Ant Financial has taken action! R25 teams up with Polygon to launch yield-bearing RWA stablecoin.

The stablecoin and real-world asset (RWA) protocol R25 incubated by Ant Financial has launched its on-chain platform, with Polygon as its first blockchain partner, introducing a new type of yield stablecoin backed by traditional financial instruments. The first product rcUSD+ aims to maintain a 1:1 peg to the USD while providing yields sourced from money market funds and structured note portfolios.

Ant Financial Incubation R25 Enters RWA Track

The launch of R25 indicates that as institutional interest in on-chain yields grows, the market demand for compliant, asset-backed stablecoins is accelerating. The protocol is incubated by Ant Financial, a financial technology giant under Alibaba, which has a strong foundation in the fields of payment, wealth management, and blockchain technology. Alipay, under Ant Financial, is one of the largest mobile payment platforms in the world, with over 1 billion users, and its successful experience in the fintech sector provides strong endorsement for R25.

Choosing Polygon as the first partner is no coincidence. Polygon is one of the most successful Layer-2 solutions in the Ethereum ecosystem, boasting low transaction fees, high throughput, and native interoperability with the Ethereum mainnet. More importantly, Polygon has attracted a large number of institutional-grade project deployments, including Web3 projects from traditional companies like Disney, Starbucks, and Meta. This institution-friendly ecosystem makes it an ideal platform for R25 to launch institutional-grade RWA products.

Polygon co-founder Sandeep Nailwal stated that this collaboration aims to bring “institutional-grade real-world assets” on-chain, and added that the risk management structure of R25 “will provide immense value to users and the protocol built here.” This statement indicates that Polygon views R25 as a strategic partner rather than just a regular protocol deployment.

R25 indicates that its underlying assets include multiple layers of credit enhancement measures aimed at strengthening the creditworthiness of the stablecoin. Credit enhancements typically include mechanisms such as over-collateralization, third-party guarantees, and reserve funds, which can protect stablecoin holders' interests in the event of default or depreciation of the underlying assets. This risk management framework is a key factor of utmost concern for institutional investors and represents a core difference between R25 and other stablecoins.

rcUSD+ innovative mechanism for earning stablecoin

The first product rcUSD+ aims to maintain a 1:1 peg to the US dollar while providing yields derived from a combination of money market funds and structured notes. This token will be open to all users within the Polygon DeFi ecosystem, placing it among the many assets entering the market that support stablecoins. This design of “interest-bearing stablecoin” is a significant upgrade over traditional stablecoins like USDC and USDT.

The operational model of traditional stablecoins is that the issuer holds an equivalent amount of USD reserves or short-term U.S. Treasury bonds, while users hold the stablecoins but do not earn any interest, and the issuer solely enjoys the interest income from the reserved assets. This model is not a significant issue in a low-interest-rate environment, but when the yield on U.S. Treasury bonds exceeds 5%, the issuer can earn billions of dollars annually from the reserves, while users gain nothing.

The innovation of rcUSD+ lies in its sharing of the returns from reserve assets with holders. Users holding rcUSD+ not only enjoy the convenience of a stablecoin (value stability, instant settlement) but also earn returns similar to those of a money market fund. This design aligns with user interests and enhances the appeal of the stablecoin. From an economic perspective, this is a fairer value distribution mechanism.

Money market funds and structured notes are the sources of rcUSD+ yields. Money market funds invest in low-risk assets such as short-term government bonds and bank certificates of deposit, with yields typically ranging from 4% to 5.5% (depending on Federal Reserve rates). Structured notes are debt instruments issued by banks, which may offer higher yields but also come with increased risks. R25 attempts to find a balance between yield and risk through diversified investments and multi-layer credit enhancement.

The company expects that rcUSD+ will achieve integration in lending, collateral, and liquidity protocols on Polygon, thereby enhancing capital efficiency in DeFi applications. This means that users can use rcUSD+ as collateral to borrow from lending protocols like Aave or Compound, or provide liquidity on DEXs like Uniswap. Compared to using traditional stablecoins, the built-in yield of rcUSD+ allows for higher capital efficiency at the same level of risk.

The Institutional Battle for the Trillion-Dollar RWA Market

The launch comes at a time when people are rekindling their interest in tokenizing real-world assets. Standard Chartered Bank estimates that by 2028, the market size could grow from the current approximately $35 billion to $2 trillion. The bank anticipates that most of these assets will be located on Ethereum, although competitive Layer-2 networks like Polygon are positioning themselves to capture a portion of the trading activity.

The 57-fold growth forecast is not an exaggeration. Potential targets for RWA tokenization include almost all traditional assets such as real estate, stocks, bonds, commodities, artworks, and intellectual property. The global real estate market is over $300 trillion, the bond market exceeds $130 trillion, and the stock market is about $100 trillion. If just 1% of these assets are tokenized, it would create a market size of several trillion dollars.

The analyst from Redstone stated earlier this week: “The proliferation of yield stablecoins and tokenized assets is narrowing the yield gap between TradFi and cryptocurrencies.” The company pointed out that currently only 8% to 11% of crypto assets generate yield, while the figure for traditional finance is 55% to 65%, but this gap is rapidly closing with the popularity of tokenized government bonds and RWAs.

RWA Market Growth Forecast

Current Market Size: 35 billion USD

2028 Forecast Size: 2 trillion USD

Growth Multiple: 57 times

Main Asset Classes: Tokenized government bonds, real estate, corporate bonds, structured products

Analysts say that with the popularity of RWA, yield stablecoins like rcUSD+ can help narrow the yield gap between cryptocurrencies and TradFi. This perspective reflects an important trend: DeFi is shifting from a speculative model of “high risk, high reward” to an institutional model of “steady returns.” When DeFi can provide risk-adjusted returns comparable to or even better than those of traditional finance, large-scale inflows of institutional funds will become possible.

Ant Financial has entered this market through R25, demonstrating the strategic importance that Chinese technology giants place on the RWA track. Although China maintains a cautious stance towards cryptocurrency trading, it remains open to the application of Blockchain technology in financial infrastructure. Ant Financial has long been among the global leaders in the number of Blockchain patent applications, and its explorations in areas such as supply chain finance, cross-border remittances, and digital asset custody provide R25 with technical and business expertise.

Polygon's Strategic Layout in the RWA Race

The bank expects that most of these assets will be located on Ethereum, although competitive Layer-2 networks like Polygon are positioning themselves to capture a share of the trading activity. This prediction reflects the current competitive landscape of blockchain infrastructure. Ethereum maintains its leading position in the RWA space due to its first-mover advantage, largest developer community, and deepest liquidity. However, high gas fees and relatively low throughput create opportunities for Layer-2 solutions.

Polygon has a unique advantage in this competition. First, it is highly compatible with Ethereum, allowing developers to easily migrate smart contracts from Ethereum to Polygon, enjoying lower fees and faster confirmation times. Second, Polygon has already attracted a large number of institutional-grade projects, proving the reliability of its infrastructure. Third, Polygon is actively collaborating with TradFi institutions to provide customized enterprise-grade Blockchain solutions.

R25 chose Polygon as the launch platform instead of directly opting for the Ethereum mainnet, demonstrating its focus on cost efficiency and user experience. Issuing rcUSD+ on Polygon may incur transaction fees that are only 1% of those on the Ethereum mainnet, which is crucial for scenarios involving frequent trading and small payments. Additionally, Polygon's fast confirmation times (usually within 2 seconds) make it more suitable for payment and real-time settlement applications.

The company expects that rcUSD+ will be integrated into lending, collateral, and liquidity protocols on Polygon, thereby improving capital efficiency in DeFi applications. This deep integration strategy will make rcUSD+ not only an independent product but also a foundational infrastructure of the Polygon DeFi ecosystem. As more and more protocols adopt rcUSD+ as a unit of account or collateral, a network effect will form, further enhancing its market position.

From a competitive landscape perspective, rcUSD+ will face strong competitors. Circle's USDC and Tether's USDt already have a large user base and deep liquidity on Polygon. However, the built-in yield feature of rcUSD+ may become a differentiated competitive advantage. For institutional investors seeking stable returns, being able to achieve an annualized yield of 4% to 5% while maintaining liquidity is far more attractive than traditional stablecoins that offer zero yields.