{"text":[[{"start":10.4,"text":"This article only represents the author's own views."}],[{"start":14.63,"text":"In the Wild West of digital assets, stability is fast emerging as a precious commodity. OSL Group Ltd. (0863.HK) realizes that and is looking to sell investors on its ability to prosper by offering just that resource."}],[{"start":34.980000000000004,"text":"Last Thursday, the provider of stablecoin trading and payment services said it raised $200 million to fund its expansion, including acquisitions. The money came from asset management giant Fidelity, which already held a sizable stake in OSL before the latest fundraising, according to Tracxn. The move comes just six months after OSL secured an even greater $300 million in what was the largest publicly disclosed equity sale by a crypto sector company at that time."}],[{"start":67.66,"text":"The aggressive, back-to-back fundraisings point to a high-stakes land grab in one of finance's fastest-evolving frontiers. Demand for stablecoins, digital tokens pegged to steady real-world assets like the U.S. dollar, is growing exponentially as they become critical plumbing for the digital asset economy on two fronts."}],[{"start":90.1,"text":"Firstly, for the likes of traders and investors, converting volatile cryptocurrencies into dollar-backed tokens like stablecoins is essential in managing risks and liquidity. Institutional adoption of stablecoins is increasing, providing a powerful force for their growth. More than 80% of institutions across the globe are using or exploring stablecoins, according to a survey by EY and Coinbase published in March last year."}],[{"start":120.3,"text":"Secondly, stablecoins are becoming a vital tool for cross-border payments and remittances. By leveraging blockchain technology, stablecoins can facilitate cross-border transactions that are faster and cheaper than the traditional route through banking systems, particularly in emerging markets. So, it’s no wonder a growing number of businesses are accepting stablecoins, which means they are emerging as an increasingly popular real-world currency."}],[{"start":151.15,"text":"At the regulatory level, authorities are also increasingly providing growing clarity for crypto-related businesses by establishing licensing requirements. In 2020, OSL became the first firm to receive a license from Hong Kong’s Securities and Futures Commission to offer regulated brokerage and automated trading services for digital assets. Such regulatory frameworks allow licensed companies to build services within well-documented parameters, which can add stability and credibility to their operations."}],[{"start":185.08,"text":"Along the same lines, the development of legislation specifically for stablecoins is gaining momentum across major markets including the U.S. and Hong Kong, providing further fuel for the growth of those digital assets. Tellingly, Fidelity is set to launch its own stablecoin soon."}],[{"start":204.52,"text":"OSL is also strategically based in Hong Kong, where stablecoin and other crypto services are legal, even as similar activity is banned across the border in Mainland China. That means OSL is well placed to benefit not only from regional stablecoin trading in Asia, but also from a growing number of Mainland Chinese companies setting up Hong Kong units to engage in the business."}],[{"start":231.35000000000002,"text":"All that translates to a solid growth foundation for OSL after abandoning its older advertising and park management businesses in 2022 and 2023 to go all in on digital assets. In the first half of last year, OSL’s revenue jumped 58% year-on-year to HK$195.4 million ($25 million) as it gained traction in its new area."}],[{"start":259.98,"text":"Over-the-counter trading services are OSL’s main business, and they continued to account for the lion’s share of its revenue on the back of a 200% increase in transaction volume in the first half of last year. But the company’s real standout performer was OSL Pay, a platform that converts real country-backed currencies to stablecoins, and vice versa. That was launched just last April, and contributed a remarkable 28.6% of the company’s total revenue in the first half of last year, primarily from Europe."}],[{"start":294.62,"text":"Full expansion mode"}],[{"start":296.81,"text":"OSL is in full expansion mode as it pursues its new direction, with its headcount more than doubling to 568 in first half of last year. The company isn’t just growing in size — it’s also on a campaign to collect licenses to operate stablecoin businesses in other global markets, often through acquisitions, a process essential to building an international customer base. In the first half of last year, OSL expanded its license portfolio to a number of new geographies, including Italy, Bermuda and Indonesia."}],[{"start":332.49,"text":"OSL was also busy rolling out new products, including StableX for compliant stablecoin issuance and Tokenworks for real-world asset tokenization. Its upcoming OSL BizPay is aimed at offering stablecoin payment services specifically for corporations."}],[{"start":351.43,"text":"So for investors, the thesis is clear: OSL is trying to position itself as part of the regulated backbone for the digital asset economy by providing services related to steadier, utility-like payment infrastructure, steering clear of the high volatility for most cryptocurrencies. And its recent fundraising spree suggests that investors are buying into its story."}],[{"start":376.32,"text":"“This financing round will allow us to welcome more like-minded strategic and long-term investors,” OSL CFO Ivan Wong said in the company’s announcement of its latest equity sale. “Beyond strengthening our capital base and diversifying our shareholder structure, these funds will enable us to seize timely opportunities to acquire licensed trading and payment entities worldwide, further solidifying our first-mover advantage as we advance our compliance-driven global strategy.\""}],[{"start":410.02,"text":"The question now is whether the company can translate its heavy investment into durable, profitable growth. In the first half of last year, its loss from continuing operations more than doubled from a year earlier as operating expenses swelled. Also, juggling regulatory compliance in different global markets and integrating acquired companies may be easier said than done. Moreover, OSL will face increasing competition, not only from agile startups but also deep-pocketed traditional financial institutions entering the crypto space."}],[{"start":446.71999999999997,"text":"Last but not least, there’s also the big question mark hanging over stablecoins, namely, whether they’re really as stable as their name implies. One earlier stablecoin, TerraUSD, made headlines with its spectacular crash that wiped out most of its value in just days in 2022."}],[{"start":469.21,"text":"The $500 million that OSL raised in the past year, while substantial, may prove a mere down payment in a long battle. The promised payoff — a profitable, scaled global payments network — remains years away, assuming OSL can execute everything well and stablecoins gain traction."}],[{"start":490.54999999999995,"text":"OSL shares have slid since its latest fundraising announcement, probably due to the equity dilution and large discount the new shares were sold for. Even so, the stock still trades at a price-to-sales (P/S) ratio of about 24, well above 7 for top U.S. crypto exchange, Coinbase Global (COIN.US), although the latter has a much larger revenue base."}],[{"start":516.99,"text":"The appeal of stablecoins is quite clear. And OSL’s strategy to bet its growth on the digital asset makes sense as well. But relentless growth isn’t worth much without profits, a problem OSL will need to fix in the near- to medium-term to keep investors interested in its stablecoin story."}],[{"start":550.32,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1770194447_1982.mp3"}