Stablecoins evolved from experimental products to critical financial infrastructure, reaching $245 billion market cap and handling 67% of crypto trading volume.
USDT and USDC maintain 86% market dominance while facing challenges from tech giants like Ant Group and regulatory fragmentation across jurisdictions.
Future growth driven by cross-border payments, RWA tokenization, and DeFi integration, with regulatory compliance becoming key competitive differentiator.
Comprehensive stablecoin sector research reveals $245B market undergoing historic transformation. Analysis covers USDT/USDC dominance, regulatory frameworks, emerging players, and future growth drivers in digital finance.
CORE INSIGHTS OVERVIEW
The stablecoin sector is experiencing a historic transition from fringe experimentation to mainstream infrastructure. This once-dismissed “transitional product” has become the critical nexus connecting traditional finance with the digital economy, reaching a market cap of $245 billion and carrying 67% of global crypto market trading flow.
Market structure has taken shape but remains far from settled. While USDT and USDC control 86% market share in an apparent duopoly, this seemingly solid structure faces multi-front challenges. On one side, technical innovators like EthenaLabs surge with 30x growth rates, while traditional giants like Ant Group, JD.com, and Standard Chartered enter aggressively with licensing advantages. More notably, retail giants Walmart and Amazon are brewing proprietary stablecoin plans, intending to reconstruct the global payments ecosystem.
Application breakthroughs are accelerating. Stablecoins have evolved far beyond simple “digital dollars” into efficiency tools for cross-border payments, liquidity lifelines for DeFi ecosystems, and value bridges for real-world asset tokenization. When BlackRock manages $120 billion in US Treasuries through USDC and 38% of Turkish users rely on stablecoins to hedge inflation, we witness deep reconstruction of financial infrastructure.
Regulatory competition grows increasingly fierce. The US pushes compliance to consolidate dollar hegemony, the EU erects barriers to protect financial sovereignty, while Hong Kong competes for Asian influence through innovation sandboxes. This policy fragmentation presents both challenges and opportunities—compliance will eliminate speculators but pave roads for genuinely capable players.
Systemic risks cannot be ignored. When stablecoin issuers hold over $200 billion in US Treasuries, becoming important variables affecting monetary policy, the “shadow banking” label is no longer a simple metaphor. Technical vulnerabilities, liquidity crises, and geopolitical conflicts could all trigger chain reactions, as evidenced by USDC’s brief depegging during the 2023 Silicon Valley Bank incident.
The next five years will be a decisive window. AI risk management and cross-chain technology maturation will unlock trillion-dollar enterprise applications, central bank digital currency advancement will redefine competitive boundaries, and emerging market financial needs will spawn entirely new business models. In this triple contest of technology, regulation, and scenarios, whoever first constructs comprehensive advantages of “compliance + innovation + ecosystem” will occupy commanding heights in the new digital finance era.
The stablecoin story is far from over; the real climax may just be beginning.
SECTOR OVERVIEW
Definition
Stablecoins are crypto-digital currencies that achieve value stability by pegging to fiat currencies, commodities, or other assets. They are designed to solve trading and store-of-value challenges caused by traditional cryptocurrency volatility while maintaining blockchain technology’s decentralization, programmability, and cross-border liquidity advantages. Their core logic lies in maintaining price stability through collateral, algorithmic, or hybrid mechanisms, serving as “value bridges” connecting traditional finance with crypto ecosystems.
Core Design Objectives
Stablecoins’ core mission is providing “safe haven assets” for crypto markets while serving as intermediary media between fiat currencies and crypto ecosystems. Through anchoring mechanisms (such as fiat reserves, crypto asset collateral, or algorithmic adjustment), they maintain long-term stability between token prices and target assets (typically volatility below 1%), thereby fulfilling money’s basic functions—medium of exchange, unit of account, and store of value—in crypto trading, cross-border payments, and DeFi (decentralized finance) sectors.
Classification and Operating Mechanisms
Based on collateral asset types and stability mechanisms, stablecoins can be classified into four categories:
Fiat-collateralized (such as USDT, USDC): Issued by centralized institutions, backed by USD or cash equivalents (like short-term Treasuries) as reserves, relying on institutional credit and transparency with high compliance requirements. Their advantages include high liquidity and wide acceptance, but they must address centralized custody risks.
Crypto-collateralized (such as DAI): Achieving decentralized issuance through smart contracts, over-collateralized with ETH and other crypto assets (collateral ratios typically >150%), with risk control relying on on-chain liquidation mechanisms. Their advantages lie in decentralization, but they must address collateral asset price volatility risks.
Algorithmic stablecoins (such as FRAX): Without physical collateral, maintaining price stability through algorithmic dynamic supply-demand adjustment (such as minting/burning tokens). Such projects exposed systemic risks through the UST collapse, currently facing low market acceptance and strict regulatory restrictions.
Hybrid models: Some projects combine collateral and algorithmic mechanisms (such as FRAX using USDC and governance token FXS as collateral), balancing supply and demand through arbitrage mechanisms.
Technical Architecture and Functional Characteristics
Blockchain technology: Stablecoins rely on smart contracts from Ethereum, Tron, and other public chains for issuance, trading, and settlement, ensuring transparency and immutability.
Programmability: Supporting automated payments, conditional settlements, and other scenarios, such as lending collateral and yield distribution in DeFi protocols.
Cross-border payment efficiency: Achieving near real-time cross-border transfers through blockchain networks, with fees only 10%-20% of traditional banking systems.
MARKET STATUS
The stablecoin track can be divided into two categories
Traditional stablecoin issuers (such as Tether, MakerDAO): Early market occupants facing compliance challenges, with USDT leveraging Tron ecosystem expansion for cross-border payment scenarios.
External forces entering：Include financial institutions(such as Standard Chartered, Circle), tech giants (such as Ant Group, JD.com), and retail markets(such as Amazon, Walmart).
Market Scale and Growth
As of May 2025, global stablecoin market cap reached $245 billion, growing nearly 50-fold from $5 billion in 2019, becoming core crypto market infrastructure.
Stablecoins handle over 67% of cryptocurrency market trading volume, with their trading volume proportion exceeding two-thirds and far surpassing Bitcoin and other assets. USDT and USDC combined market share reaches over 85%.
Growth drivers:
DeFi demand: Stablecoins serve as “on-chain cash” for decentralized finance ecosystems, accounting for over 60% of locked value in protocols like Aave and Compound.
Institutional adoption: BlackRock, Blackstone, and others are launching USDC-based bond tokenization funds, driving institutional-level settlement demand.
Cross-border payment penetration: Stablecoin cross-border payment costs are only 10%-20% of traditional systems, with 38% of users in high-inflation countries like Turkey and Brazil using stablecoins to hedge local currency devaluation risks.
Market Competition
Duopoly monopoly structure: USDT ($150.3 billion) and USDC ($60.8 billion) combined account for 86%, forming highly concentrated markets.
Emerging stablecoin rise: EthenaLabs’ USDE market cap surged from $146 million in 2024 to $4.889 billion, with growth exceeding 30x, becoming the fastest-growing emerging stablecoin. FRAX and others combining collateral and algorithmic mechanisms attempt to balance decentralization and stability.
Application Scenario Deepening
Cross-border payments: Visa’s partnership with Paxos for USDG stablecoin alliance and PayPal’s PYUSD have been applied to enterprise-level payments, with transaction costs below 1% and minute-level arrival times.
Hong Kong explores Hong Kong dollar stablecoin applications in supply chain finance and cross-border e-commerce, targeting SWIFT system replacement.
RWA (Real World Asset tokenization): BlackRock BUIDL fund and BlackRock bond tokenization projects drive stablecoin integration with real estate, bonds, and other traditional assets on-chain.
Short-term Treasury tokens (STBT) become new reserve asset choices, with USDC issuers holding $120 billion in Treasuries, ranking 19th globally among Treasury holders.
INDUSTRY CHAIN ANALYSIS
The stablecoin industry chain has formed complete closed loops from underlying technology to application scenarios, covering issuance, circulation, compliance, technical support, and diversified application scenarios.
Upstream: Issuance and Technology Layer
Issuers and Custody Institutions
Licensed issuers: Dominating market structure, such as Tether (USDT) and Circle (USDC) fiat-collateralized stablecoins, occupying 86% market share. They profit through issuance/redemption fees (0.1%-0.3%) and reserve asset interest (such as Treasury yields), with USDT annual interest income exceeding $4 billion. USDT reserves primarily consist of Treasuries (66%), gold (4.5%), and Bitcoin (5.1%), while USDC maintains 100% anchoring to USD and short-term Treasuries.
Decentralized issuers: Such as MakerDAO (DAI) maintaining stability through ETH over-collateralization, and FRAX combining algorithmic and collateral mechanisms to balance risks.
Custody service providers: Such as ICBC Asia and Standard Chartered providing segregated custody for reserve assets, ensuring 1:1 anchoring redemption capabilities.
Technical Infrastructure
Blockchain platforms: Ethereum (51.5%), Tron (31.7%), and Solana (4.6%) serve as primary public chains supporting stablecoin issuance and trading.
Smart contracts and security services: Companies like Sinosoft and Digital China developing compliant issuance platforms (such as FINNOSafe), supporting multi-currency reserve penetrating supervision; Feitian Technologies and RoyalPay providing hardware encryption equipment, securing private key storage and transaction safety.
Compliance and Regulatory Services
License applications: Hong Kong Stablecoin Ordinance requires minimum capital of HK$25 million, with Ant Group, JD.com, and others actively applying for Hong Kong dollar stablecoin licenses.
Legal and auditing: TRS providing reserve asset text verification, and Meiya Pico tracking money laundering through on-chain data analysis.
Midstream: Circulation and Trading Layer
Trading and Liquidity
Centralized exchanges: Binance, Coinbase, and others providing fiat exchange channels, with USDT/USDC trading pairs accounting for 67% of market trading volume.
Decentralized exchanges (DEX): Uniswap and Curve reducing trading slippage through stablecoin liquidity pools, with annual fee sharing reaching 15%-30%.
Liquidity providers: B2C2 and Cumberland providing institutional bulk stablecoin market-making services, supporting instant cross-border payment settlement.
Payments and Settlement
Cross-border payment gateways: Lakala and Huafeng Spandex supporting multi-currency second-level settlement, with fees 70% lower than traditional wire transfers. JD.com’s “JD-HKD” explores Middle East cross-border e-commerce settlement scenarios through Hong Kong sandbox testing.
Enterprise payment platforms: ZeroHash and BVNK providing tokenized asset settlement for institutions like Franklin Templeton through API-integrated stablecoin payments.
Downstream: Application and Scenario Layer
Cross-border Payments and Financial Inclusion
Emerging markets: In high-inflation regions like Nigeria and Turkey, 33% of users use stablecoins to hedge local currency devaluation, with annual cross-border settlement exceeding $5 trillion.
Supply chain finance: JD.com and China Merchants Logistics exploring logistics freight stablecoin settlement, reducing exchange rate volatility costs by 15%.
DeFi and Financial Innovation
Lending and yield farming: Aave and Compound with 60% locked value in stablecoins, with interest-bearing stablecoins (such as aUSDC) yielding 8%-12% annually.
Derivatives and synthetic assets: EthenaLabs (USDe) providing “internet bond” high-yield models through Ethereum derivatives hedging strategies.
RWA (Real World Asset Tokenization)
Real estate and bonds: BlackRock BUIDL fund and GLP’s digital intelligence platform tokenizing real estate and warehouse assets, with stablecoins serving as pricing and trading media.
Short-term Treasury tokenization: USDC issuers holding $120 billion in Treasuries, becoming the world’s 19th largest Treasury holder.
E-commerce and Daily Consumption
Online payments: Visa and PayPal integrating stablecoin payment channels, with fees below 1% and minute-level arrival times.
Retail scenarios: Yiwu Market’s “Yi Payment” supporting Belt and Road stablecoin settlement, covering 5 million POS terminals.
〈Stablecoin Sector Research Report: Digital Cornerstones Reshaping the Financial System(Part 1)〉這篇文章最早發佈於《CoinRank》。
