Introduction
In 2025, the digital asset market will reach a new milestone — Circle successfully lists on the New York Stock Exchange, officially becoming one of the first financial technology companies listed with stablecoin business at its core. This listing not only signifies that the USDC and dollar stablecoin ecosystem has entered the public capital market but also opens up a new blue ocean in the field of digital assets. Stablecoins, as a bridge connecting traditional fiat currencies and the world of digital currencies, are becoming the core battlefield for capital markets and financial technology companies.
In the context of the rapid development of the global digital economy, the stablecoin ecosystem has experienced explosive growth. Whether it is the influx of capital or the gradual improvement of policy regulation, both highlight the critical role of stablecoins in the future global payment system, cross-border settlements, and asset management. This article will deeply analyze the ecological layout of Circle and USDC, the underlying compliance logic, capital arbitrage opportunities, and global regulatory trends, comprehensively showcasing how stablecoins are igniting a capital frenzy in digital assets.
The background and value of the rise of stablecoins
Stablecoins, as digital assets that anchor the value of traditional fiat currencies, have rapidly risen in recent years, becoming an important component of the cryptocurrency market. Unlike the highly volatile mainstream digital currencies like Bitcoin and Ethereum, stablecoins achieve price stability by pegging 1:1 to fiat currencies like the US dollar, significantly reducing the risks of digital asset trading. Leveraging blockchain technology, stablecoins not only accelerate the efficiency of cross-border transfers and payments but also provide robust infrastructure support for various scenarios such as DeFi, digital asset exchange, and global merchant payments.
The core advantages of stablecoins are reflected in three aspects:
Price stability, avoiding volatility risks
The cryptocurrency market experiences significant price fluctuations, and stablecoins anchor the value of fiat currencies, ensuring stability in transaction and settlement amounts, greatly reducing trading risks.
Fast and low-cost cross-border transfers
Stablecoins, based on blockchain technology, enable global transactions to be completed in minutes, far less than the time and fees associated with traditional bank cross-border remittances.
Support for diversified financial applications
Stablecoins directly connect to innovative scenarios such as DeFi lending, asset exchange, and digital goods payments, greatly expanding the use boundaries of digital assets.
These are things that traditional fiat currencies find difficult to achieve, greatly enhancing the convenience and efficiency of digital asset trading.
Circle's stablecoin ecosystem layout
Circle was founded in 2013, focusing on digital payments and blockchain finance, and launched the US dollar stablecoin USDC in collaboration with Coinbase. USDC is a centralized stablecoin pegged 1:1 to the US dollar, with all funds reserved in US-regulated banks and short-term Treasury bonds, audited monthly by third-party accounting firms to ensure transparency and safety of reserve assets.
As of June 2025, the market value of USDC is approximately $39 billion, ranking second among global stablecoins, only behind USDT. Its ecosystem is widely covered, deployed on multiple public chains including Ethereum, Solana, Arbitrum, Optimism, Avalanche, Base, and Polygon, supporting exchanges, DeFi protocols, high-speed payments, and cross-chain asset transfers.
Circle realizes the seamless transfer of USDC across chains without slippage through the Cross-Chain Transfer Protocol (CCTP), implementing the global strategy of 'USDC Everywhere'.
In terms of compliance, Circle strictly adheres to the regulatory requirements of the US Treasury, SEC, and FinCEN, becoming the 'regular army of stablecoins' in the eyes of the Biden administration. The transparent audit reports and compliance reserve system of USDC make it an important cornerstone of the digital dollar ecosystem. At the same time, Circle collaborates with global payment giants such as SWIFT, Visa, Mastercard, and Stripe to actively promote the implementation of USDC in global payment and settlement fields.
Overview of Major US Dollar Stablecoin Projects
Stablecoins
Issuer
Total Market Value (as of June 2025)
Reserve Structure
Compliance attributes
USDT
Tether (registered in El Salvador)
Approximately $155.6 billion
US Treasury bonds, cash, repos, etc.
Partially transparent, has been fined
USDC
Circle (United States)
Approximately $61.47 billion
Cash + short-term US Treasury bonds, clear audit
Fully compliant, SEC collaboration partner
FDUSD
First Digital Trust (Hong Kong)
Approximately $1.481 billion
Bank deposits + short-term securities
Hong Kong Trust Framework Regulation
PYUSD
PayPal + Paxos
Approximately $947 million
Paxos Custody, Primarily US Treasury
Regulated by NYDFS
USDe
Ethena Labs (Singapore)
Approximately $5.6 billion
No cash, synthetic structure
No traditional guarantees
USD1
Trump Team WLFI
Approximately $2.2 billion
Fiat currency storage system
Third-party BitGo regulation
Underlying Logic of Stablecoins
In recent years, the stablecoin market has shown explosive growth, driven by three core factors: regulatory vacuum, interest rate spread, and national competition. These factors together have made stablecoins not only an important asset class in the digital currency market but also a new battlefield for fierce global financial capital competition.
1. Regulatory Vacuum — From Wild Growth to Gradual Regulation
In the past, there were almost no clear global unified regulatory standards for the issuance and circulation of stablecoins, leading to a 'regulatory vacuum' in the market. This lack of regulation lowered the issuance threshold, attracting a large influx of capital and projects; on the other hand, it also brought potential systemic risks. As countries begin to introduce laws and regulations regarding stablecoins, such as Hong Kong's (Stablecoin Regulation) set to officially take effect in August 2025, it brings institutional norms and guarantees to the market. This institutional shift not only injects confidence into the industry's development but also promotes the market to gradually move towards compliance and maturity.
2. Interest Rate Spread — The 'Profit Mine' in the Eyes of Capital
Stablecoin issuers manage user-converted fiat funds through various methods such as investing in low-risk short-term Treasury bonds, staking Ethereum (ETH), or using futures short strategies, achieving returns far exceeding bank deposit rates. Taking Ethena's USDe as an example, it achieved an annualized return rate (APY) of over 20% through ETH staking and futures arbitrage strategies, making it very attractive in the market. Once high yields are achieved, funds quickly pour in, creating a capital accumulation effect and accelerating the growth of stablecoin scale.
3. National Competition — Monetary Hegemony and the New Battlefield of the Digital Economy
Stablecoins are not only financial innovation tools but also the focal point of international currency competition and digital sovereignty. The USD1 supported by the Trump team is trying to create a 'digital dollar reconstruction plan' to challenge the existing digital dollar hegemony; meanwhile, Hong Kong is actively building the Hong Kong dollar stablecoin ecosystem to compete for the high ground in Asian fintech. Many countries in Europe, America, and Asia are trying to maintain monetary influence in the digital age through regulations and central bank digital currency (CBDC) pilots, making stablecoins a new arena for countries surrounding digital currency sovereignty and global payment systems.
4. Use scenarios continue to enrich, gradually approaching fiat currency functions
Stablecoins were initially used for internal transfers within the crypto space, such as USDT circulating widely in the cryptocurrency market. However, with the development of technology and application ecosystems, the functions of stablecoins continue to expand:
Global transaction payments: supporting cross-border e-commerce and overseas remittances, providing fast and low-cost settlement methods.
DeFi lending and yield: becoming a major lending asset on DeFi platforms, allowing users to lend stablecoins to earn interest or use them for collateral.
Asset hedging tool: during significant volatility in the crypto market, investors can quickly convert to stablecoins to lock in asset value.
Digital goods payments: stablecoins are widely used as a payment method in fields such as gaming, NFTs, and content creation.
As these diverse scenarios continue to mature, the use of stablecoins is gradually evolving from 'cryptocurrency tools' to 'digital fiat currencies', resulting in explosive market scale and capital interest.
The metaphor of Bretton Woods 3.0 is unfolding
From state-led initiatives and pilot programs by commercial banks to participation from tech giants and native on-chain projects, stablecoins are transforming from niche tools in the cryptocurrency space to key gateways for the next generation of global payment infrastructure.
Many people have not realized that this wave of stablecoins is, in fact, the competition among countries surrounding 'monetary hegemony in the digital age'.
As the US continues to expand the influence of the dollar through stablecoins, Hong Kong is also actively building a stablecoin ecosystem, promoting the establishment of an Asian Web3 settlement center.
On May 21, 2025, the Hong Kong Legislative Council officially passed the (Stablecoin Regulation Bill) and completed the third reading on the same day. This regulation will officially take effect on August 1, 2025, making it the first jurisdiction in the world to establish a comprehensive regulatory framework for fiat-pegged stablecoins.
Hong Kong's introduction of the (Stablecoin Regulation) is not merely reactive regulation but is driven by the strategic consideration of proactively seizing the 'next generation payment and settlement center' high ground:
The global cryptocurrency payment system has taken shape, with stablecoins gradually expanding from 'crypto settlement tools' to mainstream choices for cross-border remittances, payments, and asset hedging.
The US, China, Europe, and Japan are all accelerating currency digitization, and currency competition is shifting to the level of digital sovereignty. Hong Kong must establish a compliance moat to ensure the internationalization of the Hong Kong dollar.
The integration of Web3 and finance is accelerating, with stablecoins serving as a 'bridge' and 'medium' between on-chain applications and real-world assets, and Hong Kong aims to be a bridge city.
Therefore, Hong Kong is not merely 'plugging loopholes' but is actively finding a new positioning to define rules between the crypto space and regulation. Hong Kong's long-term intent is very clear:
The digital Hong Kong dollar is led by the Monetary Authority, primarily settling through the CBDC system and pilot programs in financial institutions;
Hong Kong dollar stablecoins are led by the market, serving as a supplement or even replacement in open chain applications, overseas payments, and cross-border settlements.
This dual-track approach will allow Hong Kong to hold two types of 'issuance rights' in digital finance: one is official credit, and the other is commercial efficiency.
In this global monetary game of 'Bretton Woods 3.0', stablecoins have quietly become the next sovereign tool's technological carrier and symbol of influence. The US, with USDC and USDT as anchors, competes for settlement rights in the digital age; Europe and Japan promote independent strategies for local currency digitization through regulations like MiCA; while Hong Kong has charted an independent path with a flexible and forward-looking regulatory framework and highly open market mechanisms, pursuing a 'market-driven, institution-supported' approach.
In the future, when stablecoins become the infrastructure for cross-border payments, and blockchain redefines settlement networks and asset expressions, whoever can control the pricing rights, access rights, and settlement rights of this system will gain an advantage in the new international financial order. Hong Kong has already revealed its cards.
Stablecoins are not just a revolution in the form of currency but also a deep-layer game of digital sovereignty, financial order, and geopolitical discourse power. In the future, more cities and countries will join this unnamed digital financial war. However, at this moment, Hong Kong, standing at the table, is no longer a bystander.
