US-China stablecoin duel: Circle soared 10 times, triggering giants to grab the beach
Author: 1912212.eth, Foresight News
Original title: The First Year of Global Stablecoins: A New Battleground between China and the US
No one expected that at a time when the crypto community was crying out for market innovation, it ushered in what Paradigm founder Matt Huang called a “stablecoin supercycle.” Since its launch on June 5, Circle, the first stablecoin stock, has soared from $31 to above $298.99, and recorded a nearly 10-fold increase in less than half a month. Its exaggerated wealth effect once attracted insiders to rush into coin stocks to mine for gold.
Circle shares are popular in the US stock market, once again opening the crypto community's attention to the stablecoin market.
Stablecoins were created in 2014 to solve the problem of extreme price fluctuations in traditional cryptocurrencies. USDT, first launched by Tether, is one of the most representative stablecoins on the market. Its value is pegged 1:1 to the US dollar, supporting currency stability through US dollar asset reserves. The core concept of stablecoins is to use asset collateral to maintain the stability of currency values, so that they not only have the convenience and decentralized characteristics of digital currencies, but also avoid transaction risks caused by price fluctuations. In recent years, the adoption and application of stablecoins has grown exponentially, especially in the fields of cross-border payments, DeFi, RWA, etc., and the DeFi sector has become a basic asset for borrowing, pledging, and yield farming.
According to DeFilLama data, as of June 25, 2025, the global stablecoin market has surpassed about US$252.9 billion, of which USDT accounts for more than 62% of the market share, followed by USDC, which together accounts for more than 85% of the market share. Stablecoins have an on-chain transaction volume of around $20.2 trillion, close to 40% of global payments giant Visa's transaction volume, showing their importance in digital payments and cross-border settlements.
The stablecoin boom has even spilled over to Chinese and American giants. Since this year, many global tech and financial giants have accelerated their deployment in the stablecoin sector, setting off a wave of fierce competition. On the US side, PayPal announced that its dollar-anchored stablecoin PYUSD has been connected to the Stellar network, focusing on cross-border remittance and SME financing; Walmart and Amazon are also actively exploring issuing their own dollar-backed stablecoins with the aim of reducing payment costs and creating a closed-loop consumer ecosystem; and Shopify is cooperating with Coinbase and Stripe to support merchants to accept USDC payments based on the base chain, covering consumers in 34 countries.
The Asian market is also bustling. Ant International, a subsidiary of Ant Group, and Ant Math have both applied for a Hong Kong stablecoin license, positioning Hong Kong as the global headquarters to promote the construction of a compliant digital trading scenario. JD Coin Chain Technology expects to obtain a license in the fourth quarter of 2025. It plans to issue stablecoins anchored to the Hong Kong dollar and other currencies, focusing on cross-border payments, investment transactions, and retail payment scenarios.
The trend of stablecoins is trending
The Chinese and US giants all chose this moment to start entering the stablecoin circuit. What is the root cause of this? Was it a whim to catch up with the trend, or was it a well-thought-out strategic layout?
Fast, low friction characteristics, natural payment instrument
The traditional financial system faces many challenges in the digital economy era. In particular, it is inefficient in cross-border payments, fund clearing, and real-time settlement, making it difficult to meet the needs of rapid globalization and digitalization. Traditional banking systems rely on multiple layers of intermediaries and cumbersome processes, resulting in cross-border transfers that usually take several days and are expensive, seriously limiting the liquidity and efficiency of use of funds. Furthermore, in the process of digital transformation, traditional financial institutions need to redesign business processes and products and services, and many users suffer from bank cards being limited or even frozen due to policy factors.
In contrast, stablecoins supported by blockchain technology have become more efficient and flexible “digital cash” in the digital age due to their value anchored in fiat currency and price stability. Stablecoins can transfer funds in seconds without intermediaries, greatly reducing transaction costs and time costs, and improving capital utilization.
Imagine now that you need to transfer millions of dollars to a friend far away in the US. The other party only needs to provide you with a string of code numbers. Within a few minutes, your money will be transferred to the other party's account, and the processing fee is less than 1 dollar. There are no limits, no freezes, no huge processing fees, no financial certification requirements, and no waiting time for days. This characteristic has an absolute advantage in fields such as cross-border payments.
In stark contrast to this, banks' arrogance is ubiquitous. SIG partner Michael Yuan recently stated that his displeased experience at DBS Bank in Singapore “was questioned in various ways only because of receiving 200 yuan bank transfers, and was questioned at the front desk in order for the $1,000 bank to go to the bank headquarters with a passport.”
Many users in mainland China have been asked about their withdrawals by various types of banks, and social news that they are often asked to provide all kinds of certificates to open permission has been trending over and over again.
Stablecoins are programmable, easy to be deeply integrated with innovative applications such as DeFi, and support multi-scenario applications such as cross-border payments, supply chain finance, and retail consumption. Research shows that after replacing physical cash, stablecoins can not only maintain the credit intermediary function of the financial system, but may also promote an increase in credit supply and promote the digital upgrading of the financial system. As a result, stablecoins are gradually becoming an important bridge between traditional finance and emerging digital finance in the digital economy era.
The battle for digital supremacy: onshore vs offshore
China, the US, and global giants are entering the stablecoin sector one after another, and one of the profound driving forces behind it is the battle for digital hegemony. US Treasury Secretary Vincent made it clear during the June 2025 Senate hearing that stablecoins, especially stablecoins linked to the US dollar, will be an important tool for consolidating the US dollar's position in the global financial system. Against this backdrop, some analysts expect its stablecoin market capitalization to reach $2 trillion or more in the future.
On June 19, Bezent even tweeted again, “Cryptocurrency does not pose a threat to the dollar. In fact, stablecoins can reinforce the dollar's hegemony. Digital assets are one of the most important phenomena in the world today, yet they have long been overlooked by governments. This administration is committed to making America a center for digital asset innovation, and the GENIUS Act brings us one step closer to that goal.”
The US government has promoted the establishment of a federal regulatory framework for stablecoins through the “Genius Act”, which aims to strengthen the status of the US dollar as an international reserve currency and prevent other countries or digital currencies from challenging the hegemony of the US dollar. At the same time, retail giants such as Walmart and Amazon are also actively deploying stablecoins in an attempt to bypass traditional payment networks such as Visa and Mastercard, save billions of dollars in processing fees, and achieve instant settlement, thus competing for greater voice and market share in the global payment system. The US giants on the other side of the ocean are intensively deploying stablecoins, and mainland China and Hong Kong are also stepping up research on stablecoins and opening up convenient doors.
At the 2025 Lujiazui Forum, Central Bank Governor Pan Gongsheng announced the establishment of a digital yuan international operation center to launch a comprehensive reform of offshore trade finance services in the Lingang New Area of Shanghai. He also said that new technologies such as blockchain and distributed ledgers have promoted the booming development of central bank digital currency stablecoins, enabled payment and settlement to reshape traditional payment systems from the bottom, and drastically shorten the cross-border payment chain.
This layout is not only a reflection of technological innovation, but also a strategic game around the dominance of digital currencies and the power to set global financial rules. It reflects the deep motivations of Chinese and US giants to seize opportunities, maintain, or challenge the existing monetary system in the stablecoin field.
Wang Yongli, former deputy governor of the Bank of China, wrote that the US has passed legislation to protect and support the mining and trading of crypto assets and even become a national strategic reserve, supporting the legal operation of US dollar stablecoins, actively seizing the high ground in the field of crypto assets and stablecoins, and enhancing the demand for US treasury bonds and the international influence of the US dollar. It has significant and far-reaching strategic significance, and China needs to pay full attention to and actively respond. Li Yang, member of the Faculty of the Chinese Academy of Social Sciences and chairman of the National Finance and Development Laboratory, said that on the one hand, since no form of stablecoin can bypass the issue of monetary sovereignty and firmly promote the internationalization of the RMB, it is still the core task of cultivating a strong currency (RMB). On the other hand, it is important to note that the trend of integrating stablecoins, cryptocurrencies, and traditional financial systems will be difficult to reverse. Stablecoins and cryptocurrencies will achieve complementary development with central bank digital currencies, comprehensively improve payment efficiency and reduce payment costs, and restructure the global payment system
As a “testing ground” in mainland China, Hong Kong's “Stablecoin Regulations” have been determined to officially become law, and came into effect on August 1 this year. Its main purpose is to regulate stablecoin-related activities and establish a licensing system for regulated stablecoin activities in Hong Kong. The Secretary for Financial Services and the Treasury, Mr Hui Ching-yu, said, “After the Regulations come into effect, the licensing system will provide appropriate regulation for relevant stablecoin activities and is a milestone in promoting the sustainable development of Hong Kong's stablecoin and digital assets ecosystem.
Overall, the US strategy is to use market power and innovation to consolidate the US dollar's hegemony in the global digital economy by embracing dollar stablecoins (such as USDC and PYUSD) issued by the private sector and incorporating them into regulation. China's strategy is in mainland China, and the core is the central bank-led digital yuan (CBDC). Allowing Ant and JD to apply for a license in Hong Kong is more about using Hong Kong as a “testing ground” and “firewall” to explore the offshore model of RMB internationalization and digital finance, serving international trade scenarios such as the “Belt and Road”. The essence of this is “offshore exploration.”
The regulatory path is gradually becoming clear
Since Trump took office, the US has been expected to be friendly to the crypto market. The heads of various government departments have also held key positions as crypto-friendly people. The stablecoin side is also in constant motion. The US Senate passed the “National Innovation Act to Guide and Establish an American Stablecoin” (Genius Act) by 68 votes to 30 on June 17, 2025, marking the first time the US has approved major cryptocurrency legislation. The bill establishes a federal regulatory framework for dollar-linked stablecoins, requiring issuers to hold 1:1 reserve assets, comply with anti-money laundering regulations, and disclose reserve details every month. The aim is to enhance market transparency and consumer protection, while stimulating demand for short-term US treasury bonds and consolidating the US dollar's global position. On June 24, in an interview with well-known KolScottMelker, Senator Hagerty said that Trump is ready to sign the “Genius Act” and that the bill may soon be delivered to his desk.
The White House's head of cryptocurrency and artificial intelligence, David Sacks, said in an interview with FOX that the passage of the “Genius Act” was a major victory for the crypto community. According to analysis by some members of the crypto community, this bill may push the stablecoin market to reach $2 trillion by 2028.
Hong Kong, on the other hand, passed the “Stablecoin Bill” on May 21, 2025, establishing the world's first comprehensive regulatory framework for fiat stablecoins. Through the “value anchoring supervision” principle, issuers are required to license and maintain highly liquid reserve assets, attracting companies such as Ant and Jingdong. Improved regulations in both places have reduced policy risks and significantly promoted financial innovation and compliance development.
China-US corporate giants competition
In June of this year, Liu Qiangdong, chairman of the board of directors of JD Group, said that JD hopes to apply for stablecoin licenses in all major currency countries around the world, then achieve exchange between global companies through stablecoin licenses, reducing global cross-border payment costs by 90% and improving efficiency to less than 10 seconds. Meanwhile, JD expects to obtain a license in the early fourth quarter of this year and launch the JD stablecoin at the same time.
In the same month, Bian Zhuoqun, vice president of Ant Group and president of Ant Math's blockchain business, revealed that Ant Math has begun applying for a Hong Kong stablecoin license and has now had too many rounds of communication with regulators. Ant Math has listed Hong Kong as its global headquarters this year, and has completed a preliminary test of the regulatory sandbox in Hong Kong. JD, which has been moving a lot recently, already planned to issue stablecoins anchored 1:1 with the Hong Kong dollar in Hong Kong as early as last year. In May 2025, Liu Peng, CEO of JD Coin Chain Technology, announced the progress of JD stablecoins. “The first phase of JD stablecoins is tentatively issuing stablecoins anchored to the Hong Kong dollar and the US dollar. The test scenarios mainly include cross-border payments, investment transactions, retail payments, etc.” Subsequently, Liu Peng also said, “Self-operated e-commerce at the JD Hong Kong and Macau Station will soon support stablecoin shopping.”
In terms of expanding business scenarios, JD stablecoins focus on two major scenarios: cross-border payments and supply chain finance. In cross-border payments, a linked card was launched in partnership with Visa, the settlement cost was reduced from 6% of SWIFT to 0.1%, the time period was reduced from 3 days to 10 seconds, and the goal was to occupy 10%-15% of the global cross-border payments market by 2028. Furthermore, JD is exploring offshore RMB stablecoins (JD-CNH) to connect with the “Belt and Road” trade settlement and replace the SWIFT system.
Chinese internet companies are starting a path of exploration, but the ambitions of US financial giants such as Visa actually began as early as 2020, but they initially withdrew from the Facebook-led Libra (now Diem) project due to regulatory uncertainty.
With the gradual implementation of regulatory frameworks such as the US “Genius Act”, Visa adjusted its strategy and switched to cooperating with regulated stablecoin issuers. In 2025, Visa officially joined the Global Dollar Network (USDG) stablecoin alliance initiated by blockchain company Paxos, becoming the first traditional financial institution to participate in the alliance. This means that under a compliance framework, Visa indirectly obtains legal support for stablecoin issuance and settlement through alliance membership. Additionally, Visa is partnering with African cryptocurrency exchange Yellow Card to promote stablecoin payments in Central and Eastern Europe, Middle East, and Africa (CEMEA).
Visa's technical layout focuses on the seamless integration of stablecoins with existing payment systems. In 2023, Visa pioneered USDC stablecoin settlement, becoming the first global payment network to introduce stablecoins into the core clearing system. Its technical architecture is connected to on-chain smart contracts through the Visa Token Service, so that stablecoin payments can be embedded in business processes such as automatic settlement and billing. For example, Visa's cross-border payment API already supports real-time stablecoin settlement, shortening the delivery time of traditional cross-border payments from days to seconds and reducing costs to less than 0.1%.
Ant's predecessor, PayPal, also had plans for stablecoins. Since its launch on the Ethereum main network in August 2023, PayPal USD (PYUSD) has rapidly evolved from a peer-to-peer test to a multi-chain, enterprise-grade payment tool. The stablecoin was developed by PayPal in collaboration with Paxos Trust Company, and is backed by 100% collateral for dollar deposits, short-term US Treasury bonds, and similar cash equivalents; Paxos regularly issues reserve audit reports to ensure reserve transparency and regulatory compliance. From the beginning, PayPal has enabled users to seamlessly deposit and withdraw funds between PayPal and Venmo balances and Ethereum-based wallets, truly integrating traditional payment channels with decentralized finance channels to provide near-real-time settlement and global coverage.
In May 2024, PayPal announced that PYUSD has landed on the Solana blockchain to enable faster, lower cost transfers using Solana's sub-second determinism and extremely low transaction rates. Major wallet and deposit channel providers such as Crypto.com, Phantom, and Paxos were the first to access it to help users obtain PYUSD on the Solana chain.
The move not only broadened the stablecoin's application in retail payments and cross-border remittances, but also encouraged developers to integrate PYUSD into billing systems, DeFi protocols, and Web3 applications. As of June 2025, the circulation of PYUSD on the Solana network surpassed $300 million. In the future, PayPal plans to expand PYUSD support to more Layer 2 networks and public chains, and continue to optimize smart contract functionality to meet the diverse needs of merchants.
What's interesting is that the Wall Street giants aren't ready to lag behind either. In 2019, JPMorgan launched JPM Coin for internal use to institutional customers for cross-border payments and settlements within the bank, with an average daily transaction volume of about US$1 billion, demonstrating its value in high-frequency applications in institutional-level scenarios. However, JPM Coin is limited to the Morgan internal network and does not circulate on the public chain.
In mid-June 2025, JPMorgan announced the launch of the “JPMD” deposit token based on the Coinbase Layer 2 network Base. Unlike traditional stablecoins, JPMD represents actual bank deposits and is planned to be covered by federal deposit insurance to provide institutional customers with compliant, auditable digital deposit certificates while following strict KYC/AML processes to support near-real-time 24/7 settlement and liquidity management.
It is easy to see that these giants, which have formed a monopoly scale in the Internet and financial fields, have all gone down one after another and are eyeing the new stablecoin circuit.
Summarize
In the future, the mission of stablecoins is to accelerate the transformation of cross-border payments, break the monopoly of traditional banks and SWIFT, achieve 7×24 hour real-time payments and global capital flows with costs close to zero, and become the core tool for remittance and international trade settlement in developing countries. Stablecoins will not only be a subset of cryptocurrencies, but are also likely to become a key force in reshaping the global monetary order and financial infrastructure.
However, “stablecoins are unlikely to completely replace traditional payment systems; instead, they will gradually restructure the value circulation path with lower costs, greater programmability, and global connectivity. In the short term, stablecoins will “replace” traditional payment systems in some scenarios, such as cross-border e-commerce, freelance settlement, and game advertising payments. In the medium to long term, stablecoins are expected to form a new generation of on-chain payment and settlement infrastructure, “double track parallel” with traditional systems and even gradually replace traditional payment systems in some scenarios. In the long run, stablecoins will become an important part of the global payments infrastructure.” Alex Zuo, senior vice president of Cobo and head of the stablecoin business, told Foresight News.
However, the risks faced by many companies after entering the stablecoin circuit cannot be ignored. Liu Honglin, an attorney at Shanghai Mankun Law Firm, told Foresight News that the issuance of stablecoins is a conversation about governance structures, risk control boundaries, and regulation.
First, the initial structural plan must be clear. In Hong Kong, an operating path that complies with the Stablecoin Ordinance has been designed from the outset, including license applications, reserve trust structures, information disclosure systems, and directors' compliance reviews. You must not follow the “issue first, then comply” route, and the HKMA explicitly prohibits the act of issuing coins without a license.
Second, compliance budgets should be fully set aside. Stablecoins are not asset-light projects. Reserve escrow, audit report preparation, IT system security testing, daily operations, and legal compliance staffing are all long-term expenses. It is recommended to establish a special compliance budget pool and establish third-party risk control mechanisms, such as regular external reviews.
Third, a neutral corporate governance system must be established. Avoid structural defects where the parent company absolutely controls the issuer, the directors are not independent, and there is no internal review process for important matters. The HKMA has clear precedents of veto “beneficial owners are not transparent” and “governance is not isolated.”
As an ordinary user, in order to avoid UST's collapse, users need to pay attention not only to their project mechanism design, but also to “whether their payment promises are trustworthy.” Although Hong Kong, the US and other places continue to introduce regulatory measures, retail investors still need to keep their eyes peeled when choosing stablecoin asset allocations to avoid losses. “The core of stablecoins is not whether technical methods are innovative. Payment design can prevent systemic risks, but this does not mean risk elimination,” Liu Honglin admits.
