Stablecoin ecosystem explodes: from Circle IPO to global digital currency landscape transformation

introduction

In 2025, the digital asset market ushered in a new milestone - Circle successfully landed on the New York Stock Exchange, officially becoming one of the first listed financial technology companies with stablecoin business as its core. This listing not only marks the entry of USDC and the US dollar stablecoin ecosystem into the public capital market, but also opens up a new blue ocean in the field of digital assets. As a bridge connecting the traditional legal currency and the digital currency world, stablecoins are becoming the core battlefield for capital markets and financial technology companies to compete for with their stable prices, efficient and low-cost cross-border payments, and deep support for innovative scenarios such as DeFi.

Against the backdrop of the rapid development of the global digital economy, the stablecoin ecosystem has experienced explosive growth. Whether it is the influx of capital or the gradual improvement of policy supervision, stablecoins have demonstrated their key role in the future global payment system, cross-border settlement, and asset management. This article will deeply analyze the ecological layout of Circle and USDC, the compliance logic behind them, capital arbitrage opportunities, and global regulatory trends, and fully demonstrate how stablecoins have set off a frenzy of digital asset capital.

The background and value of the rise of stablecoins

Stablecoins, as a digital asset anchored to the value of traditional fiat currencies, have risen rapidly in recent years and become an important part of the cryptocurrency market. Unlike mainstream digital currencies such as Bitcoin and Ethereum, which are volatile, stablecoins achieve price stability by anchoring fiat currencies such as the US dollar at a 1:1 ratio, greatly reducing the risk of digital asset transactions. With the help of blockchain technology, stablecoins not only accelerate the efficiency of cross-border transfers and payments, but also provide strong infrastructure support for multiple scenarios such as DeFi, digital asset exchange, and global merchant collection.

The core advantages of stablecoins are reflected in three aspects:

1. Stable prices, avoiding volatility risks

   The price of cryptocurrency market fluctuates violently. Stablecoins are anchored to the value of fiat currencies, which ensures the stability of transaction and settlement amounts and significantly reduces transaction risks.

2. Cross-border transfers are fast and cost-effective

   Stablecoins are based on blockchain technology and can be transferred to funds around the world within minutes, which is much lower than the time and fees for cross-border remittances from traditional banks.

3. Support diversified financial applications

   Stablecoins are directly connected to innovative scenarios such as DeFi lending, asset exchange, and digital goods payment, greatly expanding the boundaries of digital assets.

These are difficult to achieve with traditional fiat currencies, and have greatly improved the convenience and efficiency of digital asset transactions.

Circle Stablecoin Ecosystem Layout

Circle was founded in 2013, focusing on digital payments and blockchain finance. It launched the USDC stablecoin with Coinbase. USDC is a centralized stablecoin pegged to the US dollar at a 1:1 ratio. All funds are reserved in US regulated banks and short-term Treasury bonds. It is audited monthly by a third-party accounting firm to ensure the transparency and security of reserve assets.

As of June 2025, USDC has a market value of approximately $39 billion, ranking second in the world's stablecoins, second only to USDT. Its ecosystem covers a wide range and has been deployed on multiple public chains such as Ethereum, Solana, Arbitrum, Optimism, Avalanche, Base, Polygon, etc., supporting exchanges, DeFi protocols, high-speed payments and cross-chain asset transfers.

Circle uses the Cross-Chain Transfer Protocol (CCTP) to enable the free flow of USDC between different chains without slippage, implementing the global strategy of "USDC Everywhere".

In terms of compliance, Circle strictly follows the regulatory requirements of the U.S. Treasury, SEC and FinCEN, becoming the "regular stablecoin army" in the eyes of the Biden administration. USDC's transparent and open audit reports and compliance reserve system make it an important cornerstone of the digital dollar ecosystem. At the same time, Circle cooperates with global payment giants such as SWIFT, Visa, Mastercard, and Stripe to actively promote the implementation of USDC in the global payment and settlement fields.

Overview of major USD stablecoin projects

The underlying logic of stablecoins

In recent years, the stablecoin market has seen explosive growth, and the driving force behind this can be attributed to three core factors: regulatory vacuum, interest rate differentials, and national competition. These factors work together to make stablecoins not only an important asset class in the digital currency market, but also a new frontier for fierce competition among global financial capital.

1. Regulatory vacuum - from wild growth to gradual standardization

In the past, there were almost no clear global unified regulatory standards for the issuance and circulation of stablecoins, resulting in a "regulatory vacuum" in the market. This lack of regulation, on the one hand, lowered the threshold for issuance and attracted a large amount of capital and projects to enter quickly; on the other hand, it also brought potential systemic risks. As countries began to introduce laws and regulations on stablecoins, such as the Stablecoin Ordinance that will be officially implemented in Hong Kong in August 2025, it brought institutional norms and guarantees to the market. This institutional change will not only inject confidence into the development of the industry, but will also promote the market to gradually move towards compliance and maturity.

2. Interest rate differentials - a "profit gold mine" in the eyes of investors

Stablecoin issuers manage the fiat currency funds exchanged by users, invest in low-risk short-term government bonds, pledge Ethereum (ETH), or use futures short strategies to achieve returns far higher than bank deposit rates. Take Ethena's USDe as an example. Through ETH pledge and futures short-selling strategies, it has achieved an annualized rate of return (APY) of more than 20%, which is very attractive in the market. Once super-high returns are obtained, funds will quickly flow in, forming a capital aggregation effect, which will drive the rapid expansion of the scale of stablecoins.

3. National Game - New Battleground of Currency Hegemony and Digital Economy

Stablecoins are not only a tool for financial innovation, but also a focus of international currency competition and digital sovereignty. USD1, supported by the Trump team, is trying to create a "digital dollar reconstruction plan" to challenge the existing digital hegemony of the US dollar; at the same time, Hong Kong is actively building a Hong Kong dollar stablecoin ecosystem to compete for the high ground of Asian financial technology. Many countries in Europe, the United States and Asia are trying to maintain their currency influence in the digital age through regulations and central bank digital currency (CBDC) pilots. Stablecoins have become a new arena for countries to compete over digital currency sovereignty and the global payment system.

4. The usage scenarios are constantly enriched, gradually approaching the functions of legal currency

Stablecoins were initially used for internal transfers in the cryptocurrency circle, such as USDT, which is widely circulated in the crypto market. However, with the development of technology and application ecology, the functions of stablecoins continue to expand:

• Global transaction payment: supports cross-border e-commerce and overseas remittances, and provides fast and low-cost settlement methods.

• DeFi lending and income: Becoming the main lending asset on the DeFi platform, users can lend stablecoins to earn interest or use them as asset collateral.

• Asset hedging tool: When the crypto market fluctuates violently, investors can quickly convert to stablecoins to lock in asset value.

• Payment for digital goods: Stablecoins are widely used as a means of payment in fields such as games, NFTs, and content creation.

As these diverse scenarios continue to mature, the use of stablecoins has gradually evolved from "currency circle tools" to "digital legal currency", and the market size and capital attention have therefore ushered in a blowout.

The Bretton Woods 3.0 metaphor is playing out

From state-led and commercial bank pilots to participation by technology giants and chain-native projects, stablecoins are transforming from niche tools in the cryptocurrency circle to a key entry point for the next generation of global payment infrastructure.

Many people do not realize that this wave of stablecoins is actually a struggle among countries over "monetary hegemony in the digital age."

As the United States continues to expand the influence of the US dollar through stablecoins, Hong Kong is also actively building a stablecoin ecosystem and promoting the construction of the Asian Web3 clearing center.

On May 21, 2025, the Hong Kong Legislative Council formally passed the Stablecoin Bill and completed the third reading procedure on the same day. The bill will be officially implemented on August 1, 2025, becoming the world's first jurisdiction to establish a comprehensive regulatory framework for fiat-pegged stablecoins.

Hong Kong’s introduction of the Stablecoin Ordinance is not a passive regulation, but a proactive attempt to seize the strategic high ground of the “next generation payment clearing center”:

• The prototype of the global encrypted payment system has been established, and stablecoins have gradually expanded from "cryptocurrency settlement tools" to the mainstream choice for cross-border remittances, payments, and asset hedging;

• The United States, China, Europe and Japan are all accelerating the digitization of their currencies. Currency competition is shifting to the level of digital sovereignty. Hong Kong must establish a compliance moat to ensure the internationalization of the Hong Kong dollar.

• The integration of Web3 and finance is accelerating, and stablecoins just happen to become the "bridge" and "medium" between on-chain applications and real-world assets, and Hong Kong wants to be the bridge city.

Therefore, Hong Kong is not just "plugging loopholes", but finding a new position to proactively define rules between the cryptocurrency industry and regulation. Hong Kong's long-term intentions are very clear:

• The digital Hong Kong dollar is led by the HKMA, mainly through settlement within the CBDC system and pilot projects by financial institutions;

• The Hong Kong dollar stablecoin is driven by the market and serves as a supplement or even a substitute in open chain applications, overseas payments, and cross-border settlements.

This dual-track approach will enable Hong Kong to have two types of "issuance rights" in digital finance: one is official credit, and the other is commercial efficiency.

In this global currency game in the "Bretton Woods 3.0" era, stablecoins have quietly become the technical carrier and influence symbol of the next sovereign tool. The United States uses USDC and USDT as anchors to compete for the clearing rights in the digital age; Europe and Japan use MiCA and other regulations to promote independent strategies for the digitalization of their currencies; and Hong Kong, with its flexible and forward-looking regulatory framework and highly open market mechanism, has taken an independent path of "market-driven, institutional escort".

In the future, when stablecoins become the infrastructure for cross-border payments and blockchain redefines the clearing network and asset expression, whoever can master the pricing, access and clearing rights of this system will have the upper hand in the new round of international financial order. And Hong Kong has taken the lead in showing its cards.

Stablecoins are not just a revolution in the form of currency, but also a deep game of digital sovereignty, financial order and geopolitical discourse power. Next, more cities and more countries will join this unnamed digital financial war. However, at this moment, Hong Kong, standing at the table, is no longer a bystander.