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.
LEADING PLAYERS
Traditional Stablecoin Issuers: Offensive and Defensive Games Under Duopoly Structure
Tether (USDT)
Market position: World’s largest stablecoin with $146 billion market cap (70% share), Q1 2025 trading volume exceeding $18 trillion.
Emerging market dominance: Deep penetration in Southeast Asia and Latin America P2P remittances, with 38% user penetration in Turkey and Brazil, local premiums often exceeding 15%.
Multi-chain issuance: 51.5% on Ethereum, 31.7% on Tron (zero fee advantage), Solana share rising to 12%.
Reserve diversification: $98 billion Treasuries (66%) + Bitcoin (5.1%, approximately 100,000 coins) + gold (4.5%), but audit transparency repeatedly questioned.
Circle (USDC)
Compliance benchmark: Primary beneficiary of US GENIUS Act, EU MiCA certified, 100% reserves in USD cash + short-term Treasuries.
Interest-dependent model: $120 billion Treasury holdings generating $441 million annual yield, comprising 99% of profits, with high interest rate sensitivity.
Institutional ecosystem: Co-building enterprise payment networks with Visa and Stripe, covering 200 countries globally with fees below 1%.
Technical upgrades: Base chain Gas costs reduced 90%, driving high-frequency trading scenarios.
Ethena Labs (USDe)
Innovative model: Ethereum derivatives hedging strategy achieving “internet bonds” with 15%-20% annual yields, $6.2 billion market cap (leading DeFi stablecoin).
Emerging Forces: Differentiated Breakthrough Players
Tech Giants: Scenario Empowerment and License Competition
Ant Group: Hong Kong subsidiary obtaining HKMA stored value payment tool license, becoming the first Greater Bay Area traffic scenario service provider supporting stablecoins.
JD.com: Co-building Middle East digital clearance platform with Royal Bank, supporting stablecoin and fiat currency bidirectional exchange for cross-border payments.
Financial Institutions: Traditional Force Counterattack and Alliance Breakthrough
Standard Chartered: Partnering with Animoca Brands and Hong Kong Telecommunications to establish joint ventures, applying for Hong Kong dollar stablecoin licenses, integrating with central bank digital currency bridge (mBridge).
JPMorgan and other bank alliances: Discussing joint stablecoin issuance, integrating Zelle payment networks to counter retail giant diversion threats.
BlackRock: BUIDL fund achieving $120 billion Treasury tokenization through USDC, becoming the world’s 19th largest Treasury holder.
Retail Markets: Scenario Integration Exploring Proprietary Stablecoin Settlement
Walmart & Amazon: Avoiding billions in annual Visa/Mastercard fees, exploring proprietary stablecoins for instant settlement. If implemented, this could reconstruct retail payment ecosystems, threatening traditional card organizations’ 20% market share.
CORE RISKS AND CHALLENGES
Stablecoin “stability” essentially represents a precise balance of credit, liquidity, and regulation, with current risk focus shifting from technical vulnerabilities to systemic financial threats.
From a short-term perspective, leading projects (USDC, licensed Hong Kong dollar stablecoins) win through compliance, while small and medium algorithmic stablecoins clear out under regulatory bans. Long-term, the stablecoin sector must overcome three challenges:
Transparency revolution: Introducing Chainlink real-time reserve proofs, eliminating black box doubts;
Anti-cyclical design: Reducing interest rate dependence (such as exploring non-Treasury reserves);
Regulatory collaboration: Promoting cross-border sandbox pilots (such as Hong Kong RWA guidelines).
Systemic Financial Risks: Deep Integration with Traditional Finance
Treasury Market Transmission Risks
Large-scale Treasury holdings: Tether (USDT) holds approximately $98 billion in Treasuries, becoming the world’s 19th largest holder; USDC issuers hold $120 billion in Treasuries. During runs, Treasury selling could push short-term rates 6-8 basis points higher (BIS estimates), disrupting monetary policy transmission.
Interest rate dependency: Circle (USDC) derives 99% of profits from Treasury interest, with 1% Fed rate cuts potentially reducing annual revenue by $441 million, highlighting business model fragility.
“Shadow Banking” Run Risks
No risk buffer mechanisms: Stablecoin issuers are not included in deposit insurance and central bank lender-of-last-resort mechanisms. During the 2023 Silicon Valley Bank collapse, USDC briefly depegged to $0.87 due to $3.3 billion trapped reserves, exposing liquidity crises.
Insufficient collateral asset liquidity: Only 80% of Tether reserves are high-liquidity Treasuries, with the remainder in commercial paper and other low-liquidity assets, making it difficult to handle large-scale redemptions.
Regulatory and Compliance Challenges: Increasing Global Policy Fragmentation
Regulatory Fragmentation and Long-arm Jurisdiction
US GENIUS Act: Mandating 100% dollar reserves and prohibiting algorithmic stablecoins, covering foreign issuers (such as Tether) or requiring market exclusion.
EU MiCA regulations: Requiring 60% reserves in European banks, forcing Tether to abandon euro stablecoin EURT; Hong Kong Stablecoin Ordinance setting HK$25 million minimum capital thresholds, increasing compliance costs for small and medium projects.
Legal Applicability Conflicts
Cross-border operations face judicial contradictions: If one region defines stablecoins as “securities” (requiring SEC registration) while another treats them as “payment tools,” issuers need multiple compliance adaptations, escalating costs.
Technology and Trust Crises: Questionable Security Mechanisms
Smart Contract Vulnerabilities and Attacks
Cross-chain bridge risks: 2024 USDR depegging due to contract vulnerabilities caused $48M market cap evaporation (72% of then-market cap); 2022 algorithmic stablecoin Beanstalk flash loan attack lost $180 million, exposing code-layer fragility.
Oracle manipulation: Decentralized stablecoins (such as DAI) rely on external price data; potential malicious manipulation could trigger incorrect liquidations.
Reserve Transparency Disputes
Audit authenticity doubts: Tether provides monthly reserve disclosures, but reports are mostly “attestations” rather than “comprehensive audits,” with markets continuously questioning $97.6 billion Treasury reserve authenticity.
Mixed asset risks: Some stablecoin reserves contain Bitcoin (such as USDT 5.1%) and gold, with price volatility increasing redemption uncertainty.
Competition and Substitution Risks: CBDC and Giant Squeeze
Central Bank Digital Currency (CBDC) Impact
Digital RMB (e-CNY) connecting 40 countries through mBridge platform, reducing cross-border payments to 6-9 seconds with 50% cost reduction, squeezing stablecoin cross-border scenarios.
Federal Reserve supporting stablecoins over CBDCs, with Standard Chartered predicting GENIUS Act passage could see stablecoins absorbing $400 billion in annual Treasuries, but policy reversal risks persist.
Traditional Financial Giant Entry
PayPal launching PYUSD and JPMorgan JPMCoin with over $200 billion annual settlement volumes, leveraging user bases and compliance advantages to compete for B2B payment markets.
Ant Group and Standard Chartered applying for Hong Kong licenses, with Hong Kong dollar stablecoins potentially diverting USDT’s Asian market share.
Geopolitical and Monetary Sovereignty Threats
Dollarization Intensifying Currency Hegemony
90% of global stablecoins are pegged to USD, with Tether becoming the third-largest Treasury buyer. EU warning: USD stablecoins weaken eurozone monetary policy effectiveness, increasing US financial dependence.
Emerging market “passive dollarization”: 38% of users in Turkey and Brazil using stablecoins to hedge inflation, leading to local currency credit erosion and monetary sovereignty damage.
Capital Control Ineffectiveness
Stablecoins open new channels for cross-border capital flows, weakening foreign exchange controls. For example, Russian users using USDT to circumvent sanctions, impacting domestic financial stability.
FUTURE TRENDS
Stablecoins will experience triple contests of technology, regulation, and scenarios, presenting multi-dimensional patterns of “compliance monopolization, giant fragmentation, technological empowerment”:
Compliance barriers: Licensed issuers (USDC, Ant Hong Kong dollar coin) dominating sovereign markets, with algorithmic stablecoins retreating to margins.
Scenario competition: Cross-border payments, RWA tokenization, and offline retail becoming three major battlefields, with traditional finance and tech giants in direct confrontation.
Technology critical points: AI risk management and cross-chain interoperability determining security and efficiency limits, potentially unlocking trillion-dollar enterprise applications if breakthroughs occur.
Regulatory Framework Improvement and Market Concentration Enhancement
Global regulatory unification: Implementation of US GENIUS Act and Hong Kong Stablecoin Ordinance marks basic formation of mainstream market regulatory frameworks. The US requires 100% dollar stablecoin reserves while prohibiting algorithmic models; Hong Kong sets HK$25 million minimum capital thresholds, driving industry toward compliance and institutionalization. EU MiCA regulations mandating reserve segregation and regular auditing may force USDT to exit European markets.
Intensifying market concentration: Leading stablecoins (USDT, USDC) leveraging compliance capabilities and brand trust will further monopolize markets (currently combined 86% share), accelerating small and medium project elimination. Standard Chartered predicts compliance will drive stablecoin market scale from current $240 billion to $2 trillion by 2028.
Traditional Finance and Tech Giant Acceleration
Retail giant payment ecosystem disruption: Walmart and Amazon are planning proprietary stablecoin issuance, aiming to bypass Visa and Mastercard high fees (saving billions annually), achieving instant cross-border payment settlement. JD.com and Ant Group pilot Hong Kong dollar stablecoins through Hong Kong licenses, entering cross-border e-commerce and supply chain finance scenarios.
Bank joint counterattacks: Traditional banks like JPMorgan and Citi are planning joint stablecoins (such as Zelle network upgrades) to counter retail giant payment diversion threats.
Technology Integration and Innovation-driven Efficiency Upgrades
Smart contracts and cross-chain technology: Ethereum Layer2 scaling (Base, Arbitrum) reducing Gas costs 90%, with Solana and other high-performance chains driving 200% annual growth in high-frequency trading scenario stablecoin circulation. Cross-chain protocols (such as Chainlink CCIP) promote multi-chain asset interoperability, enhancing liquidity.
AI and RWA integration: Ant Group introducing AI risk management models into stablecoin payment networks, reducing fraud risks; BlackRock BUIDL fund achieving $120 billion Treasury tokenization through USDC, promoting RWA asset on-chain.
Application Scenario Deepening and Ecosystem Diversification
Cross-border payment growth dominance: Stablecoin cross-border settlement costs are only 10% of traditional SWIFT, with timeframes compressed from days to seconds. 2025 cross-border payment scale is expected to exceed $3 billion monthly, accounting for 3% of global cross-border transaction volume, potentially rising to 20% within five years.
DeFi and financial derivative innovation: Protocols like Aave and Compound with 60% locked value in stablecoins, interest-bearing stablecoins (such as aUSDC) yielding 8%-12% annually. Ethena Labs’ USDe provides “internet bond” models through derivatives hedging, with 15%-20% annual yields.
CBDC Competition and Cooperation Reshaping Landscape
Complementary coexistence: Digital RMB (e-CNY) covering 40-country cross-border payments through mBridge, but efficiency is still slightly inferior to stablecoins (6 seconds vs instant arrival). The US clearly supports stablecoins over CBDCs, with Standard Chartered predicting $400 billion annual Treasury absorption.
Substitution threats: If CBDC technology breakthroughs (such as offline payments, smart contract support) occur, they may squeeze stablecoin market share in strong sovereign currency countries, but emerging markets will still rely on stablecoins for inflation hedging (such as 38% of Turkish users).
Emerging Market Penetration and Enhanced Financial Inclusion
High-inflation region demand explosions: 33% of users in emerging markets like Nigeria and Brazil use stablecoins for daily storage and cross-border remittances, with annual transaction volumes exceeding $5 trillion. USDT often commands 15% P2P premiums, becoming capital control circumvention tools.
Financial inclusion deepening: Stablecoins provide on-chain financial services for unbanked populations, with 43% of African crypto transactions involving stablecoins, and Hong Kong RWA guidelines promoting real estate tokenization to lower investment thresholds.
CONCLUSION
The stablecoin sector’s development trajectory clearly demonstrates digital finance’s evolution from wild-west origins to mature ecosystem sophistication. From initial simple “digital dollar” concepts to becoming indispensable global financial system infrastructure, stablecoins completed decades of traditional finance accumulation in just five years.
This represents a revolution in trust reconstruction. Traditional financial systems build trust through central bank credit, banking networks, and regulatory frameworks, while stablecoins redefine “trust” through code transparency, reserve disclosure, and smart contract execution. USDC’s full reserve transparency, DAI’s decentralized governance, and USDe’s derivatives hedging innovation each explore boundaries of digital-era trust mechanisms.
Technology and regulatory competition will persist long-term. Regulatory frameworks pursue controllability, transparency, and financial stability, while technological advancement pursues decentralization, efficiency optimization, and innovation breakthroughs. This tension represents not a zero-sum game but the core driving force for industry progress. Hong Kong’s innovation sandboxes, US compliance frameworks, and EU strict regulation are forming differentiated development paths, providing survival spaces for different types of stablecoin projects.
Application scenario depth determines sector value ceilings. Current stablecoins primarily serve crypto trading and cross-border payments, but true value release will come from deep integration with real economies. Supply chain finance, trade settlement, payroll payments, consumer credit—each traditional finance scenario’s digital transformation could spawn hundred-billion-dollar market opportunities. JD.com’s Middle East clearance, Ant’s cross-border e-commerce, and BlackRock’s asset tokenization validate stablecoins’ enormous potential as “programmable money.”
Competitive landscapes will experience major reshuffling. Current duopoly structures appear stable but are actually fragile. Technical innovations could change game rules overnight, regulatory policies could instantly reconstruct market maps, and giant market entries could completely overturn competitive logic. Future winners may not be today’s leaders, but those maintaining simultaneous leadership across compliance, technical innovation, and ecosystem construction dimensions.
Systemic impacts will transcend financial categories. Stablecoin rise represents not merely payment method transformation but deep reconstruction of monetary sovereignty, financial regulation, and international trade patterns. When 90% of global stablecoins peg to USD and emerging market users massively use stablecoins to hedge local currency risks, we witness new forms of digital-era “currency wars.” The accelerated advancement of national central bank digital currencies essentially responds to these challenges.
Investment opportunities coexist with risks. For investors, stablecoin sectors present both deterministic growth logic—cross-border payment demand, DeFi ecosystem expansion, asset tokenization trends—and considerable risk factors—regulatory policy reversals, technical security vulnerabilities, systemic liquidity crises. The key lies in identifying projects with genuine competitive moats and grasping the rhythms of regulatory policies and technical innovation.
Looking forward, stablecoins will no longer be simple “stable” currencies but programmable, composable, governable intelligent financial tools. They will become value bonds connecting real and digital worlds, driving global financial systems toward more open, transparent, and efficient directions. In this process, technical innovators, regulatory formulators, traditional financial institutions, and tech giants will all play important roles, collectively writing new chapters in digital finance.
The stablecoin story continues, and we stand at history’s critical juncture.
〈Stablecoin Sector Research Report: Digital Cornerstones Reshaping the Financial System(Part 2)〉這篇文章最早發佈於《CoinRank》。
