Abstract
In our previous in-depth report (The Origins and Aspirations of Stablecoins: From Sparks to Flames, Gradually Coming into Shape), we introduced the definition and development history of stablecoins. With increasing market attention, this article focuses on discussing the application scenarios of stablecoins. Stablecoins have special advantages in payment scenarios, and the market is particularly focused on stablecoins making inroads into traditional payment fields, especially cross-border payments. The non-homogeneous characteristics among different stablecoins will intensify competition among them. Currently, the tokenization of US stocks and AI Agents are important tracks for application advancement, which will have a siphoning effect on global financial market liquidity.
Stablecoins have a simple account system, and the tokens are detached from the banking account system, making transfers and remittances between users extremely convenient, featuring the characteristic of payment as settlement—this stands in stark contrast to the traditional financial system. Traditional financial accounts are maintained by various financial institutions as centralized nodes providing financial services, with financial institutions responsible for maintaining users' accounts and financial infrastructure while charging related fees. In contrast, transfers and remittances between stablecoin users are very convenient; traditional cross-border remittances, international payments, or even stock trading cannot achieve payment as settlement and require time to complete final settlement. On the other hand, setting up traditional financial institution accounts is much more complex than blockchain accounts, as many individuals in underdeveloped areas have difficulty obtaining bank accounts. Meanwhile, the lightweight account characteristic of blockchain enables easy account registration as long as there is internet access and devices like mobile phones.
The 'non-homogeneous' characteristic of stablecoins will intensify market competition. Although stablecoins of the same type are equivalent in value, stablecoins issued by different issuers still possess 'non-homogeneous' characteristics. For example, the trading volume of USDC, as a stablecoin under Coinbase, is about one-eighth that of USDT. The market competition for stablecoins will be very fierce, testing the versatility and promotional capabilities of stablecoin varieties.
The tokenization of US stocks is an important track that is expected to accelerate in the near future, and the integration advantages of Agents and stablecoin accounts will create a siphoning effect on global financial liquidity. Stablecoins, as on-chain 'fiat currency', play a role as an infrastructure tool, and stock tokenization is expected to become the next rapidly deployed scenario for stablecoins, being the most planned and promoted variety in RWA. Furthermore, stablecoin accounts and AI have a natural compatibility, making it a very friendly option for AI Agent payments. Stablecoins are built on lightweight accounts based on blockchain, representing on-chain native assets, which is very suitable for AI Agents to control accounts for payments. These two application scenarios will create a siphoning effect on global financial liquidity. Meanwhile, how can individual users and businesses safeguard their cryptocurrency assets? For businesses, private key management is even more complex. In summary, this involves systemic construction related to asset security, internal controls, compliance, and coordination among multiple countries.
Investment strategy: Stablecoins and RWA will remain hot topics in the market, catalyzed by the application landing in the US and the stablecoin licensing process in Hong Kong. The tokenization of stocks and interaction with Agents are expected to become new focal points. Recommended stocks include US stocks: Circle (CRCL), Robinhood (HOOD), Coinbase (COIN), Microstrategy (MSTR), Futu Holdings (FUTU); Hong Kong stocks: Zhong An Online (HK6060), Lianlian Digital (HK2598), Hengyue Holdings (HK1723); A-shares: Sifang Jingchuang (300468), Zhongke Jincai (002657), Hengbao Co., Ltd. (002104), Longxin Group (300682), etc.
Risk warning: Blockchain technology R&D not meeting expectations; uncertainty in regulatory policies; Web3.0 commercialization not meeting expectations.
1. Core viewpoints
As cryptocurrencies, stablecoins possess unique advantages in payment scenarios, especially in traditional payment fields, particularly in international trade and cross-border payments. Furthermore, as cryptocurrencies, different stablecoins (even if pegged to the same fiat currency) possess inherent non-homogeneous characteristics due to differing promotional channels and scenarios, leading to intense competition among stablecoin varieties. Currently, the tokenization of US stocks and AI Agents are two significant tracks for advancing the application of stablecoins, which will create a siphoning effect on global financial market liquidity.
This article analyzes the prospects for stablecoins entering the payment field and forecasts the driving role of US stock tokenization and AI Agents on stablecoins, while also explaining the establishment of regulatory and compliance systems.
2. Stablecoins and traditional payments: A bilateral approach
2.1 Stablecoins entering the traditional payment field: Innovations in cost and settlement models
As a type of cryptocurrency backed by fiat currency assets, the transfers between accounts are naturally peer-to-peer and decentralized, embodying the characteristics of blockchain accounts where users maintain control over their accounts, and the blockchain infrastructure is maintained by miners. This is distinctly different from traditional fiat (and other financial) accounts, which are operated by various financial institutions as centralized nodes providing financial services, with financial institutions responsible for maintaining users' accounts and financial infrastructure while charging related fees. The simplicity of the blockchain account system makes transfers and remittances between users exceptionally convenient, featuring the characteristic of payment as settlement—this starkly contrasts with the traditional financial system, where traditional cross-border remittances, international payments, and even stock trading cannot achieve payment as settlement and require time to complete final settlement, limited by the operational model of traditional financial institutions as centralized intermediaries. Furthermore, the setup of traditional financial institution accounts is significantly more complex than blockchain accounts; for many underserved areas lacking banking services, obtaining a bank account is not easy, while the lightweight account feature of blockchain allows easy account registration whenever there is internet access and devices like mobile phones.
The aforementioned characteristics of blockchain are precisely what give stablecoins an advantage in traditional payment fields. Thus, in some underdeveloped countries, communities can still register blockchain accounts via mobile phones, using stablecoins for daily remittances and retail payments, particularly as the use of USD stablecoins helps address the depreciation of local currencies. Interestingly, these regions may not even have banks providing USD account services, yet they can achieve USD payments through USD stablecoins, representing a 'leapfrog' development.
As shown below, a transfer of approximately 2,477 USDT occurred for the USDT stablecoin deployed on the Ethereum blockchain, with miners charging a fee of about $0.23 (paid in ETH tokens). This remittance transaction was confirmed by miners and recorded on the blockchain immediately after the remittance was initiated by the sender, completing the settlement.
Of course, it is worth noting that the settlement speed of blockchain is constrained by the 'impossible triangle' (i.e., decentralization, security, and efficiency cannot simultaneously reach optimal values). When the network is overloaded with too many remittance transactions, the speed of blockchain network settlement will be limited, and fees may also increase accordingly. Therefore, for stablecoins to achieve large-scale application in the payment field, more scaling measures are needed.
2.2 Traditional giants are actively embracing stablecoins
Recently, many traditional internet and retail giants have shown great interest in stablecoins. Both Walmart and Amazon in the US are exploring the issuance of their own USD stablecoins to reduce payment friction, accelerate settlement speeds, and lower costs associated with traditional financial channels. The stablecoin regulations in Hong Kong will officially take effect on August 1, with Ant International and Ant Digital expressing their intention to apply for a stablecoin license, while JD.com’s stablecoin is already in the second phase of sandbox testing. Traditional giants are actively embracing stablecoins.
Taking payment giant PayPal as an example, as of the end of 2024, the company had over 430 million active consumer and merchant accounts, with payment volumes exceeding $1.68 trillion. The USD stablecoin PYUSD launched in collaboration with Paxos has enabled stablecoin payments at millions of online stores. Given the substantial application scenarios that such payment giants bring, what is the current status of their stablecoin applications?
However, as of June 17, 2025, the supply scale of the stablecoin PYUSD is only about $950 million, indicating that its development is not going well. This seems surprising, but it relates to the competitive advantages of stablecoins. Taking USD stablecoins as an example, different issuers promise a 1:1 redemption of their stablecoin products against USD, and there is no difference in their values. Comparatively, in practical applications, the USD in different bank accounts is indistinguishable, yet even among USD stablecoins, different varieties face unavoidable competition, representing another manifestation of the programmable nature of stablecoins—from the perspective of computer program code, stablecoins are distinct.
In summary, as a new species, stablecoin products face a unique market competition logic. Even traditional giants face challenges in promoting products to capture market share in the new field of stablecoins, which require adherence to different market logic than before. Therefore, whether large companies or startups, there will be certain potential opportunities in the stablecoin field.
3. The market competition for stablecoins will be very fierce
3.1 'Non-homogeneity' determines the versatility of the scenario chain, which is key to competition
Although stablecoins of the same type are equivalent in value, stablecoins issued by different issuers still possess 'non-homogeneous' characteristics—after all, from the perspective of blockchain programs, cryptocurrencies fundamentally exist as different codes. Taking USD stablecoins as an example, although different types of stablecoins are promised by their respective issuers to be redeemable at a 1:1 ratio to USD, on the blockchain, just as different USB interfaces are not compatible, stablecoin varieties also exhibit certain 'non-homogeneous' characteristics. USDT and USDC, as leading stablecoin varieties, have different trading volumes for stablecoin trading pairs on the Coinbase exchange. Interestingly, the trading volume of USDC, as a stablecoin under Coinbase, is significantly lower than that of USDT. As shown in the figure below, referencing data from June 16, 2025, the trading volume for stablecoin trading pairs on the Coinbase exchange shows that USDC is about one-eighth that of USDT.
As the largest stablecoin variety, the versatility of USDT is key to its market competitiveness. It is well-known that stablecoins have widespread applications not only in centralized exchanges (CEX) but also across multiple public blockchain DeFi platforms (including decentralized exchanges DEX, staking lending platforms, derivatives platforms, etc.). Furthermore, even among communities in underdeveloped countries, USDT enjoys the broadest recognition and usage habits. USDT has over 400 million users in developing countries, primarily used for remittances, serving unbanked users, and as a dollar-denominated savings tool. Residents in some regions of Africa, Central America, and South America generally rely on USDT to hedge against local currency depreciation, demonstrating that USDT's acceptance service is also actively present in these areas.
It is the versatility of this application scenario chain that has made USDT the most widely accepted tool, becoming the largest USD stablecoin. As of June 17, 2025, USDT's scale exceeds $156 billion, while USDC's scale is approximately $61 billion.
Therefore, we believe that, in the context of stablecoin-related legislation being enacted, the issuance of stablecoins itself has little barrier (and the underlying infrastructure is often based on existing public blockchains). The key to scaling lies in the versatility of the scenario chain—whether a type of stablecoin can be used across multiple application scenarios and accepted by a broad user base—this constitutes the moat for stablecoin varieties. This is one of the key reasons why the trading volume of USDC, a stablecoin under Coinbase, is only one-eighth of that of USDT. The previously mentioned stablecoin PYUSD supported by payment giant PayPal has a scale of less than 1 billion USD, which we believe is due to this reason.
3.2 Opportunities and challenges for stablecoins in developing new payment systems
In traditional payment systems, the process of international payments is the most complex, involving multiple financial intermediaries, including payment institutions, intermediary financial institutions, and the financial institutions where user accounts reside, and it involves currency conversions. The lightweight account system of blockchain payment as settlement is distinctly different from traditional payments; thus, if stablecoins are to be integrated into traditional payment systems, corresponding infrastructure and services must be constructed.
The simplest scenario is that, for example, user A remits USD stablecoins to user B and converts them into HKD stablecoins. This will require designing exchange services between stablecoins. Additionally, the stablecoin account system needs to be integrated with the traditional fiat payment and settlement system. This necessitates the establishment of payment systems internationally, involving payment rules, regulatory regulations, financial service providers, and IT infrastructure.
The integration of stablecoins into traditional payment systems requires the construction of hardware infrastructure and services. Currently, stablecoins are mainly applied in retail payments and remittance scenarios, while the more promising market in the future is to expand stablecoins into B2B payments and cross-border trade payment systems. The stablecoin B2B payment and cross-border trade payment sectors are potential markets that the industry is continuously monitoring. Previously, payment giant Stripe acquired the stablecoin trading company Bridge for $1.1 billion, and the company recently announced that stablecoin financial accounts using Bridge technology now cover 101 countries/regions. These entities can receive payments via cryptocurrency or bank transfers and use stablecoins for global payments. Stripe is attempting to bridge stablecoin payments with traditional banking payment systems, which brings renewed development potential for stablecoins in the payment field. As illustrated below, users can use the stablecoin USDB (Bridge Stablecoin) issued and managed by Bridge, and stablecoins issued by Bridge can be exchanged with most stablecoins or fiat currencies through the Bridge Orchestration API (transfer, settlement address, and virtual account). Users send fiat currency or stablecoins to Bridge via the Bridge API and receive Bridge stablecoins (USDB); Bridge manages USDB reserve assets in separate bank accounts and treasury management accounts.
In other words, when users utilize the services provided by Bridge, they no longer deliberately distinguish between stablecoins (based on blockchain cryptocurrency accounts) or fiat currency (based on traditional financial accounts); Bridge integrates the two account systems in terms of payment, remittance, and settlement.
Therefore, it can be anticipated that in the process of stablecoins penetrating trade payments and international payment systems, similar intermediate services for fiat/ stablecoin integration and conversion will be indispensable. This new demand is expected to give rise to new business models among IT infrastructure providers and financial service providers.
Another challenge for stablecoin payments is payment efficiency. Traditional payment architectures are centralized computing architectures, which are beneficial for efficiency. Taking Alipay as an example, during the 2017 'Double 11' shopping festival, its peak payment rate reached 256,000 transactions per second. It is evident that traditional payment systems can serve hundreds of millions of users, achieving payment efficiencies of 100,000 transactions per second is not a significant issue. In contrast, due to the inherent decentralized architecture of blockchain cryptocurrency, efficiency is naturally limited. For example, the two public blockchains supporting USDT, Ethereum and Tron, can handle over 2,000 transactions per second on the Tron chain, while the Ethereum mainnet can only process transactions in double digits per second. Once trading activity increases, congestion will occur. The data presented here reflects an ideal (network idle) state; with increased network task loads, congestion will undoubtedly occur. The ability of blockchain networks to handle payments for millions of users will become a critical technological challenge that needs to be overcome.
4. Siphoning financial liquidity: Tokenization of US stocks (RWA) and Agent
The tokenization of US stocks is expected to accelerate, becoming an important application scenario for stablecoins, while the scale of the US stock market is sufficient to drive rapid expansion of stablecoin scale.
4.1 US stock tokenization: A new catalyst worth expecting in the second half of the year
Stablecoins themselves are a type of RWA (Real World Assets) that is cash-backed, lacking investment value but serving as an important on-chain 'fiat currency' with infrastructural tool functions. In addition to the application scenarios mentioned earlier, stock tokenization (Tokenized Equities) is expected to become the next major application market for stablecoins.
In recent years, stock tokenization had a brief moment during the development of the cryptocurrency market, with the most representative being the Mirror protocol, which provided users with various RWA products in the form of synthetic assets, including tokenized assets of US stocks such as Tesla, Google, Apple, and Microsoft (as shown in the figure below). However, due to regulatory issues and market volatility, stock tokenization gradually fell into silence.
In today's rapidly advancing regulation of RWA, the market is no longer satisfied with the yields of tokenized government bonds but is pursuing more flexible stock tokenization. Clearly, stock tokenization is a more attractive and vast market, offering more allocation choices for cryptocurrency investors with different configuration needs. This direction has gained consensus among traditional financial institutions and cryptocurrency organizations, and stock tokenization is expected to garner stronger regulatory lobbying. Traditional financial institutions, represented by BlackRock, and cryptocurrency institutions are actively advising regulators to promote stock tokenization. Recently, the cryptocurrency exchange Coinbase has sought approval from the US Securities and Exchange Commission (SEC) to offer 'tokenized stock' trading to users, highlighting the potential benefits of stock tokenization for cryptocurrency exchanges.
Prior to this, the established cryptocurrency exchange Kraken planned to offer tokenized US stock trading options to non-US customers. On May 22, all-crypto exchange Kraken announced a partnership with Backed Finance to launch a service called 'xStocks' for trading tokenized stocks and ETFs, covering more than 50 US-listed stocks and ETFs such as Apple, Tesla, and Nvidia.
It can be anticipated that stock tokenization is expected to accelerate, becoming an important application scenario for stablecoins, with the scale of the US stock market sufficient to drive rapid expansion of stablecoin scale.
4.2 AI Agent payments are another potential market
Stablecoins are a very friendly choice for AI Agent payments. In the future AGI world, AI Agents will replace humans in many tasks, inevitably involving payment processes. Traditional financial accounts, such as bank account payment processes, often require user authorization and financial institutions' reviews. This complex multi-node authorization workflow is not user-friendly for AI Agents. In many applications, AI Agents do not directly control accounts and payments—payment operations are still executed by staff, while stablecoins are built on lightweight blockchain accounts, making them very suitable for AI Agents to control accounts for payments.
We believe that Ethereum's introduction of smart contracts not only unlocked the scripting capabilities of blockchain but also perfectly integrated AI intelligent decision-making with account payments. In other words, AI Agents are no longer merely intelligent assistants providing analysis and suggestions; they can directly interact with user accounts, enabling Agents to control accounts. This is reflected in many applications of blockchain.
Taking intent-centric applications as an example, we see how AI intelligence integrates decision-making with payments. For instance, in the illustration below, a user wants to exchange Token A for Token B at a certain expected ratio (note that there may not be a ready A/B trading method available that meets the user's expectations). The user only needs to provide this demand goal; how the process unfolds, which specific liquidity pool is used, need not concern the user. Intent-based applications help users perform intelligent analysis to find the best trading path (or timing), functioning as an intelligent AI Agent. Through this intent AI Agent, as long as the user 'one-click' signs to authorize, the desired outcome can be achieved. In the specific process, the intent protocol will optimize the solution using AI algorithms based on potential liquidity 'routing', identifying the best path to achieve the user goal—this may involve multiple trading pools (i.e., exchanges on the blockchain) and other trading paths.
From the above analysis, we can see that the integration of signed transactions in blockchain accounts and AI algorithm solutions is highly intertwined. This provides a foundation for AI Agents to directly operate user accounts, meaning users can 'one-click' authorize their operational rights to AI algorithms. Moreover, this integration is universal, indicating that blockchain accounts are inherently smart contracts, inherently possessing AI genes, including flash loans, core protocols of decentralized exchanges DEX—such as the AMM (Automated Market Maker) protocol—all of which reflect this characteristic. After stablecoins enter the payment field, they may leverage AI Agents to liberate users' hands, providing significant imaginative potential.
5. Regulation and compliance of stablecoins: A compliant payment system still needs to be established
Establishing a stablecoin payment system is a systemic project. How can individual users and businesses safeguard their cryptocurrency assets? Individual users can manage blockchain assets through private keys, but considering the barriers to using and managing blockchain wallets, this is not a universal solution—after all, if individuals lose or forget their private keys, they completely lose the cryptocurrency assets in their accounts (blockchain accounts are decentralized, lacking a central server or super account privileges). For businesses, private key management is even more complex; the person who holds the private key has absolute control over the blockchain account's assets, which poses moral risks. Of course, companies can choose to entrust their cryptocurrency assets to professional institutions, such as the Bitcoin spot ETF product IBIT issued by BlackRock, whose underlying Bitcoin assets are custodied by professional institutions like Coinbase. If stablecoins are to be used as a payment application, their custody seems to bring many inconveniences during the payment process. In summary, this involves systemic construction related to asset security, internal controls, compliance, and coordination among multiple countries.
The regulatory challenges brought by stablecoin payments, especially the offshore nature of fiat currency. Currently, there is a regulatory vacuum regarding stablecoins in the payment circulation process. The widespread use of stablecoins for payments directly leads to the offshore nature of fiat currency. Globally, the CHIPS system (Clearing House Interbank Payments System) is primarily responsible for USD cross-border settlement, handling about 95% of total USD transactions globally (2020 data). Therefore, the US can regulate virtually all USD payment circulation worldwide, which is the basis for the US's extended jurisdiction over USD transactions. However, USD stablecoins issued on the blockchain possess characteristics such as 'payment as settlement' and decentralization, where payments and settlements are completed by the decentralized ledger of the blockchain. The US lacks effective regulatory and control measures over blockchain cryptocurrencies—almost any crypto payment transfer is beyond the control of the government or any other individual.
Thus, USD stablecoins issued on the blockchain are not subject to regulatory constraints, and the US cannot control their settlement. As previously described, the inherent characteristics of blockchain ledgers are resistant to regulation and censorship. Therefore, USD stablecoins are akin to 'offshore' USD. This is an unavoidable concern in the development of stablecoins. The United Nations Office on Drugs and Crime (UNODC) released a report in January 2024 stating that the USD stablecoin USDT, due to its ease of transfer and widespread acceptance, has become a primary tool for money laundering and fraud among criminals in Southeast Asia. This is a microcosm of how USDT contributes to the offshore nature of the USD.
In summary, the current state of stablecoins is that they are in a phase of initial application while simultaneously adapting to regulatory frameworks. Regardless, the demand for stablecoin applications and business logic has basically matured. The regulatory policies from the authorities in the US and Hong Kong will only serve to regulate the development of stablecoins and provide a clearer business logic for traditional financial institutions.
6. Investment recommendations: Focus on RWA and stablecoin-related sectors
We believe that with the promotion of stablecoin-related regulatory legislation in the US and Hong Kong, the rapid development of the RWA and stablecoin market will be ushered in. Currently, stablecoins and RWAs are primarily theme-based investments, and the market should pay attention to the application landing of US stock tokenization and the issuance of stablecoin licenses in Hong Kong as catalysts, suggesting a focus on RWA and stablecoin industry chain-related entities. Additionally, for innovative applications that are native to blockchain, attention should be paid to their catalytic and transformative effects on financial markets.
7. Risk warning
Blockchain technology R&D not meeting expectations: The blockchain-related technologies and projects underlying Bitcoin are in the early stages of development, with risks of R&D not meeting expectations.
Uncertainty of regulatory policies: The actual operation of blockchain and Web3.0 projects involves multiple financial, internet, and other regulatory policies, and the regulatory policies in various countries are still in the research and exploration phase, lacking a mature regulatory model, which exposes the industry to risks of regulatory policy uncertainty.
The commercialization of Web3.0 has not met expectations: The related infrastructure and projects of Web3.0 are in the early stages of development, presenting risks of commercial model implementation falling short of expectations.