The month of June witnessed a remarkable surge in interest surrounding stablecoins, transitioning them from a niche topic to a mainstream financial discussion. This rapid rise to prominence was catalyzed by significant regulatory developments and high-profile institutional endorsements across the globe.
Understanding the Sudden Rise of Stablecoins
To comprehend why stablecoins have suddenly captured widespread attention, it is essential to first define what they are. Stablecoins are a type of cryptocurrency whose value is pegged to a specific asset, most commonly a fiat currency like the US dollar. They are characterized by their price stability, utilization of blockchain technology, high payment efficiency, low transaction costs, and issuance by private entities.
Currently, USDT and USDC dominate the market, collectively accounting for over 90% of all stablecoin circulation, with both being pegged to the US dollar. This means stablecoins are, at their core, a form of cryptocurrency.
A pivotal moment occurred in June when the Governor of the People's Bank of China, Pan Gongsheng, publicly addressed stablecoins at the Lujiazui Forum. He suggested that a diversified global monetary landscape should be constructed and noted the potential for both the digital yuan and stablecoins to serve as new solutions for cross-border settlement. This marked a significant shift from September 2021, when Chinese regulators had halted all domestic cryptocurrency transactions due to concerns over financial stability risks.
This change in tone was echoed internationally. At the Summer Davos Forum 2025, Li Bo, Deputy Managing Director of the International Monetary Fund (IMF), stated that the IMF is collaborating with multiple agencies to develop standards and guidance for stablecoins to assist countries in their implementation.
Concurrently, the market reacted strongly. For instance, Guotai Junan International’s stock price soared nearly 200% on June 25th after it was approved to provide virtual asset trading services in Hong Kong. Throughout the month, dozens of securities firms published research reports on stablecoins, and over 50 related roadshows and conference calls were recorded on the Wind financial platform.
Major corporations are also making significant moves. JD.com’s founder, Richard Liu, mentioned plans for the company to apply for stablecoin licenses in major currency countries. Ant Group’s Ant Digital Technologies has established an overseas headquarters in Hong Kong, completed trials in the local regulatory sandbox, and initiated its license application process, with plans to develop stablecoin businesses in Hong Kong, Singapore, and Luxembourg.
Reducing Excessive Reliance on the US Dollar
A crucial driver behind this global push is the desire to reduce the world's overwhelming dependence on the US dollar within the international monetary system. The recent legitimization of dollar-based stablecoins in the US has accelerated this conversation.
In May, the US Senate passed the Guided Establishment of National Integrity and Uniformity for Stablecoins (GENIUS) Act. This legislation mandates that stablecoin issuers must hold 100% reserves in US dollars and short-term Treasury bonds, subjects them to tiered regulatory oversight (with the Federal Reserve overseeing issuers with more than $100 billion in circulation), restricts the准入 of foreign stablecoins, and enforces strict anti-money laundering protocols.
This act effectively grants a legal identity to dollar-pegged stablecoins as "on-chain dollars," potentially integrating them into global payment infrastructures and creating a new pathway for the expansion of US dollar dominance.
In response, other economies are exploring stablecoins as a means to foster a more diversified digital international monetary reserve system. This sentiment was reinforced by European Central Bank President Christine Lagarde, who during a visit to China in June, called for reforms to the international monetary reserve system.
The positive signals from regulators, particularly in China, regarding the exploration of stablecoins can thus be seen as a milestone event in the broader context of currency internationalization, notably for the Chinese yuan.
Hong Kong has emerged as a primary testing ground for these new payment alternatives. In May, the Hong Kong government gazetted a draft Stablecoin Ordinance, which was followed by an announcement on June 6th confirming the ordinance would take effect on August 1st. This legislation classifies all stablecoins claiming to be pegged to the value of the Hong Kong dollar as "payment instruments," subjecting them to a licensing regime with requirements similar to the US GENIUS Act, including 100% high-quality reserve backing and robust operational controls.
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How Are Stablecoins Actually Used?
With a foundational regulatory framework taking shape, the focus shifts to the practical applications and advantages of stablecoins over traditional fiat currencies.
The most discussed use cases center on cross-border payment restructuring and Real World Asset (RWA) tokenization.
Revolutionizing Cross-Border Payments
In traditional retail payment systems, transactions involving Visa or Mastercard must pass through at least four main parties: the merchant, the merchant's acquiring bank, the card network, and the consumer's issuing bank. This process results in high transaction costs—often 2%-3% of the transaction value in fees, which are ultimately passed on to consumers—and slow settlement times of 1-3 business days, which severely impacts business cash flow.
Stablecoin payments, powered by blockchain technology, simplify this drastically. Funds move directly from the consumer's digital wallet to the merchant's digital wallet on a blockchain network, bypassing all intermediaries. This eliminates transaction fees and allows for near-instant settlement, 24/7,不受复杂流程与工作时间制约.
Furthermore, stablecoins can challenge the core global network advantage of traditional card organizations by operating on open, public blockchains that are inherently borderless, potentially creating a unified global payment network.
Tokenizing Real-World Assets (RWA)
RWA tokenization involves converting tangible or intangible real-world assets—like real estate, commodities, or financial instruments—into tradable digital tokens on a blockchain. This process enhances liquidity by allowing global investors to buy and sell fractions of these assets easily.
This is not merely theoretical. In August 2024, Ant Digital Technologies, in collaboration with listed company Langold, successfully completed China's first cross-border financing of new energy assets via RWA. In December, they completed the first RWA involving photovoltaic实体资产 with green energy service provider GCL, involving over RMB 200 million.
Stablecoins are poised to become the primary "currency" for RWA transactions. Once an asset is tokenized, compliant stablecoins can serve as the pricing and settlement tool, enabling peer-to-peer transactions that simplify the cumbersome processes traditionally reliant on centralized institutions like SWIFT and correspondent banks, thereby reducing costs.
For individual investors, the development of stablecoins offers a new avenue for asset allocation—a low-volatility, cash-like instrument for portfolios. The recent approval of 40 institutions in Hong Kong to upgrade their licenses and provide virtual asset trading services, including Guotai Junan International as the first Chinese-funded securities firm to obtain a full virtual asset license, signifies growing access for retail participation.
Key Players and Future Landscape
As Hong Kong's Stablecoin Ordinance nears its effective date, making it the first jurisdiction to establish a licensing regime for fiat-referenced stablecoins, the market is watching to see which entities will lead the charge. The Hong Kong Monetary Authority (HKMA) is expected to announce the first list of licensed stablecoin issuers between July and August.
Current active participants include:
- Ant Digital Technologies has applied for a stablecoin license in Hong Kong.
- JD.com's Bilian Technology CEO has stated plans to formally obtain a Hong Kong stablecoin issuance license by early Q4 2025.
- Lianlian DigiTech is collaborating with Yuanwei Technology on a stablecoin project.
- Linklogis is working on a stablecoin project in cooperation with Standard Chartered.
Furthermore, ZA Bank has become Hong Kong's first digital bank to provide services to a stablecoin issuer, and China Everbright Limited has invested in Circle, the "first stablecoin stock," which listed on June 5th.
At a recent stablecoin seminar, Gan Tian, CEO of China Asset Management (Hong Kong), noted that the most active banks in Hong Kong's tokenized payment field currently include Ant International, Standard Chartered, HSBC, Deutsche Bank, and ANZ, with Chinese-funded banks yet to participate actively. He described Standard Chartered as "the most invested commercial bank in Web3.0 globally."
Looking ahead, Gan Tian predicted that the global monetary system might converge towards a few mainstream stablecoins. However, this process will depend on robust financial markets and trade scenarios. He believes Hong Kong's practice will not only provide a new path for the internationalization of the yuan but may also reshape the underlying logic of international financial infrastructure.
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Frequently Asked Questions
What exactly is a stablecoin?
A stablecoin is a digital currency built on blockchain technology that is pegged to the value of a stable reserve asset, like the US dollar or gold. This peg is designed to minimize price volatility, making it more suitable for everyday transactions and as a store of value compared to more speculative cryptocurrencies like Bitcoin.
Why are governments and regulators suddenly interested in stablecoins?
Regulators are engaging with stablecoins due to their rapid growth and potential impact on the global financial system. Their ability to facilitate fast, cheap cross-border payments and their role in the emerging tokenized asset (RWA) ecosystem make them significant. Governments are acting to ensure consumer protection, financial stability, and compliance with anti-money laundering standards through new regulations.
How do stablecoins improve cross-border payments?
They bypass the traditional correspondent banking network by using blockchain for direct peer-to-peer transfers. This eliminates multiple intermediaries, drastically reducing transaction fees from a percentage of the total to a minimal network fee and speeding up settlement from days to seconds, regardless of weekends or time zones.
What does RWA tokenization mean for the average investor?
It opens up access to investment opportunities that were previously illiquid or required high capital entry points. Investors can potentially buy fractional shares of real-world assets like real estate, art, or infrastructure projects through tokenized securities, using stablecoins for efficient purchase and settlement.
Are stablecoins safe?
Risk depends on the type of stablecoin and its issuer. Regulated stablecoins that are fully backed by cash and cash-equivalent reserves and subject to regular audits (as required by new laws like Hong Kong's ordinance) aim to be very safe. However, unregulated or algorithmic stablecoins that aren't fully backed have historically carried higher risks of de-pegging and losing value.
What is Hong Kong's role in the stablecoin ecosystem?
Hong Kong is positioning itself as a global leader in digital asset regulation by establishing the world's first comprehensive licensing framework for fiat-referenced stablecoins. This clear regulatory environment aims to attract major players to innovate and operate within a supervised sandbox, making it a key hub for stablecoin development in Asia.