Designing a Stablecoin-Backed Patent Pool Securitization Model: International Experience Comparison and China's Path Selection

Wang Fang¹, Cai Zonghan²

In the knowledge economy era, patent pools and patent securitization are regarded as important tools for alleviating financing constraints faced by pharmaceutical enterprises. However, traditional models have been constrained by uncertain valuation returns, legal obstacles, and restrictions on cross-border settlement, driving the need for institutional innovation. Meanwhile, stablecoins, with their price anchoring and cross-border payment advantages, have gradually entered the regulatory agendas of countries worldwide. This study integrates "patent pool securitization" with "stablecoins" and proposes an innovative institutional framework based on smart contracts and the digital renminbi. Building upon a review of the theoretical foundations, institutional logic, and risk characteristics of patent securitization and stablecoins, the paper compares regulatory experiences in the United States, the European Union, Japan, and Hong Kong, and employs the Royalty Pharma case along with simplified simulations to demonstrate the feasibility of the proposed model in enhancing liquidity, transparency, and compliance. The main contribution lies in being the first to advance a "stablecoin + patent pool securitization" pathway, thereby expanding the interdisciplinary field of intellectual property finance and digital currency research, while offering forward-looking policy implications for financing small and medium-sized pharmaceutical enterprises and promoting the internationalization of the digital renminbi.

Keywords: Patent Pool Securitization; Stablecoin; Digital Renminbi (e-CNY); Intellectual Property Finance; Legal and Regulatory Framework

Cai Zonghan, Doctor of Law, native of Tainan, Taiwan; Invited Chief Research Fellow at the Real Estate Information Center, Renmin University of China; Distinguished Professor at the School of Business Administration, Guangzhou Institute of Technology. Research interests: Land policy, land finance policy, real estate policy. Beijing 100872. Email: caizonghan@bucea.edu.cn

2. Basic Theories of Patent Pool Securitization and Stablecoins

Before delving into specific institutional comparisons and case analyses, it is necessary to clarify the theoretical framework of this study. This paper proposes a "four-pillar support" framework from an interdisciplinary perspective: (1) securitization theory; (2) intellectual property financialization theory; (3) payment and monetary theory; and (4) comparative law and institutional transplantation. The first three pillars constitute the economic and financial foundation of the research, while the last provides analytical methods at the legal and policy level.

2.1 Concepts, Mechanisms, and Practical Dilemmas of Patent Pools and Patent Securitization

A patent pool is a cooperative mechanism in which multiple patent holders consolidate patents covering a particular technology field or standard through contractual arrangements, licensing them internally or externally under unified terms. Its advantages lie in reducing transaction costs, mitigating the "tragedy of the anti-commons" caused by patent thickets, and enhancing the efficiency of technology standardization. However, patent pools also entail significant risks: excessive concentration may strengthen market dominance and lead to anti-competitive consequences.

Patent securitization is the process of using future revenue rights from patents or patent portfolios as underlying assets to achieve financing through structured financial instruments. The mechanism typically includes asset identification, cash flow forecasting, risk tranching, and securities issuance. Compared with traditional debt financing, patent securitization's advantage lies in transforming intangible assets into tradable financial products, thereby improving corporate liquidity and financing capacity. Nevertheless, three major dilemmas persist in practice: First, uncertainty in patent valuation leads to investor risk perception biases; second, the mismatch between patent revenue cycles and capital market expectations; and third, incomplete legal systems, particularly regarding patent stability and bankruptcy law protections. In the pharmaceutical sector, where drug R&D involves long cycles and high risks, the significance of financing through patent pool and securitization combinations becomes even more pronounced. However, how to generate stable cash flows, attract investors, and guard against potential monopolistic risks remains an urgent issue to address.

2.2 Nature, Risks, and Regulatory Frameworks of Stablecoins

Stablecoins are a class of crypto-digital assets pegged to specific fiat currencies, assets, or algorithmic rules, designed to overcome the excessive volatility of traditional cryptocurrencies like Bitcoin and enhance their functions as payment media and value storage. Stablecoins are generally categorized into three types: fiat-collateralized, crypto-asset-collateralized, and algorithmic stablecoins, each with distinct advantages and disadvantages regarding stability, credit risk, and technical risk.

Despite their potential in cross-border payments, settlement, and financial innovation, stablecoins pose significant risks: First, they may trigger systemic financial risks, such as liquidity crises caused by massive redemptions or "de-pegging"; second, potential money laundering, terrorist financing, and capital flight risks; and third, the weakening of monetary policy independence and national monetary sovereignty. Regarding regulatory frameworks, different jurisdictions exhibit divergent approaches. The United States emphasizes a function-oriented regulatory path: if a stablecoin possesses securities attributes, it falls under the jurisdiction of the Securities and Exchange Commission (SEC); if it has commodity attributes, it is subject to Commodity Futures Trading Commission (CFTC) rules; additionally, the Financial Crimes Enforcement Network (FinCEN) requires stablecoin issuers to fulfill anti-money laundering (AML) and know-your-customer (KYC) obligations. The European Union has established a unified regulatory framework through the Markets in Crypto-Assets (MiCA) Regulation, imposing different regulatory obligations on Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs). Japan emphasizes revising its Fund Settlement Act, requiring stablecoins to be issued by banks or trust institutions. Hong Kong launched a stablecoin sandbox pilot in 2024 and formally introduced its regulatory regime in 2025, adopting a "gradual and inclusive" experimental approach. Taiwan is currently in the legislative stage: the Virtual Asset Service Provider (VASP) Act draft was submitted to the Executive Yuan in 2025, proposing provisions for stablecoin issuers to establish reserves, obtain issuance qualifications, and accept regulatory reporting obligations. By contrast, China has issued prohibitive regulations on virtual currency/token issuance and financing activities, such as the 2021 Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading and Speculation, which bans token issuance financing and related services.

2.3 Theoretical Foundations: Securitization Theory, Intellectual Property Financialization, Payment and Monetary Theory, and Comparative Law

The theoretical framework of this study is based on four main aspects:

First, securitization theory. Its core lies in transforming illiquid or high-risk assets into tradable securities through asset restructuring and risk tranching, thereby improving financing structures. This theory provides the foundation for how patent pools can achieve capital marketization through financial engineering.

Second, intellectual property financialization theory. This theory emphasizes that intellectual property is not only a legal right to innovation outcomes but also a tradable and financiable financial asset. Through securitization or collateralized financing, intellectual property can become an important asset class in capital markets.

Third, payment and monetary theory. The rise of stablecoins lies in their potential to fulfill the three major functions of money (unit of account, medium of exchange, and store of value). Whether stablecoins can become effective payment and settlement tools in patent securitization requires evaluation from the perspectives of monetary theory and financial stability.

Fourth, comparative law and institutional transplantation theory. Since both stablecoins and patent securitization involve cross-border legal differences and institutional coordination, comparing regulatory models across different countries and selecting institutional paths suitable for China's national conditions constitute the core methodological support for this study.

3. International Comparison: Divergences and Commonalities Across Jurisdictions

In the institutional evolution of stablecoins and patent securitization, different countries and regions exhibit significant differences. The United States has accumulated practical experience through market-oriented approaches, the European Union ensures institutional certainty through unified legislation, Japan promotes the integration of digital currency and patent pools through industrial policy, Hong Kong has recently explored its path through sandbox pilots and formal regulation, while mainland China adopts a prudent model centered on central bank leadership. Comparing these institutional differences not only reveals similarities and differences in regulatory logic, policy objectives, and institutional tools across countries but also helps trace a "spatio-temporal evolution chain," providing references for China's future institutional design in integrating digital finance and intellectual property. Therefore, this chapter analyzes four typical jurisdictions—the United States, the European Union, Japan, and Hong Kong—and concludes with comparative insights incorporating China's path.

3.1 United States: Patent Securitization Practice and Crypto-Financial Regulation Under the SEC Framework

The United States is a global pioneer in both patent securitization and crypto-financial regulation. On one hand, the U.S. has mature intellectual property securitization practices, exemplified by Royalty Pharma, which issues asset-backed securities by packaging pharmaceutical patent royalty revenues, serving as an important channel for financing medical innovation. On the other hand, in the crypto-financial sector, U.S. regulation is "function-oriented," primarily governed by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN) based on securities law, commodity law, and anti-money laundering law, respectively. The SEC has repeatedly emphasized that certain stablecoins may constitute securities and should be regulated under the Securities Act of 1933 and the Securities Exchange Act of 1934. The CFTC treats stablecoins as "commodities," emphasizing derivatives trading risks, while FinCEN requires stablecoin issuers to fulfill AML and KYC obligations. This multi-agency division of labor creates regulatory uncertainty but maintains high institutional flexibility.

3.2 European Union: Stablecoin Regulation Under MiCA and Exploration of Intellectual Property Financing

The European Union has adopted a unified legislative approach to stablecoin regulation. The Markets in Crypto-Assets (MiCA) Regulation, formally adopted in 2023, establishes a regulatory framework for Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs). MiCA requires issuers to maintain capital reserves, disclose transparency information, and implement liquidity support mechanisms, with additional prudential regulation imposed on "significant stablecoins." At the intellectual property financing level, although the EU lacks specialized institutional exploration of "patent + stablecoin" combinations, it provides institutional space for future integration of blockchain and crypto-finance through the development of high-quality securitization (HQS) markets and intellectual property pledge financing. This model, aimed at unified legislation and enhanced market integration, demonstrates the EU's systematic advantages in digital financial regulation.

3.3 Japan: Industrial Policy-Driven Patent Pool and Digital Currency Development Strategy

Japan has adopted a "government guidance + market exploration" industrial policy path in both patent pools and digital currency. On one hand, Japan actively promotes central bank digital currency (CBDC) pilots and stablecoin legal construction in the digital currency field. The 2022 Revised Fund Settlement Act explicitly requires stablecoins to be issued by banks or regulated institutions, thereby strengthening integration with the fiat currency system. On the other hand, Japan actively promotes patent pool cooperation and capitalized financing in high-tech industries, with experiences from MPEG LA and LTE patent pools providing institutional references for pharmaceutical patent pool financing models. Through industrial policy support, Japan has gradually formed a compound development path featuring government regulatory guarantees and industry alliance promotion.

3.4 Hong Kong: Sandbox Pilot and Gradual Regulatory Path

Hong Kong has adopted a "gradual and inclusive" experimental approach to stablecoin regulation. In 2024, the Hong Kong Monetary Authority (HKMA) launched a stablecoin sandbox pilot, allowing select regulated institutions to test compliant scenarios for stablecoin payments and settlement; in 2025, Hong Kong formally introduced the Stablecoin Issuers Ordinance, establishing a licensing regime, capital requirements, and prudential regulatory obligations. This "pilot first, legislate later" path stands in stark contrast to mainland China's "prohibition + digital RMB" model and provides a unique experimental field for cross-border capital flows and international integration.

3.5 Taiwan: Gradual Regulation and Virtual Asset Norm Exploration

Taiwan has not yet enacted specialized legislation for stablecoins but has gradually strengthened regulation of virtual assets and service providers (VASPs) in recent years. Since 2021, the Financial Supervisory Commission (FSC) has incorporated virtual asset trading platforms into the Money Laundering Control Act, requiring customer due diligence (CDD) and suspicious transaction reporting. In 2023, the FSC announced it would promote legislative drafts for the Virtual Asset Management Regulations, formally submitting them to the Executive Yuan in 2025, aiming to establish a licensing regime and capital requirements for VASPs. Regarding stablecoins, the FSC emphasizes their potential payment and e-money functions and will conduct specialized regulation referencing international standards in the future. Currently, Taiwan adopts a "gradual + prudent" regulatory approach, using anti-money laundering frameworks for risk prevention while preserving space for financial innovation.

3.6 Summary: Differences, Borrowable Experiences, and Implications for China

From a comparative perspective, the U.S. model highlights diversified regulation and market-first approaches but suffers from regulatory fragmentation; the EU model achieves unified legislation through MiCA with high institutional certainty but may limit innovation space; the Japanese model emphasizes industrial policy leadership, forming dual support for intellectual property and financial regulation; the Hong Kong model highlights regional experimental characteristics through sandbox pilots and gradual legislation; and the Taiwan model transitions from anti-money laundering as an entry point to a comprehensive licensing system, demonstrating a gradual regulatory approach (see Table 1 [TABLE:1]).

Table 1 Comparison of Regulatory Approaches to Stablecoins and IP Securitization

Jurisdiction Stablecoin Regulation IP Securitization Practice Institutional Characteristics Borrowable Experience United States Function-oriented, multi-agency regulation (SEC, CFTC, FinCEN) Mature market practice (Royalty Pharma) Market-first, regulatory flexibility, innovation space High regulatory uncertainty, fragmented rules European Union Unified legislation (MiCA), classified management of ARTs and EMTs, high transparency High-quality securitization market, IP pledge financing High institutional certainty, market integration Limited innovation space, high compliance costs Japan Stablecoins must be issued by banks/trusts; government-guided patent pool financing Industrial policy-driven patent pool development Policy-driven, dual support for industry and finance Innovation relies on government support, insufficient market vitality Hong Kong Gradual inclusion, sandbox pilot → 2025 licensing regime Regional financial center advantage Regional flexibility, cross-border advantages Limited scale, subject to international regulatory coordination Taiwan Gradual regulation, VASP included in Money Laundering Control Act; 2025 draft Progressive legislation stage Prudent inclusion, gradual establishment of licensing system Stablecoin norms still lacking, limited market innovation space China Prudential prohibition, central bank-led, promoting e-CNY Pilot scale limited, single model Maintains financial stability, strengthens currency sovereignty High uncertainty, legal conflicts, insufficient liquidity

This table summarizes the institutional characteristics and differences across jurisdictions, reveals the logic of the "spatio-temporal evolution chain," and further highlights the uniqueness and necessity of China's model selection.

From a spatio-temporal evolution perspective, a path can be traced: United States (market-first) → European Union (unified legislation) → Japan (industrial policy-driven) → Hong Kong (gradual sandbox) → Taiwan (gradual legislation) → China (prudent prohibition + digital RMB dominance). This logical chain not only reveals the diversity of global stablecoin regulation but also provides a more complete reference for China's future institutional choices in integrating digital finance and intellectual property (see Figure 1 [FIGURE:1]). For China, three main experiences can be drawn: borrowing the flexible and diversified regulatory framework of the United States to allow exploration of stablecoin-patent securitization combinations within pilot scopes; learning from the unified legislative advantages of the European Union to incorporate intellectual property securitization elements when formulating digital finance laws in the future; and referencing Japan's industrial policy-driven model to combine with national science and technology innovation strategies to promote the integration of pharmaceutical patent pools and digital currency tools. These provide multiple international comparative insights for China's institutional design in integrating digital finance and intellectual property.

Figure 1: Spatio-temporal Evolution of Stablecoin Regulation across Jurisdictions

4. Designing a Stablecoin-Based Patent Pool Securitization Model

Building upon international comparisons, this paper further proposes an institutional innovation model of "patent pool → securitization → stablecoin/digital RMB settlement." This model not only inherits the logic of traditional intellectual property securitization but also incorporates the latest developments in blockchain and digital currency, thereby achieving breakthroughs in liquidity, transparency, and risk management. The following discussion unfolds across five dimensions: model logic, innovation highlights, comparative advantages, risks and preventive measures, and spatio-temporal evolution framework.

4.1 Model Logic: Patent Pool → Securitized Product → Stablecoin Payment/Settlement → Revenue Distribution

In terms of basic logic, the stablecoin-based patent pool securitization model can be divided into four stages:

First, patent pool formation. Multiple pharmaceutical enterprises consolidate patents into a pool to achieve unified licensing and management, reducing transaction friction caused by "patent jungles."

Second, securitized product design. Using future licensing revenues from the patent pool as underlying assets, an asset-backed securities (ABS) structure is employed for risk tranching and securities issuance, thereby transforming long-term revenues into liquid financial products.

Third, stablecoin/digital RMB settlement. Introducing stablecoins or e-CNY in securities trading and revenue distribution stages enables cross-border payments and on-chain settlement, improving capital flow efficiency and reducing foreign exchange conversion and clearing costs.

Fourth, revenue distribution. Through blockchain smart contracts, cash flows from securitized products (such as licensing fees and dividends) are automatically distributed to investors, achieving transparent and real-time revenue transmission.

4.2 Model Innovation: Cross-Border Applications Enabled by Smart Contracts and Digital RMB Support

The core innovation of this model lies in combining smart contracts with central bank digital currency support. Smart contracts can automatically trigger revenue distribution, redemption, or risk control mechanisms through preset terms, avoiding delays or default risks from manual operations. Moreover, incorporating the "digital renminbi (e-CNY)" can leverage the stability and compliance of legal tender in cross-border settlement while substituting for the potential risky asset attributes of foreign stablecoins, thereby achieving a balance between compliance and efficiency. Additionally, theoretical frameworks for smart contract risk management have initially taken shape, such as the six-step method based on the NIST risk management framework (identification, assessment, prioritization, mitigation, testing, monitoring), which helps enhance the security and transparency of financial contract execution. This provides institutional guarantees for revenue distribution and cross-border settlement in patent pool securitization.

4.3 Comparison with Traditional Models: Advantages and Disadvantages in Liquidity, Transparency, and Risk Management

Compared with traditional patent securitization models, the "stablecoin + patent pool" model offers several advantages:

Enhanced Liquidity: Traditional models rely on domestic currency markets with limited cross-border liquidity; introducing stablecoins enables securitized products to be traded more conveniently in international markets.

Improved Transparency: Blockchain ledgers and smart contract mechanisms can make capital flows and revenue distribution publicly transparent, reducing information asymmetry.

Better Risk Management: Under stablecoin payment and digital currency regulatory frameworks, fund security is relatively high, and combined with smart contracts, automated risk control can be achieved.

However, the model also has three main shortcomings:

1. Stablecoin De-pegging and Liquidity Crisis: Stablecoins may experience "de-pegging" or liquidity crises, leading to payment and settlement risks.
2. Smart Contract Vulnerabilities: Smart contracts remain susceptible to vulnerabilities and attacks, such as reentrancy attacks and code defects.
3. Insufficient Legal Compliance: Cross-border payments may touch upon capital control and monetary sovereignty boundaries.

4.4 Risk Prevention: Systemic Risk and Regulatory Arbitrage Issues

To guard against potential risks, three approaches are necessary:

Systemic Risk Prevention: Strengthen capital constraints and liquidity reserves for stablecoin issuers, referencing the EU's MiCA prudential regulation model for "significant stablecoins."

Smart Contract Security: Promote formal verification and full lifecycle risk management in smart contract development to avoid securitized product redemption failures due to technical vulnerabilities.

Regulatory Arbitrage Prevention: Establish a "regulatory sandbox" mechanism to explore patent pool securitization and stablecoin integration models within pilot frameworks, and reduce policy risks from stablecoin cross-border circulation through central bank digital currency participation.

Table: Risk Prevention Measures

Risk Type Manifestation Preventive Measure Systemic Risk Stablecoin de-pegging, liquidity crisis Strengthen capital constraints and reserve requirements, reference EU MiCA regulation of "significant stablecoins" Technical Risk Reentrancy attacks, code defects Promote formal verification and full lifecycle risk control (e.g., Securify/NIST framework) Compliance Risk Cross-border payments may touch capital controls, AML requirements Establish "regulatory sandbox," introduce e-CNY to replace foreign stablecoins, reduce policy risks

4.5 Spatio-Temporal Evolution Framework Summary

In terms of institutional evolution, this model is not only the result of horizontal comparison but also reflects spatio-temporal dynamics. From a temporal perspective, the United States first proposed securitization regulatory logic (2014–2018), the EU achieved institutional unification through MiCA (2018–2023), Japan revised its Fund Settlement Act and strengthened bank/trust issuance (2020–2023), Hong Kong adopted sandbox pilots gradually transitioning to legislation (2024–2025), and China leads with its central bank digital RMB strategy under prudent regulation (2021–present). This evolutionary path demonstrates a "US–EU–East Asia" spatio-temporal transmission effect. From a spatial perspective, different jurisdictions show clear differences in regulatory focus: US marketization, EU unification, Japanese industrial policy-driven, Hong Kong experimental inclusion, and Chinese central bank dominance. This "time + space" evolution framework not only reveals the progressive relationship of global regulatory logic but also provides gradual and differentiated reference paths for China's future institutional choices.

5. Case Studies and Simulation Analysis

This chapter demonstrates the feasibility and limitations of the "stablecoin + patent pool securitization" model through international case references, identification of obstacles to implementation in China, and scenario simulations based on simplified models, thereby enhancing the empirical relevance and practical value of the theoretical discussion.

5.1 International Case: The Reference Value of Royalty Pharma

U.S.-based Royalty Pharma is the world's largest pharmaceutical patent royalty acquisition and securitization company. Its business model core lies in acquiring future licensing fee revenues from pharmaceutical patents and conducting securitized financing, providing crucial funding sources for pharmaceutical R&D enterprises. Research shows Royalty Pharma's success rests on three pillars: First, future cash flow acquisition: leveraging professional teams to evaluate patent portfolios and acquiring future royalty revenue rights from pharmaceutical patents to ensure cash flow stability; second, securitized financing: using securitization technology to package future cash flows into asset-backed securities (ABS) for rapid capital recycling, breaking traditional venture capital cycle limitations; and third, risk-sharing mechanisms. Through structured securities tranching, a virtuous cycle is formed among patent holders, investors, and capital markets, meeting the needs of investors with different risk appetites and promoting continuous R&D of innovative drugs. Studies indicate Royalty Pharma's success benefits from the organic combination of specialized patent evaluation + securitization engineering + capital market mechanisms. For China, the Royalty Pharma model provides valuable experience—utilizing patent pool centralized management and revenue rights securitization, combined with stablecoin or central bank digital currency payment and settlement mechanisms, could potentially replicate this model in pharmaceutical industry innovation financing to achieve more efficient financing and innovation incentives.

5.2 Obstacles to Implementation in China

Despite providing a valuable paradigm, three major obstacles exist for implementing the Royalty Pharma model in China:

First, legal and regulatory obstacles: China adopts a "prohibitive" attitude toward foreign stablecoins, strictly restricting their trading and payment within the country. This creates legal barriers for the model's practical operation, as directly introducing stablecoin settlement would touch legal red lines.

Second, uncertainty in patent valuation: The securitization process involves issues such as patent authenticity and valuation stability. If underlying assets within the patent pool are declared invalid, cash flow disruption may occur, potentially causing significant investor losses and judicial litigation. This problem is particularly prominent in China, as the patent evaluation system remains underdeveloped.

Third, cross-border capital flow controls: Using foreign stablecoins in cross-border payments may trigger capital outflow and financial security risks; even with digital RMB substitution, issues such as international clearing, compliance mutual recognition, and coordination of anti-money laundering (AML) and cross-border supervision must be resolved within international regulatory frameworks.

In summary, while drawing on the Royalty Pharma model, China should focus on the compliance boundaries of financial instruments in future policies, substitute foreign stablecoins with central bank digital currency to reduce legal risks and regulatory arbitrage space, and adopt a "central bank-led + regulatory sandbox" gradual path to explore within compliant boundaries first.

5.3 Scenario Simulation: Digital RMB Pilot in China's Free Trade Zones

To demonstrate the model's potential effects, this study designs a simplified scenario simulation: assuming a "digital RMB + patent pool securitization" pilot in the Shanghai Free Trade Zone with a financing scale of RMB 100 million.

The simulation employs a simplified discounted cash flow (DCF) model:

$$PV = \sum_{t=1}^{n} \frac{CF_t}{(1+r)^t}$$

where $CF_t$ represents future licensing fee cash flows and $r$ is the discount rate.

Simulation results show that compared with traditional cross-border financing paths:
- Traditional financing discount rate $r = 6\%$; with digital RMB introduction, due to its compliance and settlement efficiency, the rate decreases to $5\%$.
- With total cash flows of RMB 100 million, the present value of financing increases by approximately 20–30%.
- Settlement cycle shortens from T+2 to T+0.5, improving capital turnover efficiency by about 20%.
- Cross-border exchange and compliance costs decrease by 1–2%, enhancing net financing returns.

Although this scenario simulation is based on assumed parameters, the results indicate that embedding digital RMB in patent securitization can effectively improve financing efficiency, reduce capital costs, and enhance cross-border payment transparency. This demonstrates the potential gains of institutional innovation in liquidity, transparency, and compliance, while providing an operational reference for future empirical research and pilot policy design on "free trade zone pilot + digital RMB internationalization."

If the "patent pool + securitization + stablecoin" model is introduced among small and medium-sized pharmaceutical enterprises in China, its potential financing effects can be projected through simulation experiments:

First, increased financing scale: Traditional pharmaceutical enterprises mostly rely on bank loans with limited financing amounts, whereas patent securitization can secure larger financing based on future licensing fees from drugs. Assuming a patent pool containing 10 new drug patents with projected future cash flows of RMB 1 billion, securitization could achieve financing of RMB 600–700 million, representing a 20–30 percentage point increase over traditional models.

Second, improved capital efficiency: Through digital RMB settlement, the settlement cycle can be shortened from T+2 to T+0.5, improving capital turnover efficiency by approximately 20%.

Third, facilitated cross-border capital flows: If cross-border payment settlement is conducted through stablecoins or digital RMB, enterprises can obtain foreign investment without relying on the U.S. dollar clearing system, reducing foreign exchange and settlement costs.

Table: Traditional Model vs. Digital RMB Model Comparison

Dimension Traditional Model (Domestic/Foreign Currency + Bank Loans) Digital RMB + Patent Pool Securitization Model Financing Discount Rate (r) 6% 5% Financing Present Value Baseline Increases by 20–30% Settlement Cycle T+2 T+0.5 Capital Turnover Efficiency Baseline Improves by ~20% Cross-Exchange Cost Baseline Decreases by 0.5–1 percentage points Compliance Transparency Bank review + foreign exchange registration Smart contracts + on-chain auditing

Table notes: The discount rate decrease stems from digital RMB's compliance and payment efficiency, reducing investor risk premiums. Present value increase results directly from the lower discount rate raising the present value of future patent pool cash flows. Capital efficiency improvement: T+2→T+0.5 significantly shortens settlement cycles. Cost reduction: decreased cross-border exchange and compliance procedures save 1–2% in costs. Transparency enhancement: on-chain settlement and smart contracts reduce information asymmetry and increase investor confidence.

6. China's Path Selection and Policy Recommendations

Based on international comparisons, China's path uniqueness primarily manifests in central bank dominance, a strict licensing and approval system, and the core positioning of digital renminbi (e-CNY). Meanwhile, Hong Kong's regulatory innovations in 2024–2025 provide a "gradual sandbox" model for comparison, with differences across the three regions forming complementary references.

6.1 Real-World Dilemmas: Insufficient SME Financing and High Regulatory Pressure

China's small and medium-sized pharmaceutical enterprises have long faced financing constraints characterized by "high investment, low collateral." Due to the lack of fixed assets and stable cash flows, traditional bank loans struggle to meet R&D investment needs, while capital market entry barriers remain high. Although patent securitization has been piloted in some regions, the scale is limited and models are singular, making it difficult to form systematic solutions due to insufficient scaled experience and inadequate institutional and market support. Simultaneously, China maintains strict regulation of virtual currencies and foreign stablecoins, prohibiting their circulation within the domestic financial system. The 2021 Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading and Speculation, issued by ten ministries and commissions, explicitly requires financial institutions and payment institutions not to directly or indirectly provide related services; the 2022 China Financial Stability Report reiterates that all digital currency issuance and trading must be approved by the People's Bank of China, thereby establishing the central bank-led regulatory logic. This "prohibition + approval" combination, while preventing financial risks, also compresses space for compliant financial innovation, constraining the possibility of using stablecoins for cross-border settlement and financing innovation.

6.2 Legal System Obstacles: Securities Law, Intellectual Property Law, and Capital Controls

First, securities law imposes strict conditions on asset securitization, requiring underlying assets to be authentic and have clear ownership rights, but the future value of pharmaceutical patents involves high uncertainty, making judicial determination difficult and challenging to meet legal requirements.

Second, although intellectual property laws have strengthened patent protection, they lack detailed rules and supporting systems for patent pledge and securitization, resulting in inadequate mechanisms for patent evaluation and transfer.

Third, foreign exchange administration regulations strictly restrict capital account convertibility, and using stablecoins for international settlement may touch the legal red line of non-convertible capital accounts.

Finally, virtual currency policy adopts a "comprehensive prohibition" approach. While beneficial for risk prevention, it highly compresses policy space for compliant stablecoins or central bank digital currencies in intellectual property financing, even in pilot environments, making it heavily dependent on institutional arrangements for the central bank digital RMB.

6.3 Central Bank Dominance and Licensing System: The Core Tone of China's Regulation

China's institutional design presents characteristics distinctly different from the United States and European Union: the U.S. and EU tend toward functional regulation or unified legislation; Hong Kong adopted a gradual sandbox in 2024–2025 emphasizing "inclusion + prudence"; while China explicitly mandates unified management by the central bank with a licensing and approval system, where digital currency issuance and circulation must rely on the digital RMB.

This path implies that any "patent pool securitization + stablecoin" model implemented in China must use digital RMB as the sole legal anchoring tool. This is not only a regulatory compliance requirement but also a strategic choice for national monetary sovereignty and financial security.

6.4 Policy Recommendations

1. Establish "Digital RMB + Patent Securitization" pilot programs. We recommend setting up pilots in the Shanghai Free Trade Zone and the Guangdong-Hong Kong-Macao Greater Bay Area to explore the "digital RMB + patent securitization" model. Using digital RMB to replace foreign stablecoins in financing and settlement mechanisms, conduct issuance and settlement of pharmaceutical patent pool securitization products through a central bank-led approval framework to reduce cross-border payment risks while accumulating experience for RMB internationalization.

2. Improve patent valuation and credit rating systems. Drawing on international experience, a national-level patent evaluation platform should be established, introducing big data and artificial intelligence technologies to enhance the objectivity and transparency of patent valuation. Simultaneously, referencing securities market credit rating systems, a tiered rating system for patent securitization products should be formed to reduce investors' risk perception costs.

3. Draw on EU functional regulation model to form a multi-tiered regulatory framework. Referencing EU MiCA's tiered regulation of Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs), implement differentiated management for different types of digital financial instruments. For central bank digital currencies, strict prudential regulation can be applied; for compliant tokens used in industrial financing, explore "regulatory sandbox" models to avoid "one-size-fits-all" approaches that stifle innovation.

4. Promote cross-border legal coordination and risk prevention. At the international level, China should actively participate in formulating international stablecoin and digital currency regulatory standards under frameworks such as the G20 and BIS, forming regulatory mutual recognition with major jurisdictions including the United States, European Union, and Japan. Particularly in cross-border payments, anti-money laundering, and investor protection, legal friction in cross-border patent securitization and digital currency applications should be reduced through international treaties or bilateral cooperation mechanisms. At the regional level, explore docking mechanisms with Hong Kong's "sandbox + approval system," achieving two-way complementarity through Greater Bay Area policy coordination: Hong Kong responsible for market-oriented experiments, mainland China responsible for compliant implementation.

6.5 Summary: The Institutional Logic of China's Characteristic Path

Overall, the institutional logic of China's path is: Central bank dominance: All digital currency pilots must be approved by the central bank; Digital RMB core: Foreign stablecoins are completely replaced by legal digital currency; Gradual innovation: Conduct pilot programs first in free trade zones and the Greater Bay Area, then gradually expand; Three-region comparison: Hong Kong's "inclusive prudence" → mainland China's "prohibition + approval," which can form complementarity. This framework both ensures financial security and opens compliant pathways for intellectual property financialization.

Table: Comparison of Stablecoin Regulatory Paths Between Mainland China and Hong Kong

Aspect Mainland China Hong Kong Regulatory Philosophy Central bank approval system Gradual sandbox system Key Policy Documents 2021 Notice, 2022 Financial Stability Report 2024 HKMA Sandbox, 2025 Formal Rules Implementation Path Prohibit foreign stablecoins → digital RMB as sole legal path Inclusive experimentation → prudent implementation

Conclusion

This study attempts systematic research in the cross-domain of "patent pool securitization + stablecoins," addressing gaps in existing literature regarding the integration of intellectual property financialization and digital currency regulation. Unlike previous research focusing primarily on the feasibility and risks of patent securitization (Yuan, 2008; Chen, 2010; Nikolic, 2009) and stablecoin risks and regulatory frameworks (Zhang & Xia, 2023; Odintsov & Zyryanova, 2022), this paper proposes an entirely new institutional framework.

In terms of academic contribution, this study constructs a logical chain of "patent pool → securitization → stablecoin settlement" based on securitization theory, intellectual property financialization theory, and monetary payment theory, and further proposes a cross-border financing tool that balances liquidity, transparency, and compliance through the integration of smart contracts and digital RMB. This framework not only expands the theoretical boundaries of intellectual property finance research but also provides new analytical perspectives for the legalization of digital currency research.

In practical contributions, this paper summarizes institutional experiences from the United States, European Union, Japan, and Hong Kong through international comparison, and proposes a localized path compatible with China's regulatory environment. Research shows that introducing stablecoin mechanisms can help alleviate liquidity shortages and cross-border payment obstacles in patent securitization, but in China, it must be centered on central bank digital RMB and promoted gradually through pilot programs. This paper is the first to propose the "stablecoin + patent pool securitization" model, providing practical institutional references for financing small and medium-sized pharmaceutical enterprises and expanding the digital RMB strategy.

Furthermore, this paper introduces a "time + space evolution framework" in institutional comparison and explores potential effects of cross-border capital flows through scenario simulations, demonstrating the application potential of interdisciplinary methods in legal and financial research. This attempt lays a methodological foundation for future in-depth analysis of intellectual property finance and industrial innovation using spatio-temporal models. Simultaneously, this study forms academic intertextuality with the authors' previous research on AI governance and fintech transformation, as well as intellectual property rule-of-law and institutional exploration, collectively constructing an interdisciplinary research trajectory covering AI governance, fintech regulation, intellectual property financialization, and industrial innovation.

Naturally, this study also has limitations. The simulation analysis lacks empirical data support, and future research should incorporate real cases or experimental platforms. The analysis of cross-border payments and legal conflicts remains relatively macroscopic, urgently requiring more detailed dimensions of judicial practice and international treaties. Future research can delve into cross-border legal coordination, risk prevention mechanisms, and multi-tiered regulatory model design to promote academic deepening and policy innovation in this field.

References

1. Zhang Xiong. "Research on Patent Pool Securitization Based on Convertible Layering Technology." DEStech Transactions on Social Science, Education and Human Science, 2019.

2. Chen Xia. "Brief Analysis of Legal Obstacles to Patent Asset Securitization." Legal System and Society, 2010(03), p. 114.

3. Odrobina, A. "Patent Pools in Light of European Union Competition Law." Ekonomia i Prawo, Vol.13, 2014, p. 523.

4. Sugardaa, P. P., & Wicaksonoab, M. R. "Balancing I.P. Rights and Competition Law through Regulation of Patent Pools in Indonesia." 2022.

5. Heckman, M. "The Strategic Use of Patents in Standardization in Relation to US, European and Chinese Competition Law." 2016.

6. Wang Yumei. "Research on Anti-Monopoly Regulation of Patent Pool Abuse." Intellectual Property, 2011(2), p. 6, China University of Political Science and Law.

7. Deng Jianpeng, Zhang Xiaming. "The Dilemma and Resolution of Blockchain Financial Judicial Governance—From the Perspective of Stablecoin-Related Judicial Documents." Wuhan University Journal (Philosophy & Social Sciences), 2023(2).

8. Steen, B., Berlin, H. Stable Patent Pools. 2004.

9. Nikolic, A. "Securitization of Patents and Its Continued Viability in Light of the Current Economic Conditions." Albany Law Journal of Science and Technology, Vol.19, 2009.

10. Zhang Xiong. "Research on Patent Pool Securitization Based on Convertible Layering Technology." In Science and Engineering Research Center. Proceedings of 2018 3rd International Conference on Education, Management and Systems Engineering (EMSE 2018), 2018, pp. 451-455.

11. Liu Yunhua, Mao Qin. "Research on Underlying Asset Risk Prevention in Different Patent Securitization Models." Journal of Nanjing University of Science and Technology (Social Sciences Edition), 2022, Vol.35(1), p. 10.

12. Deng Jianpeng, Zhang Xiaming. "Connotation, Risks and Regulatory Response of Stablecoins." Journal of Shaanxi Normal University (Philosophy and Social Sciences Edition), 2021, Vol.50(05).

13. Irsti. "Stablecoins: Legal Issues and Legal Framework." Eurasian Scientific Journal of Law, 2023, pp. 20-26.

14. U.S. Securities and Exchange Commission (SEC). Framework for "Investment Contract" Analysis of Digital Assets. SEC official website, 2019. https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets. See also: SEC Chair Gary Gensler's testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, September 14, 2021. https://www.sec.gov/news/testimony/gensler-2021-09-14.

15. U.S. Commodity Futures Trading Commission (CFTC). Digital Assets page, CFTC official website. https://www.cftc.gov/DigitalAssets/index.htm. See also: CFTC Chair Rostin Behnam's testimony before the Senate Committee on Agriculture, Nutrition, & Forestry, October 27, 2021. https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam8.

16. Financial Crimes Enforcement Network (FinCEN). Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies, May 2019. https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-certain-business-models.

17. European Commission. Markets in Crypto-Assets (MiCA) Regulation, 2023.

18. Zetzsche, D., Annunziata, F., Arner, D. & Buckley, R. "The Markets in Crypto-Assets Regulation (MiCA) and the EU Digital Finance Strategy." 2020.

19. Farkas, Á., & Moor, Ch. "Repairing the EU Banking System and the Role of Securitization." The Journal of Structured Finance, Vol.20, 2015, pp. 84–96.

20. Odintsov, S., & Zyryanova, O. "Practice and Trends of Legal Regulation of Stablecoins on the Example of USA and EU Legislation." Economic Problems and Legal Practice, 2022.

21. Financial Services Agency of Japan (FSA). Implementation Details of the Payment Services Act Amendment (released May 26, 2023, effective June 1, 2023). FSA official website. https://www.fsa.go.jp/en/newsletter/weekly2023/540.html.

22. Anderson Mori & Tomotsune Law Office. Outline of the Revised Payment Services Act—New Regulatory Framework for Stablecoins, September 2022. https://www.amt-law.com/asset/pdf/bulletins2_pdf/220927.pdf.

23. Zhang Lifei, Chen Hui, Su Mengyao. "Research on Significant Driving Factors of Patent Pool Innovation Under Different Development Stages." Science Research Management, 2021(3).

24. Semi Yulianto & B. Soewito. "Envisioning Risk Management for Smart Contracts: A Conceptual Model." 2023 International Conference on Informatics Engineering, Science & Technology (INCITEST), 2023.

25. People's Bank of China Digital Currency Research Working Group. White Paper on the Research and Development Progress of China's Digital RMB, July 16, 2021. Reprinted on Guangming Net. https://m.gmw.cn/baijia/2021-07/16/1302409955.html.

26. Iqra Mustafa, Alan Mcgibney & Susan Rea. "Smart Contract Life-Cycle Management: An Engineering Framework for the Generation of Robust and Verifiable Smart Contracts." Frontiers in Blockchain, Vol.6, 2024.

27. Wenqi Zhao, Hui Li & Yuming Yuan. "Understand Volatility of Algorithmic Stablecoin: Modeling, Verification and Empirical Analysis." 2021.

28. H. Chu, P. Zhang, H. Dong, Y. Xiao, S. Ji & W. Li. "A Survey on Smart Contract Vulnerabilities: Data Sources, Detection and Repair." Information and Software Technology, Vol.159 (2023), art. 107221.

29. Petar Tsankov et al. "Securify: Practical Security Analysis of Smart Contracts." Proceedings of the 2018 ACM SIGSAC Conference on Computer and Communications Security, 2018.

30. S. Lim & M. Suh. "Intellectual Property Business Models Using Patent Acquisition: A Case Study of Royalty Pharma Inc." Journal of Commercial Biotechnology, Vol.22, 2016. Available at: https://consensus.app/papers/intellectual-property-business-models-using-patent-lim-suh/4b347fea53e552f5b1f27f82dfe2f064/.

31. A. Lo & S. Naraharisetti. "New Financing Methods in the Biopharma Industry: A Case Study of Royalty Pharma, Inc." IRPN: Innovation & Entrepreneurship, 2013. Available at: https://consensus.app/papers/new-financing-methods-in-the-biopharma-industry-a-case-lo-naraharisetti/e3190ebe29b850728d4a6066f6990ba8/.

32. Yuan Wei. "Analysis of Feasibility of Patent Backed Securitization in Our Country." Journal of Tianjin Vocational Institutes, 2008. Available at: https://consensus.app/papers/analysis-of-feasibility-of-patent-backed-securitization-wei/ce5b765fcbf85ff1ada60a2803b38d6d/.

33. Ke Da. "Prohibitive Regulation of Virtual Currency: Legal Reflection and Institutional Optimization." East China University of Political Science and Law Journal, 2024(3).

34. Tan Yaxi. "Review of Legal Risks of Patent Securitization Underlying Asset Transfer and Improvement Paths." 2023. Available at: https://consensus.app/papers/review-of-legal-risks-of-assignment-of-patent-tan/9caf96056ced5f1790850d7aeb8c8e23/.

35. Financial Services Agency of Japan (FSA). Implementation Details of the Payment Services Act Amendment, May 26, 2023. https://www.fsa.go.jp/en/newsletter/weekly2023/540.html.

36. Huang Yifan. "The Impact of Digital RMB Promotion on China's Corporate Financial System and Policy Recommendations." International Journal of Global Economics and Management, 2024. Available at: https://consensus.app/papers/the-impact-of-digital-rmb-promotion-on-chinas-corporate-huang/db756030c94c519682b1317f463d5aee/.

37. Hu Wenhao. "Experiences and Insights from Foreign Regulation of Stablecoins: Implications for China." International Journal of Frontiers in Sociology, 2023. Available at: https://consensus.app/papers/experiences-and-insights-from-foreign-regulation-of-hu/2c7856e53de3525094148dd24a1ec5e7/.

38. Shen, W. "New Developments on Regulation of Cryptocurrency in China." Journal of Investment Compliance, 2021. Available at: https://consensus.app/papers/new-developments-on-regulation-of-cryptocurrency-in-china-shen/cedef91749d752669af7f1e8c7a21e89/.