Huobi Growth Academy | Stablecoin In-Depth Research Report: Anchor Assets for the Next Round of Financial Revolution

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This article will conduct a systematic research on stablecoins, focusing on their types, development trends, regulatory landscape, sovereign competition, and investment opportunities.

I. Introduction: The Systemic Role of Stablecoins is Reshaping Global Financial Logic

Over the past five years, stablecoins have evolved from a crypto trading accessory to the core asset of on-chain finance, gradually embedding themselves into the global financial system. Against the backdrop of the Federal Reserve's interest rate hike cycle nearing its end, the impact on US dollar hegemony, and the quest for payment system efficiency, the role of stablecoins as "on-chain dollars" is being widely accepted. From the US passing the GENIUS ACT in July 2025, to G7 countries recognizing stablecoins as "digital dollar alternatives", to emerging markets incorporating stablecoins into their foreign exchange policy, a financial race around "anchored assets" has begun. Stablecoins are not only the liquidity engine in DeFi but also a key bridge between Web3 and the real economy. This article will conduct a systematic research on stablecoins, focusing on their types, development trends, regulatory landscape, sovereign competition, and investment opportunities.

II. Market Status: Trillion-Dollar Scale, Structural Differentiation, and Explosive Use Cases

Currently, the stablecoin market has exceeded $250 billion, presenting a highly concentrated landscape. Tether's USDT dominates absolutely, with a market value of $150.335 billion, accounting for 61.27%, almost single-handedly supporting half of the entire track. Following closely is Circle's USDC, with a market value of $60.822 billion, accounting for 24.79%. Together, they occupy about 86.06% of the stablecoin market, forming a typical "duopoly" monopoly. This pattern has been deeply embedded in the infrastructure of the crypto financial market, with USDT and USDC establishing strong usage networks and trust foundations in different regions and ecosystems.

USDT is currently the most widely used stablecoin, with advantages not only in market value and circulation scale but also in its global layout and extensive practical use cases. It is widely distributed across multiple mainstream blockchains like TRON, Ethereum, BNB Chain, and Solana, with its most active application on the TRON chain, accounting for over half of its total issuance. TRON's relatively low transaction fees have made USDT the first choice for OTC and CEX clearing in Asia, Latin America, and the Middle East. Meanwhile, USDT plays an irreplaceable role in cross-border remittances, stable value storage, and DeFi liquidity provision in emerging markets. For example, in countries like Venezuela, Turkey, and Nigeria with high inflation, USDT has become a practical "dollar alternative" for citizens, even a settlement tool in the gray financial system. This "on-chain dollar" role has gradually transformed it from a trading tool to a base currency, assuming part of the functional role of a "stable asset".

More importantly, Tether's profit model reflects its strong financial capabilities and capital market influence. In the first half of 2025, Tether achieved a net profit of over $5.7 billion, becoming one of the most profitable companies in the crypto industry. Most of its revenue comes from its large holdings of short-term US Treasury bonds, which not only support its stablecoin reserves but also give it actual influence in the short-term interest rate market. Research shows that for every 1% market share Tether occupies in US bonds, it could impact short-end interest rates by 3.8-6.3 basis points, with its structural penetration of the US Treasury market even exceeding some small and medium-sized sovereign countries' bond holdings. In this context, USDT is no longer just an on-chain tool coin but is gradually evolving into a "stablecoin financial institution", with its systemic impact on the global financial market on the rise.

In contrast, USDC's development path is more focused on "compliance" and being institution-friendly. It has higher trust and integration in the US domestic market, financial service system, and Web3 enterprise payment end. Circle continues to collaborate with regulatory bodies and advance transparent audits, legal reserves, and stable rate distribution, attempting to construct a "standard paradigm" in the stablecoin field. However, this development path, cautious at the cost of agility, makes USDC appear relatively conservative in high-speed trading markets like Asia. It more serves as a "trust stablecoin" in DeFi, characterized by safety and audit traceability, favored by TradFi and CeFi fusion institutions, but still lacking in grassroots circulation and transaction frequency compared to USDT.

Although the USDT and USDC duopoly is unlikely to be broken in the short term, emerging stablecoin projects have risen strongly in recent years, becoming new variables in the market structure. The most representative is USDe launched by Ethena, a "synthetic stablecoin" supported by hedging ETH perpetual contract positions and yield protocols. Since its launch in early 2024, USDe's market value has surged from $146 million to $4.889 billion, a growth of over 334 times, becoming one of the fastest-growing stablecoin projects in recent years. Its growth is partly due to the hot "DeFi fixed income" narrative and partly proves the market's real demand for non-custodial, contract-driven stable assets. Additionally, USD1, USD0, and others have gained capital favor in different narrative tracks and are gradually entering specific stablecoin use case demands. However, in terms of market value and user base, these emerging stablecoins have not yet formed the ability to shake the mainstream landscape, and their development still needs further consolidation in risk control, market adaptation, and liquidity construction.

Overall, the current stablecoin market has entered a stage of extremely high concentration with a clear dominant pattern. Through extreme scale, powerful on-chain circulation capabilities, and penetration of macro-financial instruments, USDT has become one of the most systemically important assets in the crypto economy. USDC represents the direction of compliance and transparency in stablecoin development, with stronger institutional trust value. Emerging stablecoins provide experimental, diverse choices, injecting vitality into the market. As global crypto regulatory policies gradually take shape, the stablecoin market will face both the challenges of compliance reshuffling and enjoy the dividends of financial disintermediation. Whether USDT can maintain its dominant position, whether USDC can expand its influence boundaries, and whether emerging stablecoins can break through will remain the core focus of market evolution in the coming years.

III. Regulatory Game: Stablecoins as a New Variable in Financial Stability

The rapid development of stablecoins is pushing an asset category originally belonging to the "crypto edge tools" to the center of macro-financial policy and regulatory discussion. As its scale continues to expand and its uses become increasingly widespread, stablecoins are no longer merely a technical innovation or decentralization experiment but have become a key variable that may affect monetary policy, capital flow, and even systemic financial risks. Global regulatory bodies are experiencing a subtle and profound power reconstruction game in the face of this trend: on one hand, they are trying to establish rules and boundaries for this new asset type to maintain the stability of the traditional financial system; on the other hand, they must also acknowledge that stablecoins are filling gaps in the existing financial system, particularly playing an increasingly important role in cross-border payments, dollar alternatives, and financial inclusion.

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Currently, major economies have not converged on a regulatory path for stablecoins, instead showing clear strategic divergence. Taking the United States as an example, its regulatory agencies have been embroiled in long-term policy debates on stablecoins. On one hand, multiple departments such as the U.S. Treasury, SEC, and CFTC have offered different interpretations of stablecoins' nature, with no consensus on core issues like "whether stablecoins are securities", "whether they belong to the payment system", or "whether they should be issued by banks". On the other hand, the U.S. dollar-dominated international financial order makes it difficult for the U.S. to ignore stablecoins' potential impact on monetary policy transmission mechanisms and international financial status. Tether's holdings of hundreds of billions of dollars in short-term U.S. Treasury bonds have already measurably influenced money market interest rates, making stablecoins no longer a shelved "crypto issue", but an actual financial variable. Recently, the U.S. Congress has gradually promoted the Clarity for Payment Stablecoins Act, strengthening a regulatory framework of "issuer licensing, reserve auditing, and bank custody", attempting to provide clear market expectations, but this process is destined to be slow amid political and technical negotiations.

In the European Union, the situation is slightly different. The EU was the first to introduce a comprehensive crypto-asset regulatory framework, MiCA (Markets in Crypto-Assets Regulation), which specifically established two regulatory categories for stablecoins: "Electronic Money Tokens (EMT)" and "Asset Reference Tokens (ART)", setting relatively strict requirements for transparency, reserves, capital, and issuance limits. Although MiCA is widely viewed as one of the "world's strictest" crypto-asset laws, its introduction also sends a clear signal: regulators no longer seek to suppress crypto but intend to incorporate it into the system with institutional constraints. For stablecoin issuers, entering the European market will require obtaining local licenses and accepting central bank-level regulatory requirements, undoubtedly raising market entry barriers and potentially driving large stablecoin issuers towards compliance.

Meanwhile, the Asian regulatory landscape presents a state of pragmatism and competition. For instance, Singapore, Japan, and Hong Kong have relatively flexible stablecoin regulatory frameworks, emphasizing balance between risk management, user protection, and financial innovation. The Hong Kong Monetary Authority recently explicitly supported fiat-pegged stablecoins, even proposing the possibility of promoting a "local Hong Kong dollar stablecoin", demonstrating an open policy attitude towards the prospects of "regionalized on-chain currency". Middle Eastern Gulf countries like the UAE and Saudi Arabia are also actively introducing stablecoin clearing mechanisms, promoting coexistence of central bank digital currencies (CBDC) and stablecoins, aiming to build next-generation cross-border payment networks. It's evident that amid U.S. and EU regulatory uncertainties, more emerging markets are attempting to leverage stablecoins to compete for financial technology rule-making discourse.

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Here is the English translation:

Secondly, the trend of multi-currency anchoring is accelerating. Although USD stablecoins remain the market's main force, the global de-dollarization regulatory trend is becoming increasingly apparent, prompting the crypto market to develop local or commodity stablecoins anchored to currencies like the Euro (EUR), Japanese Yen (JPY), Renminbi (CNY), Hong Kong Dollar (HKD), and even gold. These diversified stablecoins not only benefit localized payment scenarios but could also become important tools for emerging market residents to hedge against local currency depreciation and inflation. For example, Stasis's EURS, Monerium's EURe, and various HKD stablecoin experiments are gradually expanding the non-USD stablecoin ecosystem. In markets like Asia, Africa, and Latin America, especially in countries with strict capital controls, stablecoins have become crucial "intermediary currencies" for grey economies, crypto remittances, and e-commerce, creating actual demand for multi-currency stablecoins.

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However, the limitations of the protocol's native token are that its scale growth strongly depends on the market position, risk management capabilities, and community activity of the protocol itself. In extreme cases, a risk loop of "protocol decline - stablecoin liquidity drought" may occur.

In the long run, who can win the stablecoin war depends on five core capabilities:

A robust anchoring mechanism (whether traditional fiat currency reserves, on-chain asset hedging, or composite structures) is the technical foundation for the long-term survival of stablecoins;

User-side penetration capability, that is, whether it can be widely used in scenarios such as exchanges, payments, lending, cross-chain, and settlement, avoiding becoming a "spinning coin";

Policy compliance ability and regulatory interface paths, especially in financial fortress markets such as Europe, the United States, Southeast Asia, and the Middle East, which determine its growth ceiling;

Synergistic relationship with the on-chain ecosystem, particularly the embedding degree and native liquidity support of DeFi protocols;

A sustainable value capture logic that can provide long-term confidence to holders through governance, profit distribution, and token economic structure.

Stablecoins are not "decentralized dollars," but bridge assets in the process of global monetary architecture reconstruction. They must stand at the crossroads of regulation, liquidity, and trust, while navigating through market fluctuations and technological evolution. In the future, the stablecoin war will not produce a single winner, but rather a multipolar landscape with breakthroughs in different models, ecosystems, and user scenarios. What truly deserves investors' attention are those bridge projects that can traverse regulatory storms, build on-chain monetary systems, and ultimately connect real-world economics with virtual finance—these will be the "sovereign assets" of the crypto world.

VI. Conclusion: Stablecoins are the "Sovereign Anchor" of On-Chain Finance

Stablecoins are not speculative assets, but the core operating mechanism of the entire on-chain economy. They are the dollar blood of the DeFi system, the energy of Web3 payments, and the safety belt for emerging countries to hedge against local currency depreciation. In the next five years, stablecoins will no longer be a "supporting role" in the crypto market, but will become a key component of the new digital capitalist order. This moment is the starting point for systematic layout of the stablecoin track, not the end point.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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