Stablecoin: From Speculative Tool to Digital Financial Infrastructure

Stablecoins are transitioning from being mere cryptocurrency speculative tools to a new category of digital financial infrastructure. As of August 2025, the total market value of stablecoins has surpassed $270 billion, but more important than the scale is the differentiation in their composition, yield mechanisms, and application scenarios.

The market is undergoing a decisive shift: from purely liquidity-seeking dollar tokens to composable, yield-generating settlement assets that directly connect to real-world cash flows and corporate systems. This article will delve into the evolution of stablecoin types and the regulatory dynamics in different regions around the world.

Stablecoin Market Size

Stablecoins have broken the limitations of the crypto space. The supply growth is primarily driven by emerging institutional tokens such as USDT, USDC, and PYUSD. Today, the on-chain annual settlement volume of stablecoins has surpassed that of Visa and Mastercard combined—reaching $27.6 trillion in 2024 alone. Initially created as convenient tokens pegged to the dollar, they have now evolved into a mature, interest-bearing full-chain cash layer. Regulators, payment networks, and financial executives are gradually treating stablecoins with the same standards as bank currencies. A certain company successfully completed its IPO in June 2025, raising $624 million and achieving a valuation of $6.9 billion, highlighting the market's confidence in regulated stablecoin issuers.

As of August 2025, the total supply of circulating stablecoins is $269.5 billion. USDT dominates with $154.4 billion (57.3%), followed closely by USDC with $65.8 billion (24.4%). Other significant stablecoins include USDe (10.5 billion ), DAI (4.1 billion ), and USDS (4.8 billion ), while emerging or smaller stablecoins like FDUSD, PYUSD, and USDX each have a market share of less than 1%. This concentration reflects the dominance of traditional issuers and indicates that emerging stablecoins are facing pressure to differentiate themselves through compliance and strategic integration of financial infrastructure.

Stablecoins Are Transforming into Yield Engines

As the interest rates in the currency market surpassed 4% in 2024, issuers began tokenizing U.S. Treasury bonds and passing the coupon yield to holders. Currently, the market value of tokenized Treasury bonds has exceeded $5.8 billion, maintaining a quarterly growth rate of over 20% despite significant interest rate fluctuations. The broader RWA( real-world assets) tokenization—including short-term credit, accounts receivable, and even real estate shares—has pushed the total market value of on-chain RWAs to $35 billion, with analysts expecting it to surpass $50 billion by the end of the year.

The difference in 2024 lies not only in the scale of growth but also in the direct link between on-chain yields and real-world assets ( RWAs ). A year ago, holding stablecoins was merely for capital preservation; now, an annual yield of 4-10% ( APY ) can be obtained through the following structure:

• sUSDe: Generates yield through delta-neutral derivatives and basis trading, with a market capitalization of $3.49 billion.

• USDM: Tokenized short-term government bonds under the Bermuda regulatory framework, with a market capitalization of 47.8 million USD.

• USDY: Tokenized short-term government bonds with a market value of $636 million.

• Plume Yield Tokens: Cross-chain distribution currency market fund ( MMF ) yield, market value of 235 million USD.

This field deserves special attention. Currently, there are over $5.8 billion in tokenized national bonds in circulation, and the scale of interest-bearing stablecoins is compounding at a rate of over 25% per quarter. These assets blur the lines between stablecoins, money market funds, and tokenized fixed income products.

By the second quarter of 2026, interest-bearing stablecoins will account for more than 15% of the total supply of stablecoins, currently around 3.5%. They are no longer purely DeFi native products but are underlying assets that prioritize compliance and support composability, deeply integrated into the RWA ecosystem.

The Flow of Smart Money: Three Major Trends Shaping the Next Generation of Stablecoin Leaders

1. Enterprise-level integration

The stablecoin launched by a certain company is far from a marketing gimmick—this stablecoin, with a market value of $952 million, has been deeply integrated into a certain electronic wallet, supporting merchant reward functions. The digital token of a large bank has even achieved average daily transaction settlements exceeding $1 billion in the treasury system. As stablecoins accelerate their integration into ERP systems, payroll distribution, and digital banking architecture, we expect the scale of this field to grow tenfold.

2. Full-chain interoperability

The fragmentation of blockchain has hindered industry development, but certain protocols are addressing this challenge through full-chain functionality. The next generation of mainstream stablecoins will achieve the native full-chain characteristic of "one minting, universal across the network."

3. Regulatory certification builds a moat

"MAS certification" and "MiCA approval" have become key differentiating factors in the stablecoin market, especially creating practical distribution advantages in B2B and corporate capital flows. Tokens from compliant issuers will gain a trust premium in the secondary market.

4. Improvement of infrastructure maturity

In the CeFi field, a certain payment company acquired Bridge Network for $1.1 billion, signaling the determination of traditional payment giants to establish a stablecoin channel. In the DeFi ecosystem, certain liquidity hubs, stablecoin exchange pools, and collateral lending platforms have significantly improved capital efficiency. As the ecosystem matures, stablecoins are deeply embedded in various levels of the financial system, becoming a more trustworthy and well-functioning infrastructure.

The regulatory arbitrage window is closing

As of 2023, the issuance of stablecoins remains in a regulatory gray area. Today, this window is rapidly closing, and the latest regulatory landscape is as follows:

1. US ( GENIUS Act )

On July 18, 2025, the "Corporate Guarantee Notes and Regulatory Issuance Act" ( GENIUS Act ) officially took effect, marking a new era in the regulation of the US dollar stablecoin. This act, along with the 2025 "Digital Asset Market Clarification Act" ( CLARITY Act ), clearly defines compliant payment stablecoins as non-securities, aiming to provide regulatory certainty, enhance consumer protection, and maintain the competitiveness of the United States in the global digital asset market. Key points of the act include:

• 100% reserve requirement: stablecoins must be fully backed by cash and short-term US Treasury bills on a 1:1 basis. Reserve assets must not include high-risk assets (, cryptocurrencies or credit assets ) are prohibited, and no rehypothecation is allowed except for specific liquidity needs.

• Transparency and certification mechanism: Issuers must publish audited reserve reports monthly; the CEO/CFO must personally certify the accuracy of the reports.

• Bankruptcy protection clause: stablecoin reserves are independently custodied; holders' redemption rights take precedence over other creditors ( similar to bank deposit protection mechanisms ).

• Yield prohibition: Ban on algorithmic stablecoins ( such as UST) and certain reserve models; only fully collateralized "payment stablecoins" are recognized; prohibition on paying interest to holders ( to avoid being classified as securities ).

The GENIUS Act, by imposing strict reserve and transparency requirements, is expected to enhance consumer confidence and promote the wider adoption of stablecoins. A clear regulatory framework will also attract more institutions to participate, solidifying the United States' global leadership in the regulation of digital assets.

2. EU ( MiCA Regulation )

The EU "Regulation on Markets in Crypto-Assets" ( MiCA ) implements the following provisions:

• Licensing and regulatory requirements: Only licensed electronic money institutions or credit institutions are allowed to issue fiat-backed stablecoins (EMTs); the European Banking Authority (EBA) is responsible for regulating "significant" stablecoins; issuers of Euro/USD stablecoins must hold electronic money licenses or banking qualifications.

• Full reserve requirement: reserves must be anchored to circulation at a 1:1 ratio; over 60% of reserves must be held in EU banks ( major stablecoins ); only low-risk assets ( government bonds/bank deposits ) are allowed.

• Usage limit: When the daily trading volume of non-euro stablecoins exceeds 1 million transactions or 200 million euros; the issuer will be forced to stop expanding the usage scale.

• Algorithm stablecoin ban: A complete ban on algorithm stablecoins without substantial reserves; only redeemable prudently backed tokens are recognized.

As of July 2025, the European Banking Authority has received license applications from over 50 stablecoin issuers, including certain mainstream institutions that are adjusting their operations to comply with MiCA standards.

3. UK Regulatory Framework

The UK views stablecoins as regulated payment instruments, with key regulations including:

• Reserve requirements: Only allow fiat currency to fully collateralize stablecoins; reserve assets must be highly liquid assets such as bank deposits/short-term government bonds.

• Yield Ban: Prohibit the payment of interest to holders; the income from reserve assets belongs to the issuer ( for operational costs ).

• Licensing System: Issuers must obtain FCA authorization ( for new electronic money/payment institution license ); must meet prudential standards of financial institutions: capital adequacy requirements; liquidity management mechanisms; T+1 rigid payment commitment.

• Innovation-oriented: Encourage banks and licensed institutions to issue payment stablecoins; focus on developing application scenarios such as cross-border remittances/micropayments.

4. Singapore ( MAS regulatory framework )

The Monetary Authority of Singapore ( MAS ) has launched a tiered regulatory framework:

• Elastic licensing system: Issuers of stablecoins with a volume of less than 5 million SGD may choose to operate with a regular digital payment token license; exceeding this threshold requires applying for a major payment institution license and complying with specific stablecoin regulations.

• High-quality assets pegged 1:1: Reserve assets are limited to cash, cash equivalents, or AAA-rated short-term sovereign bonds; bonds from the issuing country of the pegged currency maturing within 3 months are accepted as reserves.

• Redemption Guarantee Mechanism: Users enjoy a 1:1 rigid redemption right to complete within 5 working days; unreasonable redemption fees are prohibited.

The newly added stablecoin issuance service license in March 2025 allows companies to focus on stablecoin business, exempting them from compliance burdens related to digital payment tokens. MAS clearly requires in Q2 2025 that stablecoin issuers must be banks or non-bank financial institutions registered in Singapore.

5. Hong Kong ( proposed regulatory framework )

The Hong Kong "Stablecoin Regulation" will come into effect on August 1, 2025, with key contents including:

• Full reserve requirement: The market value of reserve assets must be ≥ the face value of circulating stablecoins; limited to Hong Kong dollar cash, bank deposits, and Hong Kong and US government notes/bonds.

• HKMA mandatory licensing: All stablecoins issued/promoted in Hong Kong, including foreign currency-pegged stablecoins (, must be licensed; a certain group has announced it will apply for a license.

• Institutional-grade standards: Reserve assets must be independently custodied by licensed custodians; regular operational audit reports must be submitted; and a strict AML/CFT risk control system must be established.

Some banks and enterprises have established joint ventures to issue Hong Kong dollar stablecoins for cross-border payments. This regulation aims to connect with the digital yuan pilot and strengthen Hong Kong's position as an international financial center.

6. UAE ) regulatory framework

The Central Bank of the UAE ( CBUAE ) established a regulatory framework for stablecoins with the "Payment Token Services Regulation" effective June 2025, classifying stablecoins as "payment tokens." A representative case of a compliant stablecoin is AE Coin, which is pegged to the dirham, and the framework emphasizes reserve backing and transparency. Key provisions:

• Local stablecoin issuance: Only licensed entities registered in the UAE are allowed to issue dirham-pegged stablecoins; they must maintain full reserves and undergo regular audits.

• Foreign stablecoin restrictions: Only allowed for use in virtual asset trading; prohibited for local payments to maintain dirham sovereignty.

• Anti-money laundering compliance: Issuers and custodians must implement strict KYC; establish transaction monitoring systems to meet AML/CFT requirements.

• Digital Dirham ( CBDC ) plan: Central bank digital currency may reshape the payment ecosystem; a state-led digital payment system is prioritized.

The framework enhances confidence in local stablecoins such as AE Coin through strict reserve requirements, but restrictions on foreign stablecoins may hinder the overall development of the crypto market.

7. Japan's stablecoin policy

The amendment to Japan's Payment Services Act in 2025 established a globally leading regulatory framework for stablecoins, officially recognizing stablecoins as payment instruments starting from May 2025. Key innovation points:

• Elastic reserve requirements: The reserve asset ratio for trust-type stablecoins is relaxed to 50%; holding low-risk assets such as short-term government bonds from Japan and the US is allowed.

• New type of Zhongguo牌 license: Establish "electronic payment tool/cryptocurrency asset service intermediary" category; exempt the capital requirements for asset custody type intermediaries.

• Bankruptcy protection mechanism: Refer to 2