, another late-night curveball. Companies, countries, and investors are left to adjust on the fly, with little time and even less clarity. It's not the first time and it may not be the last.
Yahoo
an hour ago
- Yahoo
Fed holds interest rates steady, resisting pressure from Trump
The Federal Reserve left interest rates unchanged for a fifth straight meeting, with policymakers stuck in a prolonged wait-and-see mode as President Donald Trump's tariffs leave them wary of cutting borrowing costs too soon. The decision means the key interest rates that Americans pay to finance anything from a car to a home renovation will stay steady. Meanwhile, savers who've parked their cash in a high-yield savings account will continue benefiting from inflation-beating returns — and yields holding at levels previously not seen for over a decade. Behind the decision, however, is a growing divide over how the Fed should steer the economy. For the first time since 1993, two Fed governors dissented against the rest of the Federal Open Market Committee (FOMC), preferring to cut borrowing costs by a quarter of a percentage point. Those disagreements come as Trump unleashes an unprecedented amount of public pressure on Fed Chair Jerome Powell to cut rates. Trump has said the chief central banker is 'too late' to adjust policy, is preventing the economy from booming and is adding to the U.S. government's own cost of borrowing money. He reportedly discussed firing Powell before his term ends in May 2026 with Republican lawmakers. 'This will only add to the scrutiny and second-guessing of anything the Jerome Powell-led Federal Reserve says, does or doesn't do,' said Greg McBride, CFA, Bankrate chief financial analyst. Consumer borrowing costs are a little bit lower than they were at this time a year ago, after the U.S. central bank lowered interest rates a full percentage point across a series of cuts in late 2024. Yet, the U.S. central bank's key rate has been frozen since January, with officials paralyzed by rising economic uncertainty. A top concern is Trump's ongoing global trade war, which brought tariff rates on key trading partners to the highest level since the Great Depression. Economists warn that those tariffs could result in higher prices across store shelves, but they may also weaken economic growth and make production more expensive. So far, inflation has shown up first. After coming within an earshot of the Fed's 2 percent target earlier this year, price pressures are now picking up again. Inflation rose 2.7 percent from a year ago, according to the latest data from the Bureau of Labor Statistics, and many prices on items that are typically imported popped. Even so, price increases haven't been as drastic as economists initially feared — but that depends on where tariff rates end up. Helping keep a lid on inflation, Trump reduced or postponed many of the harshest tariff hikes that he announced on 'Liberation Day' in early April, but a key Aug. 1 deadline is approaching. Trump has said that any country that doesn't strike a deal with the U.S. could face tariff rates between 15-20 percent, and he's threatened a steeper 50 percent levy on goods from Brazil. The higher the tariff rate, the harder it becomes for businesses to absorb some of those higher costs. The products that businesses stocked up on before tariffs went into effect also won't last forever. Powell has highlighted that someone along the supply chain — whether it's the importer, the exporter, the retailer or the consumer — will end up footing the bill. Right now, they just don't know who. 'They may be less than people estimate or more than people estimate. They're not going to be zero,' Powell told reporters at the Fed's post-meeting press conference. 'Consumers will pay some of this. Businesses will pay some of this. Retailers will pay some of this. We're just going to have to see it through.' If businesses end up eating those costs, one risk is that they might start to cut back on hiring — or reduce headcount altogether. Already feeling the pain of elevated post-pandemic inflation, consumers could also start to pull back on spending. Policymakers have implied that those effects could actually offset higher inflation, weakening the economy. It's part of the reason policymakers still continued penciling in a median of two cuts for 2025, despite simultaneously expecting higher inflation. Some Fed officials have also indicated that they don't want to wait too long to watch what happens with inflation because high rates alone raise the risk of a recession. Powell said the Fed hasn't made any decisions on when it could next cut rates and that they'll want to keep an eye on incoming data. Previously, investors had predominantly expected the next rate cut to occur in September, according to CME Group's FedWatch tool. 'Interest rates are high and are unlikely to come down quickly,' McBride says. 'Consumers should lean into this by aggressively paying down high-cost debt and padding emergency savings. Those with less debt and more savings will be best positioned to weather whatever the economy throws at us in the months ahead.' Wondering what to make of the Fed's latest announcement? Here's a breakdown of what it means for every aspect of your personal finances. The Fed's interest rate decision: What it means for you Savers Savers are among the biggest winners in today's high-rate environment. Yields on savings accounts and certificates of deposit (CDs) are unlikely to budge much as the Fed keeps rates steady. That can help Americans grow their savings at a time when they may need it most. Recession risks are elevated, yet less than half (or 46 percent) of Americans have enough savings to cover three months' worth of expenses, according to Bankrate's latest Emergency Savings Report. Experts typically recommend keeping enough cash on hand to cover at least six months' worth of expenses. Unless you've locked in your cash in a CD, though, banks could adjust their offerings at any time. Yields may restart their descent if the Fed begins strongly signaling that they're about to start cutting rates again. Even if yields start to drift lower, most important for savers will be whether yields remain higher than the current rate of inflation. Savers are most likely to earn a 'positive' return in a high-yield savings account, where yields currently stand at 4 percent or more. That's almost eight times higher than the national average savings rate of 0.48 percent, which is weighed down by traditional brick-and-mortar banks that pay near-zero percent in interest. Borrowers If there's any clear loser from today's high-rate era, though, it's borrowers. Americans with credit card debt are still facing higher interest rates than at any point before the pandemic — even after the Fed has started cutting rates. Meanwhile, Americans who've had to make a big-ticket purchase have been forced to borrow during one of the most expensive periods in over a decade. Here's a snapshot of the current borrowing landscape and how high key consumer borrowing rates remain as the Fed continues to keep rate cuts on hold: Credit card rates: 20.13 percent; Home equity lines of credit (HELOCs): 8.26 percent; Home equity loans: 8.25 percent; Five-year new car loan: 7.26 percent; Four-year used car loan: 7.73 percent; and Personal loans: 12.64 percent. If you have a balance on your credit card, consider utilizing a balance-transfer card. The best offers on the market come with an introductory 0 percent annual percentage rate (APR) for up to 21 months, helping you make headway on your repayments. If your balance is too large, though, you might be better off working with a nonprofit credit counselor. If you think you may have to borrow money during today's high-rate era, keep a close watch over your credit score. Borrowers with a record of on-time payments, a healthy utilization rate (typically seen as being no more than 30 percent) and a low debt-to-income ratio are often guaranteed the most competitive rates. Homeowners and homebuyers The Fed has greater control over shorter-term interest rates — not rates on long-term debt like a 30-year fixed-rate mortgage. That helps explain why mortgage rates have actually increased since the Fed began cutting borrowing costs in September, which have been stuck above 6.5 percent since October 2024. The 30-year fixed-rate mortgage more closely tracks the 10-year Treasury yield, which has risen as investors process fears of hotter inflation from tariffs and ballooning government debt. Even once the Fed cuts interest rates, it might not offer much help. The current consensus among housing economists is that 30-year mortgage rates could remain above 6.5 percent for the rest of this year, according to Bankrate research. Lower rates could help heal some of the affordability challenges plaguing borrowers. The median home sale price for June 2025 surged to $435,300, the highest median price on record, according to the latest data from the National Association of Realtors. It could also, however, bring a wave of borrowers onto the market, further pushing up prices. Those prices continued to climb last month, even as sales of existing homes dropped 2.7 percent from the previous month, as shortages continue to strain housing supply. Investors That might not last forever. Investors will be looking at the same economic signals as Fed officials. Sentiment may change if growth begins to slow — or if a resilient economy keeps lower interest rates on of that should matter to long-term investors. If you don't need any cash for another five to 10 years, you're probably better off staying the course and weathering any short-term volatility. The stock market's post-Liberation Day tear illustrates why: Investors who pulled out and sold any assets as the S&P 500 plunged a whopping 12 percent missed out on a subsequent 28 percent rebound. Investors seem to be unfazed by rising economic uncertainty, higher tariffs and a Fed on hold. The S&P 500 and Nasdaq have both been flirting with record highs, and after surging to the highest level since the pandemic, volatility has been low, according to the Chicago Board of Options Exchange's Vix Index. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
