Stablecoins have surged from obscurity to global attention in just a matter of weeks. Once considered a niche segment within the broader cryptocurrency ecosystem, they are now at the center of financial innovation, regulatory discussions, and strategic corporate planning. From major financial institutions to tech giants, the race to adopt and issue stablecoins is accelerating—especially in key markets like Hong Kong and beyond.
But what caused this sudden spike in interest? And why does it matter for the future of global finance?
The Regulatory Spark That Lit the Fire
The turning point came in June 2025, when a series of high-profile developments signaled a major shift in how regulators view stablecoins.
On June 18, during the Lujiazui Forum, PBOC Governor Pan Gongsheng publicly addressed stablecoins for the first time with clear openness. He emphasized the need for a diversified global monetary system and suggested that both digital yuan and regulated stablecoins could serve as viable alternatives for cross-border settlements.
This wasn’t just a passing comment—it was a policy signal. For years, China had maintained strict restrictions on crypto-related activities following the 2021 ban on domestic cryptocurrency trading. Now, the tone has clearly shifted toward exploration and controlled innovation.
Around the same time, on June 25, IMF Deputy Managing Director Bo Li announced at the 2025 Summer Davos Forum that the IMF is collaborating with global institutions to develop international standards and guidelines for stablecoin implementation. This move underscores growing recognition of stablecoins as a legitimate component of future financial infrastructure.
Meanwhile, regulatory progress in Hong Kong added fuel to the fire. On May 30, the Hong Kong government published its draft Stablecoin Ordinance, which officially takes effect on August 1, 2025. Under the new rules:
- Any digital token claiming to be pegged to the Hong Kong dollar will be classified as a payment instrument.
- Issuers must hold 100% high-quality reserves (cash or short-term government bonds).
- Interest payments on stablecoins are prohibited.
- Strict AML/CFT (anti-money laundering and counter-terrorism financing) requirements apply.
Hong Kong is now the first jurisdiction globally to establish a formal licensing regime for fiat-backed stablecoins—making it a real-world testing ground for next-generation financial systems.
Why Reduce Dollar Dependence? The Geopolitical Angle
To understand why stablecoins are gaining traction now, it's essential to recognize their role in reshaping global monetary dynamics.
Today’s dominant stablecoins—USDT and USDC—are both pegged to the U.S. dollar and control over 90% of the market. They function as “on-chain dollars,” enabling fast, low-cost international transfers without traditional banking intermediaries.
However, their widespread use reinforces U.S. dollar dominance in global finance—a reality many countries want to counterbalance.
Morgan Stanley highlighted a key catalyst: the U.S. Senate’s passage of the GENIUS Act in May 2025. This legislation mandates full reserve backing, monthly transparency reports, and tiered regulation based on issuer size. It effectively grants legal legitimacy to dollar-backed stablecoins, potentially integrating them into core global payment networks.
While this strengthens America’s digital financial edge, it also motivates other economies to develop their own alternatives. A renminbi-pegged stablecoin, for example, could support RMB internationalization, reduce reliance on SWIFT, and offer new tools for trade settlement—especially with Belt and Road partners.
European Central Bank President Christine Lagarde echoed similar sentiments during her visit to China in June, calling for reform of the current international reserve system.
Thus, exploring stablecoin technology isn’t just about innovation—it’s a strategic move toward monetary sovereignty and diversification.
How Are Stablecoins Used? Key Applications Driving Adoption
So what makes stablecoins more than just digital versions of cash?
Two primary use cases are driving momentum: cross-border payments and real-world asset (RWA) tokenization.
Revolutionizing Cross-Border Payments
Traditional cross-border transactions suffer from high fees, slow settlement times (often 1–3 business days), and dependency on intermediaries like Visa, Mastercard, or SWIFT.
Each transaction passes through multiple parties—acquiring banks, card networks, issuing banks—each taking a cut. These costs are ultimately passed on to consumers and merchants.
Stablecoins change this by enabling peer-to-peer value transfer over blockchain networks. With no middlemen involved:
- Transaction fees drop dramatically
- Settlement occurs in seconds, regardless of geography
- Liquidity is freed up instantly
Moreover, because stablecoins operate on open, public blockchains, they can create a truly global payment network—one not controlled by any single corporation or country.
Unlocking Real-World Assets Through Tokenization
Another transformative application is RWA (real-world asset) tokenization, where physical or financial assets like real estate, commodities, or renewable energy projects are converted into digital tokens on a blockchain.
For instance:
- In August 2024, Ant Digital Technologies partnered with Langxin Group to complete China’s first cross-border RWA financing deal in new energy.
- In December 2024, they executed the first photovoltaic asset tokenization project worth over RMB 200 million.
In these cases, stablecoins act as the primary settlement currency, allowing seamless international investment and reducing reliance on legacy banking rails.
This opens up previously illiquid markets to global investors while improving transparency and efficiency.
👉 See how asset tokenization is redefining ownership and investment opportunities worldwide.
Who’s Leading the Stablecoin Race?
With Hong Kong set to issue its first official stablecoin licenses in July–August 2025, several major players are positioning themselves at the forefront.
Major Tech and Financial Players Entering the Space
- Ant Digital Technologies: Already operating in Hong Kong’s regulatory sandbox, Ant has launched its overseas headquarters and initiated license applications. It plans operations in Hong Kong, Singapore, and Luxembourg.
- JD ChainTech: Aiming to obtain a Hong Kong stablecoin issuance license by Q4 2025.
- LianLian Digital & Yuen BOC: Collaborating on a joint stablecoin initiative.
- Linklogis & Standard Chartered: Partnering on blockchain-based payment solutions.
- ZhongAn Bank: Became the first digital bank in Hong Kong to provide services to stablecoin issuers.
- China Everbright Holdings: Invested in Circle—the company behind USDC—after its June 5 IPO dubbed “the first stablecoin stock listing.”
Meanwhile, global banks leading in Web3 adoption include Standard Chartered, HSBC, Deutsche Bank, and ANZ, with active custody and issuance pilots across Dubai, Singapore, and Luxembourg.
Notably absent so far? Most mainland Chinese banks remain cautious, focusing instead on digital yuan development.
According to Kenny Kam of Huaxia Fund (Hong Kong), one of the few Chinese asset managers participating in all three HKMA sandbox programs:
“The global monetary system may eventually converge around a few dominant stablecoins—but only those backed by strong financial markets and real-world trade use cases.”
He believes Hong Kong’s experiments could not only advance RMB internationalization but also reshape the foundational logic of global financial infrastructure.
Frequently Asked Questions (FAQ)
What exactly is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to an underlying asset—most commonly fiat currencies like the U.S. dollar or Hong Kong dollar. Unlike volatile cryptocurrencies like Bitcoin, stablecoins aim to minimize price fluctuations.
Are stablecoins safe?
When issued under robust regulation—such as Hong Kong’s new ordinance requiring 1:1 reserve backing and monthly audits—stablecoins can be highly secure. However, risks remain if reserves aren’t transparent or if issuers lack oversight.
Can individuals use stablecoins?
Yes. With Hong Kong’s SFC recently approving 40 institutions—including 38 brokers—to offer virtual asset trading via integrated accounts, retail investors can soon access compliant stablecoin products through regulated platforms.
How do stablecoins differ from central bank digital currencies (CBDCs)?
CBDCs are government-issued digital currencies (e.g., digital yuan), while stablecoins are typically issued by private entities but regulated. Both aim to modernize payments, but stablecoins often offer greater interoperability across decentralized platforms.
Will renminbi-pegged stablecoins emerge?
Very likely. Given China’s push for RMB internationalization and Hong Kong’s role as a financial gateway, a regulated RMB-backed stablecoin could emerge within the next few years—potentially integrated with Belt and Road trade settlements.
Are U.S. dollar stablecoins under threat?
Not immediately. USDT and USDC still dominate due to deep liquidity and ecosystem integration. However, increased regulation outside the U.S. may encourage diversification into non-dollar options over time.
The rise of stablecoins in mid-2025 marks more than just technological progress—it reflects a broader shift toward decentralized finance, digital sovereignty, and reimagined global payment systems.
As regulatory clarity grows and institutional adoption accelerates, stablecoins are poised to become foundational tools in modern finance—bridging traditional markets with blockchain innovation.
👉 Stay ahead of the curve—explore how you can engage with the evolving world of digital assets today.