Original author: 1912212.eth, Foresight News
No one expected that at a time when the crypto community was wailing about the lack of market innovation, what Paradigm founder Matt Huang called the stablecoin super cycle would come. Since its listing on June 5, Circle, the first stablecoin stock, has soared from $31 to over $298.99, a nearly 10-fold increase in less than half a month. Its exaggerated wealth effect once attracted people in the industry to rush to the cryptocurrency stocks for gold.
The popularity of Circle’s stock in the U.S. stock market has once again attracted the attention of the crypto community to the stablecoin market.
Stablecoins were created in 2014 to solve the problem of volatile prices of traditional cryptocurrencies. USDT, first launched by Tether, is one of the most representative stablecoins on the market. Its value is pegged to the US dollar at a 1:1 ratio, and its value is supported by US dollar asset reserves. The core concept of stablecoins is to use asset collateral to maintain the stability of the currency value, so that it has the convenience and decentralization of digital currency while avoiding the transaction risks brought by price fluctuations. In recent years, the adoption and application of stablecoins have grown exponentially, especially in cross-border payments, DeFi, RWA and other fields. DeFi has become the basic asset for lending, staking, and yield farming.
According to DefiLlama data, as of June 25, 2025, the global stablecoin market size has exceeded approximately US$252.9 billion, of which USDT accounts for more than 62% of the market share, followed by USDC, which together account for more than 85% of the market share. The on-chain transaction volume of stablecoins has reached approximately US$20.2 trillion, close to 40% of the transaction volume of global payment giant Visa, demonstrating its important position in digital payments and cross-border settlements.
The craze for stablecoins has even spread to giants in China and the United States. Since the beginning of this year, many global technology and financial giants have accelerated their layout in the field of stablecoins, setting off a wave of fierce competition. In the United States, PayPal announced that its dollar-anchored stablecoin PYUSD has been connected to the Stellar network, focusing on cross-border remittances and financing for small and medium-sized enterprises; Walmart and Amazon are also actively exploring the issuance of their own dollar-backed stablecoins, aiming to reduce payment costs and create a closed-loop consumer ecosystem; Shopify has cooperated with Coinbase and Stripe to support merchants to accept USDC payments based on the Base chain, covering consumers in 34 countries.
The Asian market is also lively. Ant International and Ant Digits, subsidiaries of Ant Group, have both applied for Hong Kong stablecoin licenses, positioning Hong Kong as their global headquarters to promote the construction of compliant digital transaction scenarios. JD CoinChain Technology expects to obtain a license in the fourth quarter of 2025 and plans to issue stablecoins anchored to the Hong Kong dollar and other currencies, focusing on cross-border payments, investment transactions and retail payment scenarios.
Stablecoins are an inevitable trend
Why do Chinese and American giants choose to enter the stablecoin market at the same time? Is it a sudden trend or a strategic layout after careful consideration?
Fast, low-friction, natural payment tool
The traditional financial system faces many challenges in the digital economy era, especially in terms of cross-border payments, fund clearing and real-time settlement. It is inefficient and difficult to meet the needs of rapid globalization and digital development. The traditional banking system relies on multiple intermediaries and cumbersome processes, resulting in cross-border transfers usually taking several days and high fees, which seriously restricts the liquidity and efficiency of funds. In addition, traditional financial institutions need to redesign their business processes and product services during the digital transformation process. Many users suffer from bank card limits or even freezes due to policy factors.
In contrast, stablecoins supported by blockchain technology have become a more efficient and flexible digital cash in the digital age due to their value anchored to legal tender and stable prices. Stablecoins can achieve fund transfers without intermediaries and within seconds, greatly reducing transaction costs and time costs, and improving fund utilization.
Imagine that you need to transfer millions of dollars to a friend in the United States. The other party only needs to provide you with a string of code numbers, and within minutes, your money will be transferred to the other partys account, and the handling fee is less than $1. There is no limit, no freeze, no huge handling fee, no financial proof required, and no waiting time of several days. This feature has absolute advantages in areas such as cross-border payments.
In stark contrast, the arrogance of banks is everywhere. SIG partner Michael Yuan recently expressed his unpleasant experience at DBS Bank in Singapore: I was questioned for accepting a 200 yuan bank transfer. For 1,000 US dollars, the bank asked me to take my passport to the bank headquarters, and I was questioned by the front desk again.
Social news about many users in mainland China being asked various questions by banks when withdrawing money and being required to provide various certificates before being granted access has frequently become a hot topic.
Stablecoins are programmable, which facilitates deep integration with innovative applications such as DeFi, and supports multi-scenario applications such as cross-border payments, supply chain finance, and retail consumption. Studies have shown that after replacing physical cash, stablecoins can not only maintain the credit intermediary function of the financial system, but may also promote an increase in credit supply and promote the digital upgrade of the financial system. Therefore, stablecoins are gradually becoming an important bridge connecting traditional finance and emerging digital finance in the digital economy era.
The battle for digital supremacy: onshore vs offshore
China, the United States and global giants have entered the field of stablecoins. One of the profound driving forces behind this is the struggle for digital hegemony. U.S. Treasury Secretary Benson made it clear at a Senate hearing in June 2025 that stablecoins, especially those pegged to the U.S. dollar, will become an important tool to consolidate the position of the U.S. dollar in the global financial system. Against this background, some analysts expect the market value of its stablecoins to reach $2 trillion or even higher in the future.
On June 19, Bessant even tweeted again, Cryptocurrency does not pose a threat to the US dollar. In fact, stablecoins can consolidate the hegemony of the US dollar. Digital assets are one of the most important phenomena in the world today, but they have long been ignored by governments. This administration is committed to making the United States a center for digital asset innovation, and the GENIUS Act brings us one step closer to this goal.
The US government has promoted the Genius Act to establish a federal regulatory framework for stablecoins, aiming to strengthen the dollars international reserve currency status and prevent other countries or digital currencies from challenging the dollars hegemony. At the same time, retail giants such as Walmart and Amazon are also actively deploying stablecoins, trying to bypass traditional payment networks such as Visa and MasterCard, save billions of dollars in fees, and achieve instant settlement, thereby competing for greater voice and market share in the global payment system.
American giants on the other side of the ocean are busy planning for stablecoins, and mainland China and Hong Kong are also stepping up research on stablecoins to open the door.
At the 2025 Lujiazui Forum, Pan Gongsheng, governor of the central bank, announced the establishment of a digital RMB international operations center and launched a pilot program for comprehensive reform of offshore trade financial services in the Lingang New Area of Shanghai. He also said that new technologies such as blockchain and distributed ledgers have promoted the vigorous development of the central banks digital currency stablecoin, achieved payment and settlement to reshape the traditional payment system from the bottom up, and significantly shortened the cross-border payment chain.
This layout is not only a reflection of technological innovation, but also a strategic game around the dominance of digital currency and the right to formulate global financial rules. It reflects the deep-seated motivations of Chinese and American giants to seize the initiative in the field of stablecoins and maintain or challenge the existing monetary system.
Wang Yongli, former vice president of the Bank of China, pointed out in an article that the United States has passed legislation to protect and support the mining and trading of crypto assets and even become a national strategic reserve, support the legal operation of US dollar stablecoins, actively seize the commanding heights in the field of crypto assets and stablecoins, and enhance the demand for US Treasury bonds and the international influence of the US dollar. It has significant and far-reaching strategic significance, and China needs to pay full attention and actively respond. Li Yang, member of the Academic Division of the Chinese Academy of Social Sciences and chairman of the National Finance and Development Laboratory, said that on the one hand, since any form of stablecoin cannot avoid the issue of monetary sovereignty, firmly promoting the internationalization of the RMB is still the core task of cultivating a strong currency (RMB). On the other hand, it must be seen that the integration and development trend of stablecoins, cryptocurrencies and traditional financial systems will be difficult to reverse. Stablecoins and cryptocurrencies will achieve complementary development with central bank digital currencies, comprehensively improve payment efficiency and reduce payment costs, and reconstruct the global payment system.
As a test field for mainland China, the Hong Kong Stablecoin Ordinance has been confirmed to become a law and will take effect on August 1 this year. Its main purpose is to regulate activities involving stablecoins and establish a licensing system for regulated stablecoin activities in Hong Kong. The Secretary for Financial Services and the Treasury, Paul Chan, said, After the Ordinance comes into effect, the licensing system will provide appropriate regulations for related stablecoin activities and will be a milestone in promoting the sustainable development of Hong Kongs stablecoin and digital asset ecosystem.
In general, the US strategy aims to use market power and innovation to consolidate the dollars hegemony in the global digital economy by embracing US dollar stablecoins (such as USDC and PYUSD) issued by the private sector and bringing them under regulation. Chinas strategy is in the mainland, with the core being the central bank-led digital renminbi (CBDC). Allowing Ant and JD.com to apply for licenses in Hong Kong is more about using Hong Kong as a test field and firewall to explore offshore models for the internationalization of the renminbi and digital finance, and to serve international trade scenarios such as the Belt and Road Initiative. Its essence is offshore exploration.
The regulatory path is becoming clearer
Since Trump took office, the United States has been highly anticipated for its friendliness to the crypto market. The heads of various government departments are also crypto-friendly people holding important positions. There are also constant actions in the field of stablecoins. On June 17, 2025, the U.S. Senate passed the Guidance and Establishment of a National Innovation Act for Stablecoins in the United States (Genius Act) by 68 votes to 30, marking the first time the United States has approved major cryptocurrency legislation. The bill establishes a federal regulatory framework for dollar-pegged stablecoins, requiring issuers to hold 1:1 reserve assets, comply with anti-money laundering regulations, and disclose reserve details on a monthly basis, aiming to enhance market transparency and consumer protection, while stimulating demand for U.S. short-term Treasury bonds and consolidating the global status of the U.S. dollar. On June 24, Senator Hagerty said in an interview with well-known KOLscottmelker that Trump was ready to sign the Genius Act, which may soon be delivered to his desk.
David Sacks, the White Houses director of cryptocurrency and artificial intelligence and the crypto czar, said in an interview with FOX that the passage of the Genius Act is a major victory for the crypto community. Some people in the crypto community analyzed that this bill may push the stablecoin market to $2 trillion by 2028.
On May 21, 2025, Hong Kong passed the Stablecoin Bill, establishing the worlds first comprehensive regulatory framework for fiat stablecoins. Through the principle of value anchoring regulation, issuers are required to hold a license and maintain highly liquid reserve assets, attracting companies such as Ant and JD.com to deploy. The improvement of supervision in both places has reduced policy risks and significantly promoted financial innovation and compliance development.
Competition between Chinese and American corporate giants
In June this year, Liu Qiangdong, chairman of the board of directors of JD.com Group, said that JD.com hopes to apply for stablecoin licenses in all major currency countries in the world, and then use the stablecoin licenses to realize exchange between global companies, reduce global cross-border payment costs by 90%, and increase efficiency to within 10 seconds. At the same time, JD.com expects to obtain a license in the early fourth quarter of this year and launch the JD.com stablecoin at the same time.
In the same month, Bian Zhuoqun, vice president of Ant Group and president of Ant Digits’ blockchain business, revealed that Ant Digits has started applying for a Hong Kong stablecoin license and has conducted multiple rounds of communication with regulators. Ant Digits has listed Hong Kong as its global headquarters this year and has completed a pilot test of the regulatory sandbox in Hong Kong. JD.com, which has been making frequent moves recently, had planned to issue a stablecoin anchored to the Hong Kong dollar at a 1:1 ratio in Hong Kong as early as last year. In May 2025, Liu Peng, CEO of JD.com Coin Chain Technology, announced the progress of JD.com’s stablecoin. “The first phase of JD.com’s stablecoin is tentatively scheduled to be issued with stablecoins anchored to the Hong Kong dollar and the US dollar. The test scenarios mainly include cross-border payments, investment transactions, retail payments, etc.” Later, Liu Peng also said, “JD.com’s self-operated e-commerce in Hong Kong and Macau will soon support stablecoin shopping.”
In terms of business scenario expansion, JD Stablecoin focuses on two major scenarios: cross-border payment and supply chain finance. In cross-border payment, JD cooperates with Visa to launch a linked card, which reduces the settlement cost from 6% of SWIFT to 0.1%, and shortens the time from 3 days to 10 seconds. The goal is to occupy 10%-15% of the global cross-border payment market in 2028. In addition, JD is exploring offshore RMB stablecoin (JD-CNH) to connect with the Belt and Road trade settlement and replace the SWIFT system.
Chinese Internet companies are embarking on a road of exploration, but the ambitions of US financial giants such as Visa actually began as early as 2020, but they withdrew from the Facebook-led Libra (now Diem) project due to regulatory uncertainty in the early stages.
With the gradual implementation of regulatory frameworks such as the US Genius Act, Visa adjusted its strategy and turned to cooperation with regulated stablecoin issuers. In 2025, Visa officially joined the Global Dollar Network (USDG) stablecoin alliance initiated by blockchain company Paxos, becoming the first traditional financial institution to participate in the alliance. This means that Visa indirectly obtains legal support for the issuance and settlement of stablecoins through alliance membership under the compliance framework. In addition, Visa also cooperated with African cryptocurrency exchange Yellow Card to promote stablecoin payments in Central and Eastern Europe, the Middle East and Africa (CEMEA).
Visas technology layout focuses on the seamless integration of stablecoins with existing payment systems. In 2023, Visa took the lead in supporting USDC stablecoin settlement, becoming the first global payment network to introduce stablecoins into the core clearing system. Its technical architecture is connected to the on-chain smart contract through Visa Token Service, so that stablecoin payments can be embedded in business processes such as automatic settlement and account splitting. For example, Visas cross-border payment API already supports real-time settlement of stablecoins, shortening the arrival time of traditional cross-border payments from several days to seconds, and reducing costs to less than 0.1%.
Ants predecessor, PayPal, has also long been involved in stablecoins. Since its debut on the Ethereum mainnet in August 2023, PayPal USD (PYUSD) has rapidly evolved from a peer-to-peer experiment to a multi-chain, enterprise-level payment tool. The stablecoin was developed in collaboration between PayPal and Paxos Trust Company, and is 100% collateralized by U.S. dollar deposits, short-term U.S. Treasury bonds, and similar cash equivalents; Paxos regularly issues reserve audit reports to ensure reserve transparency and regulatory compliance. From the outset, PayPal enabled users to seamlessly deposit and withdraw funds between PayPal and Venmo balances and Ethereum-based wallets, truly integrating traditional payment channels with decentralized financial channels, and providing near real-time settlement and global coverage.
In May 2024, PayPal announced that PYUSD will be launched on the Solana blockchain, aiming to leverage Solanas sub-second certainty and extremely low transaction fees to achieve faster and lower-cost transfers. Major wallets and deposit channel providers such as Crypto.com, Phantom and Paxos were the first to access and help users obtain PYUSD on the Solana chain.
This move not only broadens the application of the stablecoin in retail payments and cross-border remittances, but also attracts developers to integrate PYUSD into acquiring systems, DeFi protocols, and Web3 applications. As of June 2025, the issuance of PYUSD on the Solana network exceeded US$300 million. In the future, PayPal plans to expand PYUSD support to more Layer 2 networks and public chains, and continue to optimize smart contract functions to meet the diverse needs of merchants.
Interestingly, Wall Street giants are not far behind. In 2019, JPMorgan launched JPMCoin for internal use for institutional clients, which is used for cross-border payments and clearing within the bank. The average daily transaction volume is about 1 billion US dollars, highlighting its high-frequency application value in institutional scenarios. However, JPMCoin is limited to Morgans internal network and is not circulated on the public chain.
In mid-June 2025, JPMorgan announced the launch of the JPMD deposit token based on the Coinbase Layer 2 network Base. Unlike traditional stablecoins, JPMD represents actual bank deposits and plans to include federal deposit insurance. It aims to provide institutional clients with compliant, auditable digital deposit certificates while following strict KYC/AML processes to support near real-time 24/7 settlement and liquidity management.
It is not difficult to see that these giants that have formed a monopoly in the Internet and financial fields have all entered the market and set their sights on the new track of stablecoins.
summary
In the future, the mission of stablecoins is to accelerate the transformation of cross-border payments, break the monopoly of traditional banks and SWIFT, achieve 24/7 real-time arrival and global capital flow with close to zero cost, and become a core tool for remittances and international trade settlements in developing countries. Stablecoins will not only be a subset of cryptocurrencies, but may also become a key force in reconstructing the global monetary order and financial infrastructure.
However, stablecoins are unlikely to completely replace traditional payment systems. Instead, they will gradually reconstruct the value circulation path with lower costs, stronger programmability and global connectivity. In the short term, stablecoins will nested replace traditional payment systems in some scenarios, such as cross-border e-commerce, freelance settlement, game advertising payments, etc. In the medium and long term, stablecoins are expected to form a new generation of on-chain payment and clearing infrastructure, dual-track parallel with the traditional system, and even gradually replace the traditional payment system in some scenarios. In the long run, stablecoins will become an important pole of global payment infrastructure. Alex Zuo, senior vice president of Cobo and head of stablecoin business, told Foresight News.
However, the risks faced by many companies after entering the stablecoin market cannot be ignored. Liu Honglin, a lawyer at Shanghai Mankiw Law Firm, told Foresight News that the issuance of stablecoins is a dialogue about governance structure, risk control boundaries and supervision.
First, the initial structural planning must be clear. In Hong Kong, the operation path that complies with the Stablecoin Ordinance is designed from the beginning, including license application, reserve trust structure, information disclosure system and director compliance review. The route of issuance first and compliance later must not be taken. The HKMA explicitly prohibits the issuance of coins without a license.
Second, the compliance budget should be fully reserved. Stablecoins are not asset-light projects. Reserve custody, audit report preparation, IT system security testing, daily operations and legal compliance personnel are all long-term expenses. It is recommended to set up a special compliance budget pool and set up a third-party risk control mechanism, such as regular external reviews.
Third, a neutral corporate governance system must be established. Avoid structural defects such as the parent companys absolute control over the issuer, the lack of independence of directors, and the lack of internal review processes for major matters. The HKMA has clear precedents for rejecting non-transparent beneficial owners and non-segregated governance.
As ordinary users, in order to avoid the lessons learned from the collapse of UST, users need to pay attention not only to the design of the project mechanism, but also to whether its repayment commitment is credible. Although Hong Kong and the United States are constantly introducing regulatory measures, retail investors still need to keep their eyes open when choosing stablecoin asset allocation to avoid losses. The core of stablecoins is not whether the technical means are innovative. Payment design can prevent systemic risks, but it does not mean that risks are eliminated, said lawyer Liu Honglin.
