The Rise of the Stablecoin Ecosystem: From Circle's IPO to the Reshaping of the Global Digital Finance Landscape

Introduction

In 2025, the digital asset market will reach an important milestone as a financial technology company focused on stablecoin business successfully lists on the New York Stock Exchange. This marks the official entry of the US dollar stablecoin ecosystem into the public capital market, opening up a new blue ocean in the digital asset field. As a bridge between traditional fiat currency and the digital currency world, stablecoins have become the focus of competition among capital markets and financial technology companies due to their price stability, efficient low-cost cross-border payments, and deep support for innovative scenarios such as DeFi.

Against the backdrop of the booming global digital economy, the stablecoin ecosystem is experiencing explosive growth. Whether it is the influx of capital or the improvement of policy regulation, it highlights the key position of stablecoins in future global payments, cross-border settlements, and asset management. This article will delve into the layout of the stablecoin ecosystem, compliance logic, capital arbitrage opportunities, and global regulatory trends, comprehensively showcasing how stablecoins trigger a capital surge in the digital asset field.

The Background and Value of the Rise of Stablecoins

Stablecoins, as digital assets anchored to the value of traditional fiat currencies, have rapidly emerged in recent years, becoming an important component of the cryptocurrency market. Unlike the extreme volatility of mainstream digital currencies such as Bitcoin and Ethereum, stablecoins achieve price stability through a 1:1 peg to fiat currencies like the US dollar, significantly reducing the trading risks of digital assets. Leveraging blockchain technology, stablecoins not only enhance the efficiency of cross-border transfers and payments but also provide robust infrastructure support for diverse scenarios such as DeFi, digital asset exchanges, and global merchant collections.

The core advantages of stablecoins are reflected in three aspects:

1. Stable prices to avoid volatility risks The cryptocurrency market experiences extreme price fluctuations, and stablecoins are pegged to fiat currency values, ensuring the stability of transaction and settlement amounts, significantly reducing trading risks.

2. Cross-border transfer speed is fast and costs are low. Based on blockchain technology, stablecoins enable global transactions to be completed in minutes, far lower than the time and fees of traditional bank cross-border remittances.

3. Support for diversified financial applications Stablecoins are directly integrated into innovative scenarios such as DeFi lending, asset exchange, and digital goods payment, greatly expanding the usage boundaries of digital assets.

These advantages are difficult to achieve with traditional fiat currencies, greatly enhancing the convenience and efficiency of digital asset trading.

Stablecoin Ecological Layout

A company established in 2013 focuses on digital payments and blockchain finance, and has launched a USD stablecoin in collaboration with another well-known cryptocurrency exchange. This stablecoin is a centralized stablecoin pegged 1:1 to the USD, with all funds reserved in regulated banks in the United States and short-term government bonds, audited monthly by a third-party accounting firm to ensure the transparency and security of the reserve assets.

By June 2025, the market value of this stablecoin is approximately 39 billion USD, ranking it second among stablecoins globally. Its ecosystem is extensive, deployed across multiple public chains including Ethereum, Solana, Arbitrum, Optimism, Avalanche, Base, and Polygon, supporting exchanges, DeFi protocols, high-speed payments, and cross-chain asset transfers.

The company achieves the seamless transfer of its stablecoin across different chains without slippage through cross-chain transmission protocols, implementing a globalization strategy. In terms of compliance, the company strictly adheres to the regulatory requirements of the U.S. Department of the Treasury, SEC, and FinCEN. Transparent and public audit reports, along with a compliant reserve system, make it an important cornerstone of the digital dollar ecosystem. At the same time, the company collaborates with several global payment giants to actively promote the adoption of stablecoins in the global payment and settlement fields.

Overview of Major USD Stablecoin Projects

| stablecoin | Issuer | Total Market Cap (as of June 2025) | Reserve Structure | Compliance Attributes | |--------|-------------------|------------------------|----------------|-----------------| | USDT | Some Company (Registered in El Salvador) | Approximately 155.6 billion USD | US Treasuries, Cash, Repos, etc. | Partially Transparent, Previously Penalized | | USDC | A US company | Approximately $61.47 billion | Cash + short-term US Treasury bonds, clear audit | Fully compliant, cooperating with regulators | | FDUSD | A Hong Kong company | Approximately 1.481 billion USD | Bank deposits + Short-term securities | Regulated under the Hong Kong trust framework | | PYUSD | Certain payment giant + Certain company | Approximately $947 million | Custodial, mainly US Treasuries | Regulated by NYDFS | | USDe | A certain Singapore company | Approximately 5.6 billion USD | No cash, synthetic structure | No traditional collateral | | USD1 | Certain political figure's team | Approximately 2.2 billion USD | Fiat storage system | Third-party regulation |

The Underlying Logic of Stablecoins

In recent years, the stablecoin market has experienced explosive growth, driven by three core factors: regulatory vacuum, interest rate spread, and national competition. These factors work together to make stablecoins not only an important asset class in the digital currency market but also a new battleground for global financial capital.

1. Regulatory Vacuum --- From Barbaric 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 regulatory environment, on one hand, lowered the threshold for issuance, attracting a large amount of capital and projects to enter quickly; on the other hand, it also brought potential systemic risks. As various countries begin to introduce laws and regulations targeting stablecoins, such as the "Stablecoin Ordinance" that will be officially implemented in Hong Kong in August 2025, it brings regulatory norms and safeguards to the market. This institutional change not only injects confidence into industry development but also promotes the market to gradually move towards compliance and maturity.

2. Interest Rate Spread --- "Profit Gold Mine" in the Eyes of Capital

The issuer of the stablecoin manages the fiat funds exchanged by users and invests them in low-risk short-term government bonds, pledges Ethereum (ETH), or employs various strategies such as futures short-selling to achieve yields far exceeding bank deposit rates. Taking a stablecoin from a Singapore company as an example, it achieved an annualized yield (APY) of over 20% through ETH staking and futures arbitrage strategies, making it highly attractive in the market. Once ultra-high returns are obtained, funds quickly flow in, creating a capital accumulation effect that drives rapid growth in the scale of the stablecoin.

3. National Game --- Currency Hegemony and the New Battlefield of Digital Economy

Stablecoins are not only financial innovation tools but also the focus of international currency competition and digital sovereignty. A stablecoin supported by a certain political figure's team is attempting to create the "Digital Dollar Reconstruction Plan" to challenge the existing digital hegemony of the US dollar; meanwhile, Hong Kong is actively building a Hong Kong dollar stablecoin ecosystem to compete for the high ground in Asian fintech. Many countries in Europe, America, and Asia are striving to maintain monetary influence in the digital age through regulations and central bank digital currency (CBDC) pilots. Stablecoins have become a new battleground for countries around digital currency sovereignty and the global payment system.

4. The use cases are continuously enriching, gradually approaching the functions of fiat currency.

Stablecoins were initially used for internal transfers within the coin community, such as a certain well-known stablecoin that circulates widely in the cryptocurrency market. However, with the development of technology and application ecosystems, the functions of stablecoins continue to expand:

• Global trading and payments: Supports cross-border e-commerce and overseas remittances, providing fast and low-cost settlement methods.

• DeFi Lending and Yield: Become a major lending asset on DeFi platforms, where users can lend stablecoins to earn interest or use them as collateral for assets.

• Asset hedging tool: When the cryptocurrency market is volatile, investors can quickly convert to stablecoins to lock in asset value.

• Digital goods payment: Stablecoins are widely used as a means of payment in areas such as gaming, NFTs, and content creation.

As these diverse scenarios continue to mature, the use of stablecoins is gradually evolving from "coin circle tools" to "digital fiat currencies", resulting in an explosive growth in market size and capital attention.

New Round of International Financial Order Game

From state-led initiatives and pilot programs by commercial banks to participation from tech giants and on-chain native projects, stablecoins are transforming from a niche tool in the crypto space to a key entry point for the next generation of global payment infrastructure.

Many people do not realize that this wave of stablecoins is, in fact, a struggle among countries over "currency hegemony in the digital age."

As the United States continues to expand the influence of the dollar through stablecoins, Hong Kong is also actively building a stablecoin ecosystem and promoting the construction of an Asian Web3 clearing center.

On May 21, 2025, the Hong Kong Legislative Council officially passed the "Stablecoin Ordinance Bill" and completed the third reading process on the same day. The ordinance will officially take effect on August 1, 2025, making it the world's first jurisdiction to establish a comprehensive regulatory framework for fiat-backed stablecoins.

Hong Kong's introduction of the "Stablecoin Regulation" is not a passive regulatory measure, but rather a proactive consideration to seize the strategic high ground of the "next generation payment and clearing center:"

• The prototype of a global crypto payment system has taken shape, and stablecoins have gradually expanded from "settlement tools in the crypto world" to a mainstream choice for cross-border remittances, payments, and asset hedging;

• The US, China, Europe, and Japan are each accelerating the digitization of their currencies, 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 become the capital of bridges.

Therefore, Hong Kong is not just "plugging loopholes", but finding a new position to actively define rules between the coin circle and regulation. Hong Kong's long-term intentions are very clear:

• The digital Hong Kong dollar is led by the Monetary Authority, primarily through settlement within the CBDC system and pilot programs by financial institutions;

• The Hong Kong dollar stablecoin is market-driven and serves as a supplement or even a substitute in applications on open chains, overseas payments, and cross-border settlements.

This dual-track approach will enable Hong Kong to master two types of "issuance rights" in digital finance: one is official credit and the other is commercial efficiency.

In this new era of global currency competition, stablecoins have quietly become the technical carrier and symbol of influence for the next sovereign tools. The United States is using certain stablecoins as anchors to compete for settlement rights in the digital age; Europe and Japan are promoting independent strategies for the digitization of their currencies through regulations like MiCA; while Hong Kong has charted an independent path of "market-driven, institutional support" with its flexible and forward-looking regulatory framework and highly open market mechanisms.

In the future, when stablecoins become the infrastructure for cross-border payments, and when blockchain redefines clearing networks and asset expressions, those who can master the pricing power, access rights, and clearing rights of this system will gain an advantage in the new round of international financial order. And Hong Kong has already revealed its trump card.

Stablecoins are not just a revolutionary form of currency; they represent a deep game of digital sovereignty, financial order, and geopolitical discourse. In the future, more cities and countries will join this unnamed digital financial battle. However, at this moment, Hong Kong, which is at the table, is no longer a bystander.