Executive Summary
The stablecoin market has experienced exponential growth since 2023, with total assets surpassing $250B as of mid-2025. This analysis examines key developments through the lens of Dr. Shen Jianguang's research at a CWM50 seminar, covering:
- Emerging trends in crypto assets
- Four stablecoin models and their applications
- Cross-border payment advantages
- Global regulatory shifts led by US policy changes
- Strategic recommendations for China's digital currency future
Part 1: Crypto Asset Market Dynamics
1.1 Market Recovery and Growth Trajectory
- Total crypto market cap reached $3.25T, with Bitcoin dominating at 60% share
- Stablecoins now represent 7.7% of total crypto assets ($250B)
- Post-FTX crisis rebound driven by institutional adoption and US policy shifts
1.2 Adoption Metrics (2025)
| Metric | Value |
|---|---|
| Global crypto holders | 560M |
| US adoption rate | 15% |
| China adoption rate | 4.4% |
| Active stablecoin wallets | 600M |
👉 Discover how stablecoins are transforming global finance
1.3 Central Bank Digital Currency (CBDC) Progress
- 100+ countries exploring CBDCs
Notable implementations:
- China: Retail CBDC (digital yuan)
- US: Private stablecoin focus
- Hong Kong: Tripartite approach (stablecoins, CBDC, virtual assets)
Part 2: Stablecoin Models and Applications
2.1 Classification Framework
Fiat-backed (90% market share)
- USDT ($160B)
- USDC ($60B)
- Crypto-collateralized
- Algorithmic (declining post-LUNA)
- Commodity-backed
2.2 Competitive Landscape
| Stablecoin | Market Cap | Key Differentiator |
|---|---|---|
| USDT | $160B | First-mover advantage |
| USDC | $60B | Full regulatory compliance |
| USD1 | $22B | Trump-affiliated issuer |
2.3 Real-World Applications
- Cross-border payments: 24-second settlement vs 4-5 days traditional
- Inflation hedging: Argentina's USDT adoption during currency crisis
- DeFi integration: TVL grew 120% in 2024 to $1.2T
👉 Explore stablecoin use cases in global commerce
Part 3: Global Policy Developments
3.1 US Regulatory Shift
Genius Act (2025) key provisions:
- Dual licensing (federal/state)
- Reserve requirements: US dollar-denominated assets only
- Encourages institutional participation (e.g., Walmart, Amazon stablecoins)
3.2 International Responses
| Region | Policy Status |
|---|---|
| EU | Stablecoin Framework enacted |
| UK | Draft legislation (2026 target) |
| Hong Kong | Sandbox to full licensing transition |
3.3 China's Strategic Opportunity
Offshore RMB stablecoin proposal:
- Phase 1: Hong Kong pilot
- Phase 2: Free trade zone expansion
- Potential to increase RMB's 3.75% global payment share
FAQ: Stablecoin Essentials
Q: How do stablecoins differ from traditional payment systems?
A: They enable direct peer-to-peer transactions without banking intermediaries, offering faster settlement (seconds vs days) and lower fees.
Q: What makes USDT more profitable than USDC?
A: USDT's $143B profit stems from avoiding global compliance costs, while USDC spends heavily on 100+ country licenses.
Q: Are stablecoins truly decentralized?
A: Most fiat-backed variants maintain centralized governance, though technical infrastructure may be distributed.
Q: Why is Hong Kong critical for RMB stablecoins?
A: Its mature financial ecosystem and dollar peg experience create ideal testing conditions before mainland expansion.
Q: How do regulators prevent stablecoin misuse?
A: Advanced blockchain analytics enable transaction monitoring, with freeze capabilities built into compliant systems.
Future Outlook
The stablecoin market is projected to exceed $500B by 2027, driven by:
- Institutional adoption in traditional finance
- Emerging market demand for dollar alternatives
- Technological advances in blockchain scalability
- Progressive regulatory frameworks globally
For China, strategic development of offshore RMB stablecoins could reshape international payment flows while maintaining financial sovereignty. The window for action narrows as US and EU systems consolidate their first-mover advantages.