On June 5th, Circle, the issuer of the world’s second-largest stablecoin USDC, went public on the New York Stock Exchange, with its stock price surging 168% on the same day, becoming the new darling of the capital markets.

At the end of May, the United States and Hong Kong successively passed stablecoin legislation, proposing clear regulatory policies for stablecoins, giving fiat stablecoins that have always been in a gray area the opportunity to obtain legal status and integrate with traditional finance.

Marginalized stablecoins have finally gained acceptance in mainstream society and have rightfully stepped onto the global economic stage. The era of stablecoins has truly arrived!

The following article will discuss: the current development status of global stablecoins and the reasons for their rapid rise? What are the differences between the two stablecoin bills in the United States and Hong Kong, and what development ideas do they reflect? How will they compete?

An important indicator for measuring stablecoins is trading volume, but the data reported by different institutions varies.

The “Big Ideas 2025” report released by ARK Invest in February this year shows that the total trading volume of stablecoins in 2024 will reach $15.6 trillion, which is 119% and 200% of the transaction volumes of Visa and Mastercard, respectively.

However, the head of Visa introduced in a public speech that Visa’s transaction volume for 2024 is $16 trillion, and it can be said that the transaction volume of stablecoins is already on par with Visa.

A joint report released by analysis firms Dune and Artemis shows that from February 2024 to February 2025, the total transaction volume of stablecoins will exceed $35 trillion. However, if wash trading and bot activity are excluded, the transaction volume of stablecoins is $5.6 trillion, close to 40% of Visa’s transaction volume.

Any set of data is sufficient to prove the rapid development of stablecoins. After all, it has only been ten years since Tether invented the world’s first dollar stablecoin, USDT. In contrast, Visa, as a global payment network, has been established for nearly 70 years and has cooperation with more than 20,000 banks worldwide.

USDT is currently the largest stablecoin in the world and the third largest cryptocurrency, following Bitcoin and Ethereum. As of June 4th at 11 o’clock, the global circulation of USDT is 153.3 billion USD, with a trading volume of 67.2 billion USD in the past 24 hours, ranking first among cryptocurrencies.

USDT can be called a money printing machine, with fewer than 200 employees and a profit of up to $13.7 billion in 2024. However, it has been controversial due to the opacity of its reserve assets and lack of audits.

The second largest stablecoin is the newly launched USDC issued by Circle, with a global circulation of $61.5 billion and a trading volume of $10.5 billion in the past 24 hours, ranking 7th in cryptocurrency.

USDC has always taken a compliant approach, using USD and U.S. Treasury bonds as reserve assets, and complying with regulations such as KYC, anti-money laundering, and audits, but its profitability is far less than that of USDT. In 2024, Circle’s revenue was $1.676 billion, with a net profit of $156 million. However, it was still operating at a loss in 2021-2022.

USDT\USDC account for 95% of the stablecoin market, while other fiat stablecoins lag far behind them, including:

The USD1 issued by the Trump family in April this year has a circulation of 2.18 billion, with a trading volume of 219 million in the past 24 hours.

First Digital in Hong Kong issued FDUSD in July 2023, with a circulation of 1.59 billion USD and a trading volume of 4.59 billion USD in the past 24 hours.

PayPal’s PYUSD circulation at the end of 2023 is $979 million, with a trading volume of $8 million in the past 24 hours.

Investing.com reported in 2025 that the number of on-chain active addresses for stablecoins has exceeded 300 million, indicating that stablecoins have deeply integrated into the global financial system.

Why did stablecoins rise so quickly? Let me tell you a true story to help you understand the value of stablecoins for ordinary people: A few years ago, there was turmoil in Lebanon, and the government implemented financial controls, regulating that people could only withdraw $200 from the bank each day. Some had to resort to holding a gun to force the bank to give them their money because a family member was seriously ill and urgently needed a large sum of money.

Your money in the bank is just a number, and you need the bank’s approval to use it, which is a drawback of traditional finance. In contrast, cryptocurrencies exist on the blockchain and can be freely controlled anytime as long as you have internet access. This is one of the charms of stablecoins.

What other benefits do stablecoins have? In countries like Argentina and Nigeria, inflation can reach tens or even hundreds of percent, and currency can turn into worthless paper overnight. For locals, holding USD stablecoins is one of the choices to combat inflation and devaluation.

In fact, in Latin America, stablecoins have become the main currency for everyday payments and savings for ordinary people. In 2024, among the 30 trillion in stablecoin trading volume, Latin America accounts for about 10%, reaching 3 trillion.

Another important reason for the rise of stablecoins is cross-border payments. Traditional cross-border remittances go through SWIFT, which takes a long time and incurs high fees. Stablecoins enable peer-to-peer transactions without intermediaries, significantly reducing costs. For example, cross-border payments through Visa typically take 1-3 days and have an average fee of 6.35% of the transaction amount. In contrast, USDC transfers are settled in seconds, with fees as low as 0.1%-0.3%.

Sub-Saharan Africa and Latin America have become major regions for stablecoin remittance acceptance.

Research by Chainalysis found that in Ethiopia, where strict capital controls are implemented, the demand for USDC and USDT surged after the depreciation of the local currency in 2023, with the annual growth rate of retail stablecoin transfers reaching 180%.

From July 2023 to June 2024, Latin American countries received a total of $415 billion in cryptocurrency, a year-on-year increase of approximately 42.5%. In Mexico, over $60 billion is received annually in remittances from the United States, with the scale of stablecoin remittances growing increasingly large. Some institutions predict that in the next 3-5 years, about 30% of remittances between the U.S. and Mexico will be completed through stablecoins.

A very important trend is that in order to reduce the costs of cross-border payments, businesses in Latin America and Africa are increasingly using stablecoins. In Brazil, the proportion of businesses using stablecoins for cross-border payments has risen significantly, with large transactions over $1 million growing by approximately 29% by the end of 2023.

Institutions predict that by the end of 2026, the trading volume of stablecoin for use cases such as trade finance and payment processing will reach 1 trillion USD, accounting for over 1% of the global cross-border B2B payment market share.

In addition, with the rapid development of AI, stablecoins, as programmable currencies, will further reshape payments and finance under the support of AI. In the future global economic activities, stablecoins will play an increasingly important role. It is also for this reason that stablecoins have become the focus of innovation, regulation, and geopolitical competition among various countries.

In 2024, the European Union will begin implementing the Markets in Crypto-Assets Regulation (MiCA), which prohibits the issuance or provision of stablecoins in the EU without authorization. Meanwhile, the stablecoin bills in the United States and Hong Kong propose more specific regulatory measures for stablecoins.

The similarities are that both places require stablecoin issuance to be pegged to fiat currency at a 1:1 ratio, with monthly public disclosures of reserve asset composition and acceptance of audits; both require strict compliance with anti-money laundering (AML) and know your customer (KYC) requirements.

The difference lies in: 1. The United States is stricter: For US dollar stablecoins that do not hold US Treasury bonds as reserve assets or have not undergone US AML/KYC regulations, the US government will establish a non-compliance list and restrict trading in the US market.

In 2024, the North American market will account for 40% of stablecoin trading volume, and this restriction will be very impactful. The biggest impact will be on USDT; 2024 could be Tether’s most profitable year, as the upcoming compliance will significantly increase its costs.

The focus in Hong Kong is on regulating the Hong Kong dollar stablecoin. Whether in Hong Kong or abroad, any stablecoin pegged to the Hong Kong dollar will be subject to regulation. However, non-Hong Kong dollar stablecoins face more lenient regulations: they can be offered to retail investors in the Hong Kong market by applying for a license from the Financial Management Authority, while those without a license can only offer to institutional investors.

2. Hong Kong requires that issuers of stablecoins have a registered capital of no less than 25 million Hong Kong dollars, while the United States does not have explicit capital requirements, but must meet bank-level regulatory standards. However, considering compliance costs, this is also extremely unfavorable for small and medium-sized issuers.

3. Hong Kong better protects investors’ interests by implementing mandatory redemption regulations.

The stablecoin bill reveals the different strategic visions of China and the United States: the U.S. views stablecoins as an extension of dollar hegemony in the virtual world, linking stablecoins to the U.S. dollar to reinforce the dollar’s status as the global reserve currency, ensuring that stablecoins become a “U.S.-centric” global financial tool.

The reserve asset requirements for stablecoins have increased the demand for U.S. Treasuries. On May 23, U.S. Treasury Secretary Janet Yellen stated in an interview with the media: “Stablecoins could increase the demand for U.S. Treasuries and short-term Treasury bills by $2 trillion in the short term; as a reference, the current figure is about $300 billion.”

Although China strictly prohibits cryptocurrency on the mainland, it actively explores and lays out stablecoin innovations by using Hong Kong as a testing ground. The Hong Kong dollar stablecoin serves two purposes: firstly, to provide infrastructure for the development of the Web3 ecosystem in Hong Kong, and secondly, to circumvent the traditional financial system dominated by the West and establish new payment channels.

At the same time as the stablecoin legislation, the Hong Kong Monetary Authority launched a stablecoin sandbox program in March 2024, with six companies including JD Technology, Yuan Coin, and Standard Chartered Bank participating. Currently, these projects are still in the sandbox testing phase, and the trading volume of the Hong Kong dollar stablecoin is very limited. Currently, the dominant stablecoins in Hong Kong are still USDT\USDC.

Moreover, stablecoins are just one part of Hong Kong’s web3 ecosystem. On October 31, 2022, the Financial Secretary of Hong Kong released the “Policy Declaration on the Development of Virtual Assets in Hong Kong,” indicating Hong Kong’s goal and determination to become the global capital of web3. Over the past few years, the Hong Kong government has been quietly focused on building.

2023:

Hong Kong issues the world’s first tokenized government green bond;

The Hong Kong financial allocation plan has allocated 50 million HKD (approximately 6.4 million USD) for the development of the Web3 ecosystem, supporting certain enterprises, technological research and development, and community activities.

The Securities Regulatory Commission officially implements a regulatory framework for virtual asset trading platforms, with platforms like HashKey receiving approval for licenses, increasing the number of compliant exchanges.

2024:

The Hong Kong Stock Exchange has listed six virtual asset spot ETFs in Asia, including Bitcoin and Ethereum ETFs, making it the largest in Asia.

The Securities Regulatory Commission has approved 7 virtual asset trading platforms (including OSL, HashKey, HKVAX, etc.) and expanded regulation to virtual asset over-the-counter (OTC) trading, custody services, and staking.

The Financial Management Authority has launched the “Ensemble” tokenized asset sandbox project, supporting tokenization experiments of real-world assets (RWA) and attracting participation from institutions such as Ant Group and Standard Chartered Bank.

Promote collaboration between public chain platforms like Zetrix and Web3Labs, Summer Capital, to advance blockchain infrastructure construction and support government and enterprise-level applications.

2025:

The China Securities Regulatory Commission has released the “ASPIRe” roadmap, focusing on market access, protective measures, products, infrastructure, and relationships, aiming to promote transparency in the Web3 market through information disclosure and streamlined securities issuance processes.

Hong Kong hosted the “Consensus Hong Kong 2025” conference, focusing on the integration of AI and Web3, discussing emerging fields such as decentralized AI networks and AI agent platforms, attracting Web3 practitioners from around the world.

Hong Kong Cyberport has attracted over 270 Web3 demand enterprises, involving blockchain games, DeFi, infrastructure, and decentralized science (DeSci).

The Monetary Authority deepens the e-HKD policy, exploring cross-chain payment and cross-border trade applications of central bank digital currencies and Web3.

Although Hong Kong has not yet achieved remarkable results in building a web3 capital, it has generally completed its layout and has a clear roadmap.

Overall, the United States seeks financial hegemony in the virtual world, Hong Kong’s strategic focus is on the web3 industry, and the HKD stablecoin is still in its infancy. The great power competition has not yet come to fruition.

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