In June 2025, US stablecoin giant Circle successfully listed on the New York Stock Exchange (NYSE), attracting widespread attention from capital markets and the crypto industry. Since its IPO in early June, Circle (stock code CRCL) shares have surged, at one point nearing $299 per share, with its market value quickly surpassing $71 billion. Furthermore, Circle's market capitalization has even exceeded the circulation size of its core product – the USD stablecoin USDC – making it one of the most eye-catching newly listed companies in the crypto industry. Circle's successful listing not only reshaped valuation expectations for crypto companies but also reflected global investors' high recognition of the stablecoin market's growth potential and prospects – as the global cryptocurrency and blockchain ecosystem rapidly evolves, stablecoins are accelerating their transformation from a medium of exchange and payment tool to a crucial component of global financial infrastructure. The demonstration effect brought by Circle's listing has brought unprecedented focus to the value and function of stablecoins. Whether in decentralized finance (DeFi) protocols, international payment clearing, or cross-border capital flows, stablecoins have demonstrated strong innovation momentum and broad application prospects.
What are Stablecoins?
A stablecoin is a type of cryptocurrency pegged to another asset, usually a fiat currency like the US dollar, with its core purpose being to eliminate price volatility through an anchoring mechanism, providing stability similar to traditional currencies. Unlike the dramatic price fluctuations of mainstream cryptocurrencies like Bitcoin and Ethereum, stablecoins generally maintain a stable value, thus being regarded as "digital cash" in the crypto sphere, often used for payments, value storage, and asset transfers. The vast majority of mainstream stablecoins choose a 1:1 peg to the US dollar, meaning that for every 1 stablecoin issued, there is an equivalent of 1 US dollar in assets backing it. Issuers hold actual US dollars or equivalent assets in bank accounts or regulated trust institutions, and users can convert stablecoins into US dollars at a 1:1 ratio at any time. This model ensures that every unit of a stablecoin is backed by real assets, offering higher security and transparency, but relies on centralized management.
Stablecoins and Their Compliance Framework
In June 2025, the US Senate officially passed the "Stablecoin Regulatory Act" (GENIUS Act), hailed by the industry as a "stablecoin milestone," marking a critical step in the global standardization of stablecoins on the path to compliance. The GENIUS Act not only represents the first attempt in US history to establish a unified regulatory framework for stablecoin issuance, management, and circulation at the federal level, but also greatly promoted international attention and consensus on a standardized, transparent, and compliant digital currency ecosystem. According to reports, the passage of this act will enable stablecoins to further serve as "underlying infrastructure for internet cash" within the US digital financial system, and also provide a referable blueprint for global legislation and regulation.
The GENIUS Act sets out detailed provisions for stablecoin issuers, reserve management, information disclosure, anti-money laundering compliance, and user protection, requiring all stablecoin products issued and circulated in the US to undergo federal approval and ongoing supervision. The act explicitly requires stablecoins to be backed by secure, transparent, and highly liquid assets (such as US dollars, US Treasury bonds) as reserves, and to undergo regular independent audits to ensure the security of user funds; it introduces higher standards in the area of anti-money laundering and combating terrorist financing, requiring stablecoin companies to collaborate closely with regulatory authorities to enhance financial transparency and traceability. Furthermore, for algorithmic stablecoins and new stablecoin businesses, the GENIUS Act also sets more stringent access and risk control thresholds, not only preventing systemic risks but also effectively protecting ordinary users and the stability of financial markets. Driven by the GENIUS Act, it is expected that developed economies outside the US will further accelerate their own stablecoin regulatory frameworks. For example, the EU introduced MiCA (Markets in Crypto-Assets) as early as 2024, setting strict licensing, reserve capital, and anti-money laundering standards for Euro stablecoins and various crypto assets. Major Asian financial centers – such as Singapore and Hong Kong – have also issued specific regulatory rules for stablecoins, clarifying compliance standards and licensing approval processes for stablecoin issuance, requiring stablecoin reserves to be high-credit-rated assets, and mandating continuous regular information disclosure.
It is worth noting that under the trend of converging US federal legislation and EU and Asian regulations, the stablecoin industry is also forming "quasi-unified" global compliance standards. The core elements generally focused on by regulatory authorities include: the security and liquidity of reserve assets, transparent information disclosure, robust anti-money laundering measures, user privacy protection, and traceability of technical operations. This series of measures not only provides clear rules of the game for market participants but also offers higher confidence and broader fair access for global users, further promoting stablecoins' deep penetration into global payment and financial infrastructure.
Advantages of Stablecoins in Cross-Border Payments and Clearing
Looking at the actual demands of global trade and personal capital flows, the traditional cross-border payment and clearing system has always been plagued by high costs, slow timelines, and insufficient transparency. For example, cross-border transfers using international banking networks like SWIFT often incur fees as high as $10 to $30 per transaction, and settlement times often range from one to three days, or even longer due to the presence of multiple intermediary banks. Additionally, complex processes and unforeseen intermediaries make the transfer of funds more time-consuming and laborious, while also leading to issues such as opaque processes, difficulty in tracking funds, and susceptibility to policy and geopolitical restrictions. In certain countries and regions with weak financial service foundations or strict capital controls, issues with cross-border capital inflows and outflows are even more severe, directly impacting the efficiency and security of capital flows for businesses and individuals in the era of globalization.
The emergence of stablecoins provides a systematic solution to these traditional cross-border payment pain points. Stablecoin networks based on blockchain technology operate 24/7, enabling real-time, peer-to-peer global fund transfers, greatly reducing the time for cross-border capital circulation. At the same time, the near-zero transaction fees of stablecoins minimize the cost of cross-border fund transfers, offering higher economy and flexibility for both small remittances and high-frequency corporate settlements. For instance, a traditional payment channel for a small remote remittance might incur significant fees and take multiple days to arrive, whereas via stablecoins, funds can arrive in seconds with negligible costs, improving user experience tenfold or more. Furthermore, all on-chain transactions are transparent and verifiable, enhancing the traceability and trustworthiness of fund flows, providing strong technical support for corporate compliance and anti-money laundering regulatory needs. For countries or regions that cannot easily access sovereign currencies like the US dollar, stablecoins also offer users a channel to bypass local financial controls and directly hold digital USD assets, thereby enhancing the inclusiveness and resilience of the global financial system.
As global payments, cross-border settlements, and new financial applications continue to expand, stablecoins are rapidly becoming the infrastructure of the digital economy, poised to thoroughly reshape and optimize the traditional cross-border financial landscape.
Stablecoins and the Global Expansion of the US Dollar
Stablecoin issuing companies have now emerged as significant holders of US Treasury bonds. According to the latest industry reports, stablecoin issuers typically allocate their reserve assets extensively to secure assets such as US Treasury bonds, short-term Treasury bills, and cash to ensure the stability of their USD-pegged coins. Data shows that as of the end of 2024, the total amount of US Treasury bonds held by stablecoin issuers accounted for approximately 0.5% of the total US Treasury bonds, ranking 17th among all US Treasury holders, surpassing sovereign nations such as Saudi Arabia. US Treasury staff believe that assets under stablecoin management could grow to $2 trillion. This can both promote/maintain dollar hegemony and act as a buyer insensitive to Treasury prices.
This trend indicates that stablecoins are not merely internet-native digital cash or payment tools, but are quietly becoming one of the levers of the US financial system. To ensure asset pegging and liquidity needs of mainstream USD stablecoins like USDT and USDC, issuing companies are continuously increasing their holdings of short-term US Treasury bonds. This not only boosts market demand for US Treasury bonds but also indirectly strengthens the US dollar's dominant position in the global financial system. Major stablecoin issuers, represented by Tether and Circle, have now become an emerging force driving liquidity and capital inflows into the US Treasury market. As widely discussed in the industry, stablecoin asset reserves effectively reinforce the US's monetary hegemonic attributes, allowing the dollar to penetrate global digital and traditional economic networks more efficiently. This dynamic inversely promotes the evolution of global foreign exchange reserve structures, with many economies experiencing capital outflow pressures or developing banking systems increasingly utilizing stablecoins to achieve USD asset allocation and liquidity, no longer relying entirely on traditional banking systems, foreign exchange controls, and cross-border clearing processes. Stablecoin companies therefore serve as crucial bridges connecting global emerging markets and core USD assets, not only providing reliable settlement hard currency for the digital economy but also offering additional assistance to the spillover of US fiscal and monetary policies. In short, the reality of stablecoin companies holding large amounts of US Treasury bonds not only ensures the stability of their tokens' value but also makes them a significant demand-side player for US Treasury bonds and a "digital hub" for the global expansion of the US dollar. This symbiotic mechanism's impact on the global financial landscape is continuously expanding.
From a global perspective, the rise of stablecoins is not merely the unleashing of financial innovation but a profound reflection of a new layout and upgrade in US dollar financial hegemony. In recent years, with the circulation of mainstream USD stablecoins like USDT and USDC reaching historical highs, and the US Congress passing the "Stablecoin Regulatory Act" to establish a unified federal regulatory system, stablecoins have become the "digital arm" of the US dollar in the global financial network, continuously strengthening the US's say and dominance over the global financial order.
The financial hegemony logic of stablecoins is primarily reflected in the fundamental characteristic of "dollar on-chain." The issuance of every USDC or USDT means an equivalent amount of US dollars or US Treasury bonds is locked within the US financial system and directly reaches global users via blockchain, without the need to rely on traditional clearing gateways like SWIFT or central bank settlement networks. This is equivalent to the US bypassing previous sovereign barriers and foreign exchange controls, allowing the dollar to be "airdropped" into phones and wallets in Latin America, Southeast Asia, and even Africa in a programmatic, real-time, peer-to-peer manner. This mechanism is seen as a "chain-based Bretton Woods system" in the 21st-century digital financial system, which not only further permeates global dollar circulation but also greatly enhances the attractiveness of US Treasury bonds and other dollar assets – the immense demand for US Treasury bonds from stablecoin reserves is expected to make them one of the largest holders of US Treasury bonds by 2030, strongly supporting the US government's fiscal policy and global financial stability. If 20th-century dollar hegemony relied on global energy trade, foreign trade settlements, financial infrastructure like SWIFT, and military projection, then 21st-century dollar hegemony relies more on digital financial infrastructure like stablecoins. This not only makes it easier for the dollar to penetrate global unbanked populations and underdeveloped countries but also grants the US government powerful digital "sanction capabilities" in financial regulation and asset freezing – for example, US regulators can precisely implement financial restrictions by freezing non-compliant on-chain addresses, controlling the scope and flow of on-chain dollar usage.
This new financial "attack and defense" battle based on stablecoins is far from just a competition between traditional Western financial institutions and emerging markets; it has evolved into a structural game of global monetary sovereignty and discourse power. Emerging economies and BRICS countries are attempting to promote local currency cross-border settlements, digital currency cooperation, and other de-dollarization measures, with some trade already bypassing the dollar. However, the reality is that the explosive growth of stablecoin platforms often ironically becomes a "digital safe haven" for people in developing countries to avoid local currency depreciation and high inflation during turbulent times. The US government is well aware of this, accelerating its actions in dominating global regulation and setting technical standards, from the GENIUS Act to industry self-regulatory standards, and then to promoting foreign policy, firmly bringing the stablecoin system under US legal and political control.
Summary
Stablecoins, as new infrastructure for the digital economy, significantly optimize global payment and clearing processes with their efficiency, low cost, and transparency. At the same time, by pegging to the US dollar and holding large-scale US Treasury reserves, they further consolidate the US dollar's dominant position in the global financial system. The "Stablecoin Regulatory Act" (GENIUS Act) passed by the US in 2025 established a unified federal standard for industry compliance, accelerating the formation of global regulatory consensus. Stablecoins have not only become a "digital extension" of US financial hegemony but are also promoting the digitalization and globalization of the world's financial infrastructure, with their development profoundly impacting the evolution of global monetary order and financial governance structures.
