Why has the stablecoin suddenly become popular? | Krypton·Finance
Author | Wang Hanyu
Editor | Zheng Huaizhou
In the just - passed June, stablecoins went from obscurity to popularity at a rapid pace.
During the Lujiazui Forum on June 18, Pan Gongsheng, the governor of the People's Bank of China, publicly mentioned stablecoins, sending positive signals from the regulatory authorities. On June 25, Li Bo, the deputy managing director of the International Monetary Fund (IMF), stated at the 2025 Summer Davos Forum that the IMF is collaborating with multiple institutions to formulate relevant standards and guidelines for stablecoins to assist countries in better implementing them.
Also on the 25th, Guotai Junan International's stock price soared nearly 200% after it was approved to provide virtual asset trading services in Hong Kong. It rose from HK$1.42 per share at the opening to HK$3.70 per share at the close.
During this period, dozens of securities firms successively released research reports on stablecoins. Data from the Wind platform showed that there were more than 50 roadshows and conference calls related to stablecoins held throughout June.
At the corporate level, Liu Qiangdong specifically mentioned stablecoins at a small - scale communication meeting before the "618" shopping festival, indicating that JD plans to apply for stablecoin licenses in countries with major global currencies. Ant Digital Technology, a subsidiary of Ant Group, previously established an overseas headquarters in Hong Kong and completed the pilot test in the Hong Kong regulatory sandbox. Currently, Ant Digital Technology has also initiated the application process for a Hong Kong license, and Ant International has announced that it will deploy stablecoin businesses in Hong Kong, Singapore, and Luxembourg.
Why did stablecoins suddenly become so popular in just over a month?
Reducing Excessive Dependence on the US Dollar
To explore the reasons why stablecoins have suddenly attracted so much attention, we first need to clarify what stablecoins are.
Stablecoins are a type of cryptocurrency whose value is pegged to a specific asset, usually a fiat currency. They are characterized by stable value, blockchain technology, high payment efficiency, low cost, and issuance by private institutions. Currently, USDT and USDC are the two mainstream stablecoins in the market, accounting for more than 90% of the market share, and both are pegged to the US dollar.
In other words, stablecoins are essentially a type of cryptocurrency.
Previously, in September 2021, due to concerns that they might impact the stability of the financial system, regulatory authorities completely banned cryptocurrency trading within China.
However, this restriction took a turn in June this year. Pan Gongsheng, the governor of the central bank, clearly stated at the Lujiazui Forum that a diversified global currency pattern should be established and proposed that the digital RMB and stablecoins have the potential to become new solutions for cross - border settlements.
He mentioned that the current global cross - border payment system has low efficiency and frequent geopolitical risks, and the traditional approach is difficult to meet future needs. With the development of digital technology, these limitations have been further magnified, making the search for new alternative solutions more urgent.
Obviously, the regulatory authorities' attitude towards exploring RMB - backed stablecoins has started to turn positive.
Morgan Stanley believes that an important background for this change is the further legalization of US stablecoins.
In May this year, the US Senate passed the "Guiding and Establishing US Stablecoin Innovation Act", abbreviated as the "GENIUS" Act. It requires that:
- The issuer must hold 100% US dollars and short - term US Treasury bonds and disclose the reserve composition monthly;
- Implement hierarchical supervision. Issuers with a scale of over $10 billion will be directly supervised by the Federal Reserve, while other issuers can be supervised by states;
- Restrict the access of overseas stablecoins;
- Prohibit misleading publicity and enforce anti - money laundering measures.
This means that US - dollar - pegged stablecoins, as "on - chain US dollars", will obtain legal status and may be incorporated into the global payment infrastructure, further expanding the dominant position of the US dollar in the global economy.
To reduce excessive dependence on the US dollar and achieve diversification in the international monetary reserve system that is evolving towards digitalization is undoubtedly the main demand of many economies at present. In June this year, Christine Lagarde, the president of the European Central Bank, also called for the reform of the international monetary reserve system during her visit to China.
Therefore, the positive signals released by the regulatory authorities' exploration of stablecoins can also be regarded as a milestone event in the process of RMB internationalization.
In this process, Hong Kong is undoubtedly the testing ground for the central bank to explore future payment alternative solutions. On May 30 this year, the Hong Kong Special Administrative Region Government published the draft of the "Stablecoin Ordinance" in the Gazette, and then announced the "Stablecoin Ordinance (Commencement) Notice" on June 6, clarifying that the ordinance will come into effect on August 1.
According to the above ordinance, all legal - tender stablecoins claiming to be pegged to the value of the Hong Kong dollar will be classified as "payment instruments" and will be regulated by a licensing system.
At the same time, the ordinance also sets similar constraints to the US "GENIUS" Act. For example, the issuer must hold 100% high - quality reserves, essentially establishing a 1:1 redemption mechanism; the issuer shall not pay interest on stablecoins to holders; licensed issuers must meet a series of operational control requirements, including anti - money laundering and counter - terrorism financing.
How to Use Stablecoins?
With the basic regulatory measures in place, how are stablecoins used? What advantages do they have compared with fiat currencies?
In terms of application scenarios, the most discussed topics about stablecoins in the market currently focus on the reconstruction of cross - border payments and the tokenization of RWA (Real - World Assets).
For the former, the most significant advantage of stablecoins is the potential to reduce the transaction costs of cross - border payments.
According to a report by the Zeping Macro Team, the previous traditional retail payment system was dominated by a few card organizations such as Visa and MasterCard. When consumers made a card - swiping purchase at a merchant, the transaction needed to be relayed and authorized through at least four main parties, including the merchant, the merchant's acquiring bank, the card organization, and the consumer's issuing bank, resulting in high transaction costs and slow settlement.
For example, the handling fees charged by card organizations in the US are usually 2% - 3% of the transaction amount. This cost is ultimately passed on to consumers through product pricing.
Limited by the clearing and settlement process between banks and institutions, merchants usually receive the actual payment for the purchase 1 - 3 working days later, which greatly occupies the cash flow.
Relying on blockchain technology, stablecoins can simplify and speed up the traditional bank payment system. Specifically, stablecoin payments involve the direct transfer of funds from the consumer's digital wallet to the merchant's digital wallet through the blockchain network, bypassing all intermediaries, thus eliminating transaction costs such as handling fees. At the same time, the arrival time is not restricted by complex processes and working hours, and "instant arrival" can be achieved.
In addition, the Zeping Macro Team also pointed out that stablecoins can build a global unified payment network: Based on an open public blockchain, stablecoins have the characteristic of being borderless, challenging the most core global network advantage of traditional card organizations.
Meanwhile, the RWA (Real - World Assets) tokenization market is also developing rapidly and has already had practical applications.
In short, RWA refers to the tokenization of tangible or intangible assets in the real world through blockchain technology, converting them into tradable digital tokens (Tokens) on the chain for global investors to buy and sell, thereby activating asset liquidity.
In August 2024, Ant Digital Technology successfully completed the first cross - border financing for new energy RWA in China in cooperation with Langxin, a mainland listed company. In December last year, Ant Digital Technology completed the first RWA project for photovoltaic physical assets in China with GCL New Energy, involving an amount of over 200 million RMB.
Ant Digital Technology believes that stablecoins will become an important "currency" for RWA scenarios. After RWA tokenizes assets such as new energy and gold through the blockchain, compliant stablecoins can be directly used as the pricing and settlement tools to achieve peer - to - peer transactions, simplifying the cumbersome processes formed by traditional cross - border payments that rely on centralized institutions such as SWIFT and banks, and reducing transaction costs.
For most ordinary people, the development of stablecoins is also expected to provide individual investors with an allocation option for low - volatility, cash - like assets. Not long ago, the Hong Kong Securities and Futures Commission approved 40 institutions to upgrade their licenses. The approved institutions can provide virtual asset trading services through comprehensive accounts. Among them are 38 securities firms, 1 bank, and 1 internet company. Guotai Junan International is the first Chinese - funded securities firm to obtain a full - fledged virtual asset license.
Who is Deploying Stablecoins?
With the "Stablecoin Ordinance" about to come into effect, Hong Kong has become the first region in the world to establish a licensing system for stable legal tender. The Hong Kong Monetary Authority will announce the first batch of stablecoin license lists from July to August, and the first - batch sandbox participants can officially apply for licenses.
So, which entities are currently actively involved?
Based on market information, Ant Digital Technology has applied for a Hong Kong stablecoin license; Liu Peng, the CEO of JD Blockchain Technology, publicly stated that the company plans to officially obtain a Hong Kong stablecoin issuance license in the early fourth quarter of 2025; a company under Lianlian Digital is collaborating with Circle Innovation Technology on a stablecoin project; Linklogis Technology is also working with Standard Chartered Bank on a stablecoin project.
In addition, ZA Bank is the first digital bank in Hong Kong to provide services for stablecoin issuers. China Everbright Holdings has invested in Circle, the "first stablecoin - related listed company" that went public on June 5.
On June 15, Gan Tian, the CEO of Huaxia Fund (Hong Kong), mentioned at a stablecoin seminar that "Huaxia Fund (Hong Kong) should be the only Chinese - funded asset management company in Hong Kong that has participated in three large - scale sandbox projects of the Hong Kong Monetary Authority."
Regarding the stablecoin sandbox, he said that initially there were three institutions in the sandbox, namely Circle Innovation Technology, JD Blockchain Technology, and Standard Chartered Bank. Huaxia Fund (Hong Kong) has cooperated with one of the potential stablecoin issuers and jointly submitted a cash management plan to the Hong Kong Monetary Authority.
He also mentioned that currently in the Hong Kong market, the banks most actively involved in the tokenized payment field are: Ant International, Standard Chartered Bank, HSBC, Deutsche Bank, ANZ Bank, etc. Chinese - funded banks have not been actively involved yet.
"Standard Chartered Bank is the most committed global commercial bank to Web 3.0 and has launched custody services in Luxembourg, Dubai, Singapore, and Hong Kong. HSBC, Deutsche Bank, and ANZ Bank are also actively following up."
When talking about the future of stablecoins, Gan Tian predicted in his speech that the global monetary system may converge towards a few mainstream stablecoins in the future, but this process needs to rely on a strong financial market and trading scenarios. He believes that Hong Kong's practice not only provides a new path for RMB internationalization but may also reshape the underlying logic of international financial infrastructure.
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