Written by: Zuo Ye
From the underground businesses of Asia, Africa, and Latin America to the Indian diaspora in the Arabian Sea, an iron curtain has been drawn across the continents of the Third World.
Behind this iron curtain lies the barriers of all banks and FinTechs — Bank of America, large and small investment banks, non-bank institutions, Wall Street, K Street, the four major state-owned banks, as well as Washington and Silicon Valley.
These famous fortresses and capital movements are all located within the realm of TradFi, all influenced by stablecoins in one way or another, and have already come under the increasingly strengthened control of USDT and Sun Guo.
Tether's unfocused strategy
Messari just released the 2025 stablecoin report. Besides the logos flying everywhere and the business orders being filled to capacity, it can also serve as the opening speech for the stablecoin war. Whether it's payment stablecoins, cross-border settlements, or C2C remittances, they all rely on the alliance of USDT and TRON, with only USDC and CPN (Circle Payment Network) barely able to compete.
However, USDT's stablecoin kingdom is not stable. Sun Guo's TRON is too dominant, and Tether's thinking is too flexible. On the one hand, USDC 'shares profits' with Coinbase and Binance to devour the market, and on the other hand, Ethena captures hedging profits by binding CEX through a 'bribery mechanism'.
Image caption: Tether's non-stablecoin business, image source: @MessariCrypto
Gold Dollar —–> Oil Dollar —–> Stablecoin Dollar
In 2024, after surpassing BlackRock with a net profit of 14 billion dollars, stablecoins officially dispelled the shadow of the UST collapse and re-entered the mainstream view of various countries. This is the direct motivation behind the GENIUS Act, which specifically manages stablecoins. It is not only about making money with stablecoins but also about how they have surpassed entities in Germany and other countries to become new contractors for US Treasury bonds.
The combination of US dollars and US Treasury bonds appears to be the Oil Dollar on the surface, but behind it lies military hegemony. However, stablecoins are becoming the new dollar by changing the sales pattern of short-term debt. They are not just a supplement to the dollar, but a new form of dollar.
However, Tether's focus is not on challenging or reconciling but rather on BTC mining, password management, African solar nodes, and entering the institutional settlement market via Plasma, as well as having hobbies similar to Twitter co-founder Jack – to grow and strengthen Bitcoin.
Image caption: Tether releases password manager Pears, image source: @paoloardoino
On June 29, Tether CEO Paolo released an open-source free password manager, Pears. This does not directly strengthen Tether's business, but you can believe in Tether's technology and original intention. They do this out of passion, not for money.
Tether is different when it comes to Bitcoin.
Of course, this is just a daily pastime for the wealthy. In Tether's diversified investments, the construction of the Bitcoin ecosystem and payment networks is key. The former emphasizes the long-term value of Bitcoin, while the latter is a daily escape from Sun Guo.
Just to mention, Sun Guo and Tether are also estranged. Sun Guo attempts TUSD, USDD, and FDUSD to break free from strong dependency on USDT, while Tether frequently explores emerging networks. However, the two are tightly bound by fate. Bitcoin is true love, while Sun Guo is just an accident, yet they cannot be separated.
Tether's investment and construction for Bitcoin have remained consistent. The earliest USDT was issued on the Bitcoin Omni chain, but ultimately came to nothing. Recently, it has been deployed on the Bitcoin sidechain network Rootstock, and its supported Plasma also treats BTC and USDT as first-class citizens.
This fervor is hard to say is purely a 'sign' of orthodoxy; it feels more like true love. Anyway, I am not optimistic about the future of Omni and Rootstock. Bitcoin is fine as humanity's digital gold. Plasma has market prospects, but the competition it faces is too intense; it's far from when USDT dominated the payment field.
Orthodoxy struggle: Scar and Hyena Alliance
Great empires often fall due to internal strife; USDT's interest alliance is not solid.
Who is the true heir of Tether, Plasma or Stablechain? On the surface, it appears to be Plasma, but the relationship between USDT and USDT0 is ambiguous. USDT0 seems more like a side branch of Tether hidden outside of Plasma. The heir apparent struggle in the future will be very exciting.
Of course, this is internal conflict within the ecosystem, while externally, USDC leads towards compliance. The GENIUS Act clearly outlines compliance details. Previously, Circle had already communicated on-chain through CCTP and accepted the ISO 20022 standard into the SWIFT network, integrating both on-chain and off-chain.
If Circle is the Scar, then USDG is the Hyena Alliance. As the issuer of BUSD's predecessor Paxos, it competes with CPN, Stablechain, Plasma, and others. The Global Dollar Network (GDN) covers exchanges like Kraken, Bullish (evolved from EOS's parent company, holding 164,000 BTC), Bitcoin ecosystem giant Galaxy, and currently hot brokerage Robinhood.
Image caption: GDN members, image source: @global_dollar
Overall, there are currently four main teams in the stablecoin alliance.
USDT: Binance-Tron-Tether-Bitfinex
USDC: Coinbase-Circle-Binance
USDG: Paxos-Bullish-Galaxy Digital-Kraken-Robinhood
USDe: Ethena-Arthur Hayes-Bybit
It basically covers all aspects of payment, settlement, and pricing, but maintaining its operation is not glorious at all, mainly due to the 'bribery' mechanism. Convex, which originated from the Curve War, and Penpie and Equilibria, which shone during the Pendle War LST/LRT era, belong to this category.
They do not directly lobby relevant stakeholders but attract more funds through mechanism design to achieve a scale advantage over other competitors and take away more profit distributions from Curve or Pendle to their own users.
Lido's approach is simpler and more straightforward. It removes the threshold for more retail investors to avoid the investment of building their own nodes. They only need to pay fees to Lido. In this sense, Lido is the largest bribery platform for Ethereum.
USDC is similar; by distributing 60% of profits to Coinbase and Binance, it successfully obtained a market position second only to USDT. Earning less is still earning, but the strong binding relationship has its benefits. When USDC de-pegged to 0.87 during the SVB collapse, it was not abandoned by Coinbase.
Ethena's USDe falls into this category as well. Investors in USDe include almost all CEXs, such as Binance (YZi Labs), OKX, Bybit, Deribit, Bybit (Mirana), Gemini, and MEXC. They are basically open to anyone, which is its most ingenious aspect. These CEXs obtain ENA to hedge against arbitrage and stabilize coin prices.
Now, there is a slight crack in USDT's alliance. In the trend of institutional settlement, it not only lags behind USDC's entry but even Ethena has collaborated with BlackRock to issue USDtb and partnered with Securitize to issue the institutional chain Converge.
Following suit, USDG promises ecological participants 97% of issuance profits. Even if it means losing money to make a name for itself, it aims to take third place beyond USDT/USDC. The food delivery battle between red, yellow, and blue is amusing, but who will ultimately be hurt in the stablecoin war?
Conclusion
The long stablecoin war, starting from the issuance of USDT in 2014, has now entered its 11th year. The offshore RMB stablecoin appeared no later than USDT, and their operational scales are comparable. For instance, Huobi once directly supported RMB pricing, just like Kraken does now with USD pricing.
Hopefully, this time, the market can change the current monopoly situation and avoid the scenario where Bitcoin mining power pricing rights are handed over to others.
After all, water can flow back, but once money is gone, it never comes back.
