Since April 2025, a series of legislations related to stablecoins have attracted the attention of financial markets.
On April 2, the U.S. House Financial Services Committee passed the (STABLE Act of 2025); on May 19, the U.S. Senate voted to advance the (GENIUS) bill to the next legislative stage; on May 28, the UK's Financial Conduct Authority (FCA) released regulatory proposals regarding stablecoin issuance and crypto asset custody.
On May 30, the government of the Hong Kong Special Administrative Region published the (Stablecoin Regulation) in the official gazette. This series of actions has once again made stablecoins the focus of the market.
Stablecoins are a type of cryptocurrency that can be issued on a blockchain (public chain), but unlike regular cryptocurrencies, they achieve relative value stability by pegging to fiat currencies or other low-volatility assets. Depending on the pegged assets, they can be mainly categorized into the following three types:
• Fiat-collateralized: The issuer invests user funds in cash, central bank reserves, or short-term U.S. Treasury bonds, profiting from the interest rate spread of the held assets. For example, USDT and USDC fall into this category.
• Commodity collateralized: The issuer physically custodies gold, government bonds, commercial papers, and other physical or real-world assets (RWA) offline, with collateral stored in compliant custodial institutions, and on-chain tokens mapping the ownership shares.
• Crypto-asset collateralized: Collateral is completely locked in on-chain smart contracts. Represented by DAI, users generate stablecoins by collateralizing Ethereum or real-world assets; the protocol charges borrowers a stability fee and allocates part of the reserves to U.S. Treasury bonds.
Among them, USDT is undoubtedly the 'big brother'. Since its issuance in 2014, it has grown to become the largest stablecoin by market capitalization, accounting for 62% of the global stablecoin market cap, thanks to its 1:1 peg to the U.S. dollar.
The USDC, launched in 2018 by Circle and Coinbase, ranks second, accounting for 24%. Its characteristics include transparency and compliance, publishing audit reports monthly, and being 100% backed by cash and cash equivalents.
The global stablecoin market capitalization has grown from $5 billion in 2019 to $250 billion now. The demand for crypto trading provides the fundamental driving force, with over 80% of Bitcoin trades settled through USDT or USDC on cryptocurrency exchanges.
The demand for safe-haven assets in emerging markets has significantly increased. In countries like Argentina, where the annual inflation rate exceeds 100%, stablecoin trading accounts for 62% of local cryptocurrency trading volume, becoming a digital safe-haven asset against currency depreciation.
Today, the legislation related to stablecoins is continuously advancing, and its future development is full of imaginative possibilities; we might as well wait and see.
