by Tan Aik Keong (AK)
Two stablecoin-related developments surfaced in Malaysia recently. First, Bullish Aim, a company under Johor Regent Tunku Ismail, announced RMJDT, a Malaysian ringgit-pegged stablecoin launching on the Zetrix blockchain, aimed at use cases like cross-border trade settlement. Second, Capital A signed a letter of intent with Standard Chartered Malaysia to explore and pilot an MYR stablecoin under Bank Negara's Digital Asset Innovation Hub (DAIH) framework, focused on wholesale enterprise use cases such as faster settlement, treasury management and programmable cash flow.
Taken together, the signal is genuinely positive: local discussion of stablecoins is shifting from concept and speculation toward validated use within a compliance framework. Whether building on a specific blockchain ecosystem or piloting with an international bank under a regulatory sandbox, both point toward the same idea — bringing digital assets closer to the real economy and real business processes.
A lot of people hear "stablecoin" and immediately equate it with "cryptocurrency." But a stablecoin's core goal isn't price volatility — it's the opposite: staying as stable as possible, so it can function as a payment, settlement and bookkeeping tool. Ideally, a stablecoin can make cross-border transactions, supply-chain reconciliation and fund transfers more efficient, cutting the friction and time cost of reconciliation and intermediaries. It also gives regulators and industry a real testing ground to see which processes can be digitised and which risks need to be managed through proper institutional frameworks.
Two reference models: reserve-backed vs algorithmic
The market usually reaches for two international examples to understand stablecoin value: reserve-backed stablecoins, and algorithmic ones.
A reserve-backed stablecoin like USDT works on a simple logic: it's pegged and backed by reserve assets, with a redemption mechanism maintaining market confidence. For enterprise and institutional users, the appeal is that when the reserve structure is clear, redemption works smoothly, and disclosure stays consistently transparent, it becomes much easier to fold into a risk-management framework and everyday operations.
TerraUSD (UST), by contrast, is the textbook algorithmic stablecoin — it tried to hold its peg through algorithms and incentive design, and failed under stress, becoming an important risk lesson for the market. Worth noting: Do Kwon, founder of Terraform Labs, the company behind UST, was recently sentenced to 15 years in a US federal court in New York — a reminder of just how much accountability and compliance sit behind the word "stable." Financial innovation isn't just a technical question; it involves governance, disclosure and legal liability too.
But treating UST as a cautionary tale doesn't mean rejecting stablecoins outright. If anything, that experience made one thing clearer to the industry: for a stablecoin to be widely adopted in the real world, "trustworthiness" has to be engineered as something verifiable, auditable and accountable. In other words, the more a stablecoin moves toward compliance and enterprise-grade use, the more clearly and rigorously it needs to demonstrate its trust mechanism.
Five things that build trust
So what makes a stablecoin easier for the market and institutions to trust? Five fairly constructive factors: disclosure, custody, audit, redemption, governance.
Disclosure. The market generally wants continuous, clear, understandable disclosure: what the reserve assets actually are, in what proportions, whether there's maturity mismatch or concentration risk, and what the risk-management principles are. Better disclosure means less unnecessary speculation and misunderstanding, and more stable expectations.
Custody. Who holds the reserve assets, whether they're segregated from the issuer's own assets, and whether they remain independently identifiable and get priority repayment in an extreme scenario — these arrangements turn a promise into an institutional safeguard, and are often one of the key thresholds for whether institutional users are willing to use it at all.
Audit and attestation frequency. For a stablecoin to go mainstream, it usually needs independent third-party attestation or audit of its reserves. The more consistent the frequency and methodology, and the more comparable the information, the easier it is to build long-term trust and support enterprise compliance and risk assessment.
Redemption. Whether it can be redeemed at face value, how fast funds land, the fee structure, and how exceptions are handled — these details decide how usable a stablecoin actually is in real business. The clearer the rules, the more confidently users can treat it as a payment and settlement tool, rather than something they hold but are afraid to actually use.
Governance and permissions. Minting and burning rules, contract upgrade mechanisms, permission boundaries, risk-trigger conditions, and compliance workflows. Transparent governance and clear accountability lower operational risk and reduce concern about a "black box."
Seen through that lens, whether it's RMJDT on Zetrix or Capital A and Standard Chartered's MYR stablecoin exploration, the public should watch both with constructive expectation: how clearly and completely they build out these mechanisms within a compliance framework, and how well they prove real value through measurable pilot use cases. As long as the path stays sound and institutionalised, stablecoins have a real shot at becoming a foundational tool for enterprise digitisation, rather than just another trending buzzword.
In fintech, the hard part was never coining a new term — it's fitting a new tool into the gears of the real economy, so it turns more smoothly, more transparently, and in a way that can actually be regulated. If these two local paths keep advancing, building public confidence on hard metrics like disclosure, custody, audit, redemption and governance, that would be genuinely encouraging progress for Malaysia's digital finance ecosystem as a whole.
Part of the AK AI Corner column. Originally published in Oriental Daily (东方日报) on Dec 16, 2025.