1. Basic Overview of the Stablecoin Track

From a scale and structure perspective, stablecoins are experiencing a triple inflection point in terms of volume, price, and usage. The first is regarding volume: Since the third quarter of 2025, authoritative and industry media outlets have consistently projected a range of "approaching or first exceeding $300 billion," while the capital markets industry association AFME, in its September report, used a more cautious $286 billion as its anchor. This discrepancy stems primarily from different statistical windows and inclusion criteria, but the trend of "returning to and exceeding historical highs" is undeniable. AFME further notes that US dollar-denominated stablecoins account for 99.5%, pushing the structural certainty of "unipolar dollarization" to a historical peak. Meanwhile, FN London, a subsidiary of the Financial Times, analyzes the issuer landscape and demonstrates the long-term market share and liquidity duopoly of USDT and USDC. Their combined share has remained in the 70–80% range across various metric and timeframes, solidifying the USD stablecoin's anchoring power within the on-chain funding curve and quotation system. The second aspect is "use": cross-border settlement/remittances and B2B funds transfers have become the strongest drivers of real-world adoption. Morgan Stanley Investment Management revealed that by 2024, cross-border stablecoin payments in Turkey alone will exceed $63 billion, with India, Nigeria, and Indonesia all joining the ranks of high-adoption countries. This demand is not simply a "circulation within the cryptocurrency world," but rather a systematic alternative to the friction and uncertainty of traditional cross-border finance. Furthermore, Visa's latest white paper extends the technical scope of stablecoins from "payments" to "cross-border credit/on-chain credit infrastructure," emphasizing that the combination of programmable cash and smart contracts will usher in an automated, low-friction, and highly verifiable global lending lifecycle from "matchmaking-contracting-performance-clearance." This means that the marginal value of stablecoins will shift from "reducing cross-border payment costs" to "rewriting the cross-border credit production function." The third aspect is the "price" level (i.e., efficiency and financial conditions): Ethereum L2 (such as Base) and high-performance public chains (such as Solana) have established a "last mile" clearing network with lower latency and lower fees. Combined with compliant RWAs and tokenized asset pools of short-term government bonds, stablecoins are not only "transferable US dollars" but also "re-pledgeable and accessible to the funding curve," thereby reducing the capital turnover radius and maximizing turnover efficiency per unit time. These three factors have jointly driven the paradigm shift from cyclical rebound to structural penetration: increasing market capitalization, strengthening the US dollar anchor, and deepening the use cases. Furthermore, through greater capital reuse, stablecoins have been upgraded from a "matching medium" to a "foundation for working capital and credit generation." On this curve, short-term public opinion or individual incidents (such as the rapid rollback of some stablecoins after they were mistakenly over-minted in internal transfers in recent months) serve more as stress tests for "risk management and audit visualization" and do not change the main trend: historical highs at the total level, extreme value of the US dollar at the structural level, and the extension from "payment" to "credit" at the usage level.

In terms of driving forces, the demand and supply sides have formed a hyperbolic superposition of "realistic demand x regulatory dividends," reinforcing the aforementioned triple surge in volume. The demand side stems primarily from the rigid demand for "currency substitution" in emerging markets. Against the backdrop of high inflation and depreciation, the spontaneous adoption of the on-chain US dollar as a "hard currency" and settlement medium has become increasingly pronounced. Joint observations by Morgan Stanley and Chainalysis show that bottom-up cross-border payments/remittances have become the fastest-growing market for stablecoins, exhibiting a typical countercyclical characteristic: "the more volatile, the greater the volume." Secondly, the demand side stems from the working capital efficiency constraints of global enterprises. Cross-border e-commerce, foreign trade, overseas platforms, and the developer economy all require T+0/minute-level settlement and low rejection certainty. Therefore, stablecoins have become a "second rail" to replace SWIFT/correspondent banking networks. The technological dividends of multi-chain parallelization and Layer 2 adoption are driving down "last mile" costs. Cross-border settlement/remittances, B2B payments, and fund pool turnover have become the strongest use cases for "real-world adoption." The supply side is mainly reflected in the regulatory dividend curve: the U.S. "GENIUS Act" was signed into law on July 18, 2025, establishing a unified bottom line for stablecoin regulation at the federal level for the first time, and rigidly requiring 100% high-liquidity reserves (US dollars or short-term U.S. bonds, etc.) and monthly reserve disclosure, and clarifying redemption, custody, supervision and law enforcement powers, which is equivalent to writing "safety-transparency-redeemability" into the strong constraints of regulations; Hong Kong's "Stablecoin Ordinance" will be implemented from August 1, 2025, establishing a licensing framework and activity boundaries. The HKMA has issued supporting pages and detailed rules to ensure the penetration management of reserve quality, redemption mechanism and risk control; the EU MiCA will enter the applicable period in batches from the end of 2024. At the same time, ESMA has successively issued the second and third-level regulatory technical standards and knowledge/competency guidelines, marking that Europe has included stablecoins in the "financial infrastructure level" prudential supervision system. Clarifying regulations has two consequences: First, it significantly reduces compliance uncertainty and cross-border compliance costs for issuers, clearing networks, and merchant acceptance, leading to a continuous decrease in friction for real-world adoption. Second, it shifts the industry's risk-return-scale equation, internalizing externalities such as reserve security and information disclosure as compliance costs, thereby raising barriers to entry and accelerating the growth of the strong. Combined with the advancements in public blockchain technology (L2 adoption/high-TPS chains) and the RWA funding curve (short-term debt tokenization/money market fund on-chain), stablecoins have evolved from a gateway to cross-border payments to a foundation for cross-border credit and on-chain capital markets. Visa's latest white paper explicitly states that stablecoins will become the foundational layer of a "global credit ecosystem." The automated capabilities of smart contracts in pre-loan matching, mid-loan monitoring, and post-loan clearing and disposal mean that the generation, circulation, and pricing of credit will shift from manual processes and vouchers to those based on code and data. This also explains why, at a time when total volume is hitting record highs and the structure is extremely dollarized, the industry's logic has shifted from a "cyclical rebound" to a "structural penetration." In this process, the three arrows of the U.S. federal anchor, Hong Kong licensing implementation, and EU MiCA implementation were launched simultaneously, forming a cross-continental institutional synergy, which upgraded the global expansion of stablecoins from a "commercial phenomenon" to a systematic project of "policy and financial infrastructure coordination", and provided a reliable, auditable, and composable underlying cash and settlement layer for subsequent more complex trade finance modules such as cross-border credit, accounts receivable securitization, inventory financing, and factoring.

2. Trends and Analysis of US Dollar Stablecoins

In the global stablecoin landscape, the US dollar stablecoin is more than just a market product; it is a key fulcrum deeply embedded in national interests and geo-financial strategy. The underlying logic can be understood from three perspectives: maintaining dollar hegemony, easing fiscal pressure, and leading global rule-making. First, dollar stablecoins have become a new lever for maintaining the dollar's international status. Traditionally, the dollar's hegemony relied on its reserve currency status, the SWIFT system, and the petrodollar mechanism. However, over the past decade, the global trend of "de-dollarization," while slow, has steadily eroded the dollar's settlement share and reserve weight. Against this backdrop, the expansion of dollar stablecoins offers an asymmetric path, bypassing sovereign monetary systems and capital controls to directly transmit the dollar's value proposition to end users. Whether in high-inflation economies like Venezuela and Argentina or in cross-border trade scenarios in Africa and Southeast Asia, stablecoins have essentially become the "on-chain dollar" actively chosen by residents and businesses, penetrating local financial systems in a low-cost and low-friction manner. This penetration occurs without military or geopolitical tools, but rather through market-driven "digital dollarization," thereby expanding the reach of the dollar ecosystem. As JPMorgan's latest research points out, the expansion of stablecoins may bring an additional $1.4 trillion in structural demand for the US dollar by 2027, effectively offsetting part of the "de-dollarization" trend, which means that the United States has achieved a low-cost extension of its monetary hegemony through stablecoins.

Secondly, dollar-denominated stablecoins have become a significant new buyer of US Treasury bonds at the fiscal and financial levels. While global demand for US Treasury bonds remains strong, the continued expansion of fiscal deficits and volatile interest rates are placing long-term pressure on the US government's financing. The issuance mechanism of stablecoins is inherently tied to the need for highly liquid reserves. Under the explicit requirement of the GENIUS Act, these reserves must primarily consist of short-term US Treasury bonds or cash equivalents. This means that as the market capitalization of stablecoins gradually expands from hundreds of billions of dollars to trillions of dollars in the future, the reserve assets behind them will become a stable and growing buying force in the US Treasury market, acting as a quasi-central bank buyer. This will not only improve the maturity structure of US Treasury bonds but also potentially lower overall financing costs, providing a new "structural fulcrum" for US fiscal policy. Modeling by multiple research institutions has indicated that the potential size of stablecoins could reach $1.6 trillion by 2030, creating hundreds of billions of dollars in incremental demand for US Treasury bonds. Finally, the US has achieved a strategic shift from "suppression" to "co-optation" at the rulemaking level. Early regulatory responses to stablecoins were unfriendly, with lawmakers concerned about the threat they posed to monetary policy and financial stability. However, as the market continued to expand, the US quickly realized that it could not stifle this trend through suppression and instead adopted a "title confirmation-regulation-co-optation" model. The landmark GENIUS Act, which officially came into effect in July 2025, established a unified federal regulatory framework. The act not only imposes mandatory requirements on reserve quality, liquidity, and transparency, but also clarifies the legality of both bank and non-bank issuance channels. It also incorporates hard compliance constraints such as AML/KYC, redemption mechanisms, and custodial responsibilities to ensure that stablecoin operations remain within controllable boundaries. More importantly, the act gives the US a first-mover advantage in international standard-setting. Leveraging the exemplary effect of federal legislation, the US will be able to export its stablecoin regulatory logic to future multilateral forums such as the G20, the IMF, and the BIS, ensuring that US dollar-denominated stablecoins not only dominate the market but also become the institutional "default standard."

In summary, the US strategic logic regarding the US dollar stablecoin reflects a three-pronged approach: From an international monetary perspective, stablecoins are an extension of the digital dollar, effectively maintaining and expanding US dollar hegemony at a low cost. From a fiscal and financial perspective, stablecoins create new long-term buying opportunities in the US Treasury market, alleviating fiscal pressure. From a regulatory perspective, the US has implemented the GENIUS Act to establish and incorporate stablecoins, ensuring its dominant voice in the future global digital financial order. These three strategic pillars not only complement each other but also resonate in practice. When the market capitalization of US dollar stablecoins expands to trillions of dollars, it will not only strengthen the US dollar's international currency status, but also support the sustainability of domestic fiscal financing, and establish global standards at the legal and regulatory levels. This combined effect of "institutional priority" and "network first-mover advantage" makes US dollar stablecoins not only a market product but also a crucial tool for extending US national interests. This competitive advantage will persist in the future global stablecoin landscape. While non-US dollar stablecoins may have some room for development in regional markets, they are unlikely to challenge the core position of US dollar stablecoins in the short term. In other words, the future of stablecoins is not only a market choice for digital finance, but also a monetary strategy under the game between major powers, and the United States has obviously occupied the commanding heights in this game.

3. Trends and Analysis of Non-USD Stablecoins

The overall landscape of non-USD stablecoins is exhibiting a typical pattern of "global weakness and local strength." Back in 2018, their market share approached 49%, nearly reaching parity with USD stablecoins. However, in just a few years, this share has plummeted to less than 1%, with industry data platform RWA.xyz even estimating an extremely low trough of 0.18%. Euro-denominated stablecoins are the only ones with visible absolute scale, with a total market capitalization of approximately $456 million, dominating the vast majority of the non-USD stablecoin market. Stablecoins in other currencies, such as those in Asia and Australia, are still in the early stages or pilot phases. Meanwhile, a September report by AFME, the European Union's capital markets industry association, noted that USD stablecoins have reached a 99.5% market share, meaning that global on-chain liquidity is almost entirely tied to a single USD source. This excessive concentration poses structural risks. In the event of an extreme regulatory, technological, or credit shock in the United States, spillover effects would quickly transmit to global markets through the settlement layer. Therefore, promoting non-USD stablecoins is not simply a commercial competition, but a strategic imperative to maintain systemic resilience and monetary sovereignty.

Among non-dollar stablecoins, the Eurozone is at the forefront. The implementation of the EU's MiCA regulation provides unprecedented legal certainty for the issuance and circulation of stablecoins. Circle announced that its USDC/EURC products are fully compliant with MiCA requirements and is actively pursuing a multi-chain deployment strategy. This has driven triple-digit growth in the market capitalization of Euro stablecoins by 2025, with EURC alone surging 155%, from $117 million at the beginning of the year to $298 million. While still significantly smaller in absolute terms than USD stablecoins, the growth momentum is clear. The EU Parliament, ESMA, and the ECB are intensively rolling out technical standards and regulatory rules, imposing strict requirements for issuance, redemption, and reserves, gradually building a compliant cold-start ecosystem. Australia's approach differs from the Eurozone's, favoring a more top-down experimentation led by traditional banks. ANZ and NAB, two of the Big Four banks, have launched A$DC and AUDN, respectively. In the retail market, licensed payment company AUDD is filling the gap, focusing on cross-border payments and efficiency optimization. However, overall development remains at the pilot stage with small institutions and scenarios, and has yet to achieve large-scale retail adoption. The biggest uncertainty lies in the lack of a unified national legal framework. The Reserve Bank of Australia (RBA) is actively researching a digital Australian dollar (CBDC), which, once officially launched, could displace or even squeeze existing private stablecoins. If regulation is relaxed in the future, the Australian dollar stablecoin, leveraging its dual advantages of bank backing and retail payment applications, has the potential for rapid replication. However, whether it will replace or complement CBDC remains an unresolved issue. The South Korean market presents a paradox: despite the country's overall strong acceptance of crypto assets, stablecoin development has almost stagnated. The key lies in a significant legislative delay, with legislation not expected to take effect until 2027 at the earliest, leading chaebols and large internet platforms to adopt a wait-and-see approach. Furthermore, regulatory support for "controllable private blockchains" and the scarcity and low yields of the domestic short-term government bond market pose dual constraints to issuers in terms of profit models and commercial incentives. Hong Kong is a rare example of a country where regulations are ahead of the curve. In May 2025, the Hong Kong Legislative Council passed the Stablecoin Ordinance, which officially came into effect on August 1, making it the first major financial center in the world to introduce a comprehensive stablecoin regulatory framework. The Hong Kong Monetary Authority subsequently released detailed implementation rules, clarifying the compliance boundaries between the Hong Kong dollar peg and domestic issuance. However, while the system was being developed, the market experienced a cooling effect. Some Chinese institutions, facing the cautious approach of mainland regulators, opted for a low-key approach or postponed their applications, leading to a cooling of market enthusiasm. Regulators are expected to issue a very small number of initial licenses by the end of 2025 or early 2026, conducting a rolling pilot program based on a "prudent pace and gradual liberalization" approach. This means that while Hong Kong boasts the advantages of being an international financial hub and having advanced regulations, its development pace is constrained by mainland China's cross-border capital controls and risk isolation measures, leaving the breadth and speed of market expansion uncertain. Japan, on the other hand, has taken a unique approach in institutional design, becoming an innovative model for "trust-based strong regulation." Through the Revised Funding Settlement Act, Japan established a regulatory model of "trust custody + licensed financial institutions as the lead," ensuring that stablecoins operate within a fully compliant framework. In the fall of 2025, JPYC was approved as the first compliant Japanese yen stablecoin, issued by Mitsubishi UFJ Trust's Progmat Coin platform, with a planned issuance of 1 trillion yen over three years. Its reserve assets are anchored to Bank of Japan deposits and government bonds (JGBs), aiming to connect with cross-border remittances, corporate settlements, and the DeFi ecosystem.

Overall, the current state of non-USD stablecoin development can be summarized as "overall difficulties and local differentiation." Globally, the extreme concentration of USD-denominated stablecoins has squeezed the space for other currencies, significantly shrinking the share of non-USD stablecoins. However, regionally, the euro and yen represent a long-term approach of "sovereignty and compliance certainty," promising differentiated competitiveness in cross-border payments and trade finance. Hong Kong maintains a unique position, leveraging its status as a financial hub and advanced institutional framework. Australia and South Korea are still in a phase of exploration and observation, and whether they can achieve rapid breakthroughs depends on the legal framework and the positioning of their CBDCs. In the future stablecoin ecosystem, non-USD stablecoins may not necessarily challenge the dollar's dominance, but their existence inherently holds strategic significance: they can serve as a buffer and backup plan against systemic risks and help countries maintain monetary sovereignty in the digital age.

IV. Investment Prospects and Risks

The investment philosophy behind stablecoins is undergoing a profound paradigm shift, from the previous "coin-centric" approach centered around token price and market share to a "cash flow and rules-centric" framework anchored by cash flow, institutions, and rules. This shift represents not only an upgrade in investment perspectives but also an inevitable requirement for the entire industry as it transitions from a crypto-native phase to a more integrated financial infrastructure. From a stratified perspective, the most direct beneficiary is undoubtedly the issuer. With the implementation of the GENIUS Act in the United States, the EU's MiCA, and Hong Kong's Stablecoin Ordinance, stablecoin issuers, custodians, auditors, and reserve managers have gained clear compliance pathways and institutional safeguards. While mandatory reserve requirements and monthly information disclosures increase operating costs, they also raise the barrier to entry, accelerating industry concentration and strengthening the scale advantages of leading issuers. This means that leading institutions can achieve stable cash flow through interest rate spreads, reserve asset allocation, and compliance dividends, fostering a "stronger, stronger" landscape.

Beyond issuers, settlement and merchant acceptance networks will be the next key investment areas. Those who can pioneer the large-scale integration of stablecoins into enterprise ERP systems and cross-border payment networks will be able to build sustainable cash flows through payment commissions, settlement fees, and working capital management services. The potential of stablecoins extends beyond on-chain exchange; it lies in their ability to become an "everyday monetary tool" in business operations. Once this integration is achieved, it will unlock long-term, predictable cash flows, similar to the moat established by payment network companies. Another area worth focusing on is the tokenization of real-world assets (RWAs) and short-term debt. As stablecoins scale, reserve funds will inevitably require finding yield-generating channels. Tokenizing short-term government bonds and money market funds not only meets reserve compliance requirements but also builds an efficient bridge between stablecoins and traditional financial markets. Ultimately, a closed loop between stablecoins, short-term debt tokens, and funding markets is expected to emerge, further maturing the overall on-chain USD liquidity curve. Furthermore, compliance technology and on-chain identity management are also areas worth exploring. The US GENIUS Act, the EU MiCA, and the Hong Kong Ordinance all emphasize the importance of Know Your Customer (KYC), Anti-Money Laundering (AML), and blacklist management, signaling an industry consensus on a "regulatory, open public blockchain." Technology companies providing on-chain identity and compliance modules will play a crucial role in the future stablecoin ecosystem. Regionally, the US market undoubtedly boasts the largest scale dividend. The US dollar's first-mover advantage and the clarity of federal legislation are making it possible for banks, payment giants, and even technology companies to dive deeply into the stablecoin market. Investment targets include both issuers and financial infrastructure builders. Opportunities in the EU lie in institutional-grade B2B settlement and the euro-denominated DeFi ecosystem. The MiCA compliance framework and the promise of a digital euro are shaping a market centered on "soundness and compliance." Hong Kong, with its institutional advantages of first-come, first-served certification and international resources, is poised to become a bridgehead for offshore RMB, Hong Kong dollar, and cross-border asset allocation. Especially with the discreet advancement of Chinese institutions, foreign and local financial institutions may enjoy faster access. Japan has established a highly secure model through a "trust-based, strong regulatory" model. If JPYC and its subsequent products can reach a trillion-yen issuance scale, it could potentially alter the supply and demand structure of certain JGB maturities. Australia and South Korea are still in the exploratory phase, with investment opportunities primarily arising from small-scale pilots and the window of opportunity following the release of policy dividends. Regarding valuation and pricing frameworks, the issuer's revenue model can be simplified as interest income from reserve assets multiplied by AUM, adjusted based on the commission ratio and incentive costs. Scale, interest rate spreads, redemption rates, and compliance costs are key factors in determining profitability. Revenue from the settlement and acceptance network primarily comes from payment commissions, settlement fees, and financial value-added. Key variables include merchant density, ERP integration depth, and compliance loss rate. Revenue from the on-chain funding market is directly related to net interest margin, programmable credit stock, and risk-adjusted return on capital. Key factors lie in the stability of the asset source and the efficiency of default resolution.

However, the risks of the stablecoin sector should not be ignored. The core risk lies in systemic concentration. Currently, US dollar-denominated stablecoins account for a staggering 99.5% of the market, making global on-chain liquidity almost entirely dependent on a single USD point. A major legislative reversal, regulatory tightening, or technical event in the US could trigger a global deleveraging chain reaction. The risk of regulatory repricing also exists. Even with the US GENIUS Act, its implementation details and cross-agency coordination could still alter the cost curve and boundaries of non-bank issuers. The EU's strict MiCA regulations may force some overseas issuers to exit the EU or transition to a restricted model. High compliance costs, strict custody, and supplementary provisions in Hong Kong and Japan raise the financial and technological barriers to entry. The potential crowding-out effect of CBDCs should also not be ignored. Once the digital euro and digital Australian dollar are implemented, they could create institutional biases in public services, taxation, and welfare benefits, shrinking the space for private stablecoins denominated in local currencies. Operational risks are also evident. Recent incidents of overminting by individual issuers, while quickly rolled back, highlight the need for real-time audits of the rigor of reserve reconciliation and minting and destruction mechanisms. Interest rate and maturity mismatches are another potential risk. If issuers mismatch assets and redemption obligations in pursuit of returns, this could trigger a bank run and market volatility. Finally, geopolitical and sanctions compliance risks are also increasing. As an extension of the US dollar, stablecoins face increased compliance pressure and blacklist management challenges in specific scenarios. Overall, stablecoin investment holds enormous potential, but it is no longer a simple bet on scale; it instead involves a complex game of cash flow, rules, and institutional certainty. Investors need to focus on which entities can establish stable cash flow models within a compliant framework, which regions can unlock structural opportunities through evolving rules, and which sectors can generate long-term value through the expansion of compliance technology and on-chain credit. At the same time, we must remain vigilant against the potential impact of systemic concentration and regulatory repricing, especially given the dominance of the US dollar and the accelerated development of CBDCs across various countries.

V. Conclusion

The evolution of stablecoins has reached a critical turning point. No longer simply a matter of "how high can market capitalization rise?", they are transforming from dollar tokens into a global financial operating system. They first serve as assets, providing fundamental functions for market-neutral, on-chain transactions. Subsequently, through network effects, they have entered the global B2B and B2C market for small, high-frequency settlements. Ultimately, underpinned by both rules and code, they have evolved into a programmable cash layer capable of supporting complex financial services such as credit, collateralization, bills, and inventory financing. Through the combined efforts of monetary, fiscal, and regulatory frameworks, the United States has shaped dollar-denominated stablecoins into an institutional tool for exporting digital dollars. This has expanded the dollar's global penetration, stabilized demand for U.S. Treasuries, and secured international influence. While non-dollar stablecoins inherently struggle with network effects and interest rate differentials, their existence supports regional financial sovereignty and systemic resilience. Regions like the EU, Japan, and Hong Kong are building their respective niches through compliance-first approaches or institutional design. For investors, the key is a shift in perspective: from focusing on price and market share to validating business models through cash flow, rules, and compliance technology. In the next two to three years, stablecoins will complete the implementation of compliance models in multiple jurisdictions, evolving from "over-the-counter channel assets" to "the foundation of the global financial operating system", profoundly changing the monetary transmission path and the production mode of financial services.