Please imagine that you have a magical banknote,
no matter where you are in the world,
it can instantly turn into 1 dollar in cash.

Whether it's at a Starbucks in New York,
or at a 99 Speedmart in Malaysia,
or even buying equipment in an online game,
this banknote is always worth 1 dollar.

This is the basic concept of stablecoins —
a type of digital currency that is always pegged to the dollar.

Stablecoins act as a "translator" between the traditional financial world and
the world of cryptocurrencies.

They have the convenience of digital currencies
(24/7 transfers, borderless transactions),
and the stability of traditional currencies
(they won't fluctuate like Bitcoin, which can be $10,000 today and $8,000 tomorrow).

📌 How popular are stablecoins? The numbers are shocking.
Currently, the global market value of stablecoins has exceeded $250 billion,
with an annual transaction volume reaching $27.6 trillion.

How astonishing is this figure?
It has already surpassed the combined transactions of Visa and Mastercard,
the two major payment giants!

Among them, the two "big brothers" almost monopolize the entire market:
💥USDT (Tether):
occupies 60% of the market share, like the "Coca-Cola" of stablecoins.

💥USDC:
holds 24% of the market share, equivalent to "Pepsi."

The scale of cross-border payments is growing at an astonishing rate of 20%-30% per month,
currently reaching $50 billion per month.
What does this mean?
The monthly cross-border transfers using stablecoins
are equivalent to the GDP of a medium-sized country!

💹 Stablecoin companies = cash printing machines that make money effortlessly.

You might be curious,
how do stablecoin companies make money?
The answer is simple enough to make you jealous: interest income!

Taking Tether as an example,
it generates an annual profit of up to $13 billion,
with fewer than 100 employees,
resulting in a profit of over $100 million per employee!
This is even more "valuable" than Google and Apple's employees.

Their profit logic works like this:
Users give 1 dollar, and the company issues 1 stablecoin.
The company invests this 1 dollar into U.S. Treasury bonds or bank deposits,
earning an annual interest of 3%-5%.
When users want to redeem, the company takes back the stablecoin and returns 1 dollar to the user.

Just like a bank lends out depositors' money,
stablecoin companies operate like a "digital bank,"
and it’s a risk-free kind.

#Governments moving from fear to embrace
Initially, governments around the world viewed stablecoins
as a "flood beast."
But now, their attitude has turned 180 degrees.

🚩United States: From adversary to ally
The Trump administration now sees stablecoins as
a tool for "digital financial leadership."

Why?
Because every dollar of stablecoin issued
is equivalent to promoting a "digital dollar" globally.
This is much cheaper than deploying warships to maintain dollar hegemony!

🚩Battle for Asian financial center
Hong Kong and Singapore are in a "battle for stablecoin dominance":

Hong Kong has taken the lead in launching (stablecoin regulatory framework),
attracting giants like Ant Group and JD.com to enter the market.
Singapore has opened a regulatory sandbox, providing a more flexible testing environment.

Both places want to become the "capital of stablecoins in Asia,"
just as fiercely as they competed for the title of "Asian financial center" years ago.

🚩Global regulatory landscape divided into three parts

🌈Pro-open camp (UAE, Hong Kong, Singapore):
Welcoming stablecoins, providing a clear regulatory framework.

🌈Cautious inclusive camp (U.S., EU, South Korea):
Regulating but not prohibiting, requiring compliance.

🌈Clearly restrictive camp (Mainland China, Bangladesh):
Prohibiting or strictly limiting relevant businesses.

✨The "superpowers" of stablecoins:
Global payments that are available 24/7.

Imagine this scenario:
Sunday night at 11 PM,
you want to transfer money to a friend in the U.S. while in Shanghai.

🚦Traditional banks: Sorry, we are closed; please come back on Monday.

🚦Stablecoins: No problem, it will arrive in a few minutes.

This is the first "superpower" of stablecoins —
— 24/7 uninterrupted service.

✨The second "superpower" is the convenience of cross-border payments.

Traditional cross-border remittances require:
📌Fees: Typically 3%-8%.
📌Time: 1-5 working days.
📌Procedures: Various forms and identity verification.

Stablecoin cross-border payments:
✔Fees: Usually 0.1%-1%.
✔Time: From a few minutes to a few hours.
✔Procedures: Just one wallet address is enough.

A "lifeline" for high-inflation countries.
In high-inflation countries like Argentina, Nigeria, and Brazil,
stablecoins are used as "digital dollars."

For example, in Argentina,
the local peso can depreciate by more than 50% in a year,
ordinary people treat stablecoins as "digital safes."

The first thing they do after receiving their salary is to convert it into stablecoins,
to protect their wealth from being eroded by inflation.

It's like giving every citizen around the world a "dollar wallet,"
allowing them to bypass their country's monetary policy and use "digital dollars" directly.

🌈Real World Assets (RWA): Bringing reality "on-chain"

Recently, stablecoins have a new play —
— combining with real-world assets (RWA).

What are RWAs? Simply put,
they are assets in the real world
(real estate, stocks, bonds, solar panels, etc.) "digitized,"
allowing them to be traded on the blockchain.

The BUIDL fund launched by BlackRock,
tokenizes U.S. Treasury bonds,
allowing investors to purchase these "digital Treasury bonds" with stablecoins.
Hong Kong has even launched RWA products for photovoltaic power stations and charging piles.
In this process,
stablecoins play the role of a "universal key"
— they are the most important payment tool for purchasing these digital assets.

The "embrace" of traditional financial giants
Interestingly,
those traditional financial giants that once resisted cryptocurrencies
are now actively embracing stablecoins:

💖PayPal: Launched its own stablecoin PYUSD.
💖Stripe: Supports stablecoin payments.
💖OKX Pay: Equivalent to "blockchain version of Alipay + Yu’ebao."

These companies have discovered that stablecoins can help them:

#Reduce cross-border payment costs.
#Improve capital turnover efficiency.
#Explore new sources of income.

The "soft spot" of stablecoins
Of course, stablecoins are not perfect.

[Main risks include]
Regulatory risk: Policy changes may affect the legality of stablecoins.
Technical risk: Smart contract vulnerabilities may lead to loss of funds.
Centralization risk: Major stablecoins are issued by centralized institutions.
Reserve risk: If reserve assets encounter issues, stablecoins may "de-peg."

Historically, there have indeed been instances of stablecoin collapses,
for example, Terra's UST stablecoin collapsed in 2022,
causing significant losses for investors.

🎁 How will stablecoins change the world in the future?
Stablecoins are becoming an important part of global financial infrastructure.

🌈Reshaping cross-border payments:
Making international remittances as simple as sending WeChat messages.

🌈Promoting financial inclusion:
Providing financial services to those without bank accounts.

🌈Promoting digital economic development:
Providing payment infrastructure for Web3, metaverse, and other new economies.

🌈Changing monetary policy transmission:
Central banks need to rethink monetary policy tools.

Stablecoins are no longer "experimental products,"
but have become the "new normal" in the digital financial world.
They act as a bridge,
connecting traditional finance with the crypto world,
allowing ordinary people to enjoy the conveniences brought by blockchain technology.

Although regulatory policies are still being refined,
and technological risks still exist,
the development trend of stablecoins is already irreversible.

They are quietly changing our perceptions of money,
payments, and even the financial system.

Perhaps in the near future,
using stablecoins for payments will be as natural as
using WeChat Pay today.

At that time, when we look back at today's financial system,
we may feel that the era when one needed a bank to transfer money
is so "ancient."

The story of stablecoins has just begun,
and we are all witnesses and participants in this digital financial revolution.

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