The Impact of the Renminbi on the Singapore Dollar: The Three Layers of Logic Behind Recent Cryptocurrency Market Fluctuations

This month, the cryptocurrency market experienced a sharp correction, driven by multiple factors beyond a single cause. From China’s new policies impacting the RMB-to-crypto ecosystem, to shifts in global liquidity expectations, and institutional battles in the derivatives market, these pressures resonated together. The market is searching for a “thawing” path, but signals from regulation, macroeconomics, and technical indicators continue to evolve.

Stricter Regulations: New Boundaries for RMB Stablecoins and Asset Tokenization

Recent developments in China’s crypto policies send strong regulatory signals. According to legal experts, the current policies focus on three main areas: strict restrictions on RMB stablecoin issuance, a ban on domestic asset tokenization (RWA), and filing requirements for offshore tokenized high-quality domestic assets.

This means the traditional exchange model of RMB to crypto is facing restructuring. As the most important value anchor in the crypto ecosystem, stablecoins are now under tight control, directly affecting market liquidity and trading convenience. Meanwhile, the ban on asset tokenization further limits traditional assets from entering the crypto space, causing substantial impacts on projects relying on real-world assets.

Liquidity Challenges and Technical Pressures

Changes in the global economy are also profoundly affecting market expectations. Some analysts note that although global liquidity is increasing, it does not necessarily lead to a bull market. The effectiveness of quantitative easing is waning, and correlations between traditional assets and crypto assets are shifting—silver markets and altcoins exhibit similar volatility patterns, reflecting a synchronized decline in risk appetite.

Technical pressures are even more direct. This week saw the largest decline in three years, with key moving averages broken, triggering a chain of liquidations. Data shows over 430,000 positions were liquidated in a short period, totaling 1.7 billion yuan. This not only reflects retail traders’ stop-loss actions but also highlights operational errors by large institutions, which intensified sell-offs and amplified market volatility.

Institutional Battles and New Rules in the Derivatives Market

Notably, global regulators are also making proactive changes. The U.S. Commodity Futures Trading Commission (CFTC) officially approved stablecoins as margin collateral for derivatives trading, based on the recent GENIUS Act framework.

This decision is significant. In the $250 trillion global derivatives market, stablecoins are now formally recognized as collateral, providing a clear regulatory framework for non-bank issued stablecoins. This will attract more institutional capital into crypto derivatives, improving trading efficiency, but also means that the valuation relationship between RMB and stablecoins will be re-priced under the new regulatory regime.

Searching for a “Thawing” Path

Although the recent market decline is widely seen as a “crypto winter,” industry insiders generally believe this cycle could end sooner than expected. The key factors to watch include the direction of interest rate policies, progress in mainstream technological upgrades, and the final implementation of regulatory frameworks.

From the perspective of RMB-to-crypto, strict regulatory policies may actually accelerate industry compliance. Projects and institutions that adapt to new rules will gain more market trust, and the focus may gradually shift from speculation to application and fundamentals. This volatility could mark the beginning of a market rebalancing.

(This analysis reflects insights from multiple industry sources and is for informational purposes only.)