Author: 1912212.eth, Foresight News
Original Title: The Global Stablecoin Year: A New Battlefield Between China and the United States
No one expected that in a gloomy moment of the crypto market questioning innovation, the "stablecoin super cycle" termed by Paradigm founder Matt Huang would arrive. Circle, the first stablecoin stock, has surged from $31 to over $298.99 since its listing on June 5th, creating nearly a 10-fold gain in less than half a month, with its dramatic wealth effect attracting crypto insiders to rush towards coin stocks.
Circle's stock market heat has reignited the crypto circle's focus on the stablecoin market.
Stablecoins were born in 2014, aimed at solving the problem of extreme price volatility in traditional cryptocurrencies. USDT, first launched by Tether, is one of the most representative stablecoins, with its value pegged 1:1 to the US dollar and supported by dollar asset reserves. The core concept of stablecoins is to use asset collateralization to maintain price stability, providing the convenience and decentralization of digital currencies while avoiding transaction risks from price fluctuations. In recent years, stablecoin adoption and application have grown exponentially, particularly in cross-border payments, DeFi, RWA, and other fields, with DeFi becoming the foundational asset for lending, staking, and yield farming.
[Rest of the translation continues in the same professional manner, maintaining the specified translations for specific terms]This layout is not only a manifestation of technological innovation but also a strategic game surrounding digital currency dominance and global financial rule-making, reflecting the deep-seated motivations of Chinese and American giants in seizing the initiative, maintaining, or challenging the existing monetary system in the stablecoin field.
Wang Yongli, former vice president of the Bank of China, pointed out that the United States protects and supports crypto asset mining and trading through legislation, even making it a national strategic reserve, supporting the legal operation of USD stablecoins, and actively seizing the high ground in crypto assets and stablecoins. This has significant and far-reaching strategic significance in enhancing U.S. Treasury demand and the international influence of the dollar, and China needs to fully recognize and actively respond. Li Yang, an academician of the Chinese Academy of Social Sciences and president of the National Financial and Development Laboratory, stated that on one hand, since any form of stablecoin cannot bypass the issue of monetary sovereignty, resolutely promoting RMB internationalization remains the core task of cultivating a strong currency (RMB). On the other hand, it must be recognized that the integration and development trend of stablecoins, cryptocurrencies, and the traditional financial system will be difficult to reverse. Stablecoins and cryptocurrencies will complement central bank digital currencies, comprehensively improving payment efficiency and reducing payment costs, and restructuring the global payment system.
As a "testing ground" for mainland China, Hong Kong's "Stablecoin Ordinance" has officially become law and will take effect on August 1st this year. Its main purpose is to regulate stablecoin-related activities and establish a licensing system for regulated stablecoin activities in Hong Kong. Financial Secretary Christopher Hui stated that "after the Ordinance takes effect, the licensing system will provide appropriate regulations for related stablecoin activities, marking a milestone in promoting Hong Kong's sustainable stablecoin and digital asset ecosystem."
Overall, the U.S. strategy involves embracing USD stablecoins issued by the private sector (such as USDC, PYUSD) and bringing them under regulation, aiming to leverage market forces and innovation to consolidate the dollar's hegemony in the global digital economy. China's strategy in the mainland focuses on the central bank-led digital RMB (CBDC). Allowing Ant and JD to apply for licenses in Hong Kong is more about using Hong Kong as a "testing ground" and "firewall" to explore offshore models of RMB internationalization and digital finance, serving international trade scenarios like the Belt and Road Initiative, with its essence being "offshore exploration".
[The rest of the translation follows the same professional and accurate approach, maintaining the original meaning and tone while translating into clear, fluent English.]In May 2024, PayPal announced that PYUSD will be launched on the Solana blockchain, aiming to leverage Solana's sub-second finality and extremely low transaction fees to enable faster and lower-cost transfers. Major wallets and onramp providers such as Crypto.com, Phantom, and Paxos were the first to integrate, helping users access PYUSD on the Solana chain.
This move not only expands the stablecoin's application in retail payments and cross-border remittances but also attracts developers to integrate PYUSD into acquiring systems, DeFi protocols, and Web3 applications. By June 2025, the PYUSD issuance on the Solana network exceeded $300 million. In the future, PayPal plans to extend PYUSD support to more Layer 2 networks and public chains, and continuously optimize smart contract functions to meet merchants' diverse needs.
Interestingly, Wall Street giants are not falling behind. In 2019, JPMorgan introduced JPM Coin for institutional clients, used for internal cross-border payments and clearing, with an average daily transaction volume of around $1 billion, demonstrating its high-frequency application value in institutional scenarios. However, JPM Coin is limited to Morgan's internal network and does not circulate on public chains.
In mid-June 2025, JPMorgan announced the launch of "JPMD" deposit tokens based on Coinbase's Layer 2 network Base. Unlike traditional stablecoins, JPMD represents actual bank deposits and plans to be included in federal deposit insurance, aiming to provide institutional clients with compliant, auditable digital deposit certificates while following strict KYC/AML processes to support near-real-time 24/7 settlement and liquidity management.
It is not difficult to see that these internet and financial monopoly giants are all entering the field, eyeing the new track of stablecoins.
Summary
In the future, the mission of stablecoins is to accelerate cross-border payment transformation, break the monopoly of traditional banks and SWIFT, achieve real-time global fund transfers 7×24 hours with near-zero costs, and become the core tool for remittances in developing countries and international trade settlement. Stablecoins will not only be a subset of cryptocurrencies but may also become a key force in reconstructing the global monetary order and financial infrastructure.
"Stablecoins are unlikely to completely replace traditional payment systems, but will gradually reconstruct value circulation paths with lower costs, stronger programmability, and global interconnectivity. In the short term, stablecoins will 'nested-replace' traditional payment systems in certain scenarios such as cross-border e-commerce, freelance settlements, and game advertising payments. In the medium to long term, stablecoins are expected to form a new generation of on-chain payment and clearing infrastructure, running in parallel with traditional systems and even gradually replacing traditional payment systems in some scenarios. In the long run, stablecoins will become an important pole of global payment infrastructure," Alex Zuo, Senior Vice President of Cobo and Head of Stablecoin Business, told Foresight News.
However, the risks faced by numerous companies entering the stablecoin track cannot be ignored. Liu Honglin, a lawyer from Shanghai Mankun Law Firm, told Foresight News that the issuance of stablecoins is a matter of governance structure, risk control boundaries, and regulatory dialogue.
First, the early structural planning must be clear. In Hong Kong, from the beginning, the operational path must be designed to comply with the "Stablecoin Ordinance", including license applications, reserve trust structures, information disclosure systems, and director compliance reviews. The "issue first, comply later" route is not allowed, and the Hong Kong Monetary Authority explicitly prohibits unlicensed issuance.
Second, compliance budgets should be fully reserved. Stablecoins are not a light-asset project; reserve fund custody, audit report preparation, IT system security testing, daily operations, and legal compliance personnel allocation are all long-term expenses. It is recommended to establish a dedicated compliance budget pool and set up third-party risk control mechanisms, such as regular external reviews.
Third, a neutral corporate governance system must be established. Avoid structural defects such as the parent company absolutely controlling the issuer, directors lacking independence, and major matters lacking internal review processes. The Hong Kong Monetary Authority has clear precedents for rejecting "non-transparent beneficial owners" and "uninsulated governance".
For ordinary users, to avoid the lessons of the UST collapse, users need to not only focus on the project's mechanism design but also pay attention to whether its "redemption promise is credible". Although Hong Kong and the United States continue to introduce regulatory measures, retail investors still need to be vigilant when choosing stablecoin asset allocations to avoid losses. "The core of stablecoins is not whether the technical means are innovative, and payment design can prevent systemic risks, but this does not mean that risks are eliminated," lawyer Liu Honglin frankly said.
