Abstract
Stablecoins, as an important component of the cryptocurrency market, are reconstructing the global payment industry. With their price stability, decentralized characteristics, low-cost cross-border payment capabilities, and smart contract automated execution, they are gradually becoming a bridge between traditional financial systems and the blockchain world. This report will conduct an in-depth exploration of stablecoins from aspects such as their current development status, technical architecture, compliance challenges, impact on payment systems, and future trends, analyzing how they drive payment industry transformation and assessing strategies of major market participants.
Chapter One: Stablecoin Overview
Stablecoins are a type of digital currency pegged to specific assets (such as fiat currency, commodities, or other crypto assets), with the core goal of providing a relatively stable store of value and trading medium in the high-volatility environment of the cryptocurrency market. Compared to mainstream crypto assets like BTC or ETH, stablecoins have significantly reduced price volatility, giving them unique advantages in global payments, cross-border transactions, DeFi, and other fields.
[The rest of the translation follows the same professional and accurate approach, maintaining the specific terminology as instructed]Currently, over 1.5 billion people worldwide lack bank accounts or basic financial services (the "unbanked" population), primarily distributed in developing countries and remote regions. These groups struggle to access international payment systems and conduct e-commerce transactions, wage payments, or cross-border remittances due to factors like lack of credit history, geographical restrictions, and government policies. International payments involve currency exchange, and exchange rate instability can increase transaction costs, especially in countries with high inflation. For example, in countries like Argentina and Venezuela, where local currencies rapidly devalue, businesses and individuals often incur additional foreign exchange conversion fees and economic losses from exchange rate fluctuations.
Traditional payment systems are strictly controlled by national regulations, especially regarding anti-money laundering (AML) and know-your-customer (KYC) policies. For some economically sanctioned countries or regions, international payment channels may be completely blocked, making it difficult for businesses and individuals to conduct legal transactions. For instance, companies in Iran and North Korea cannot use the SWIFT network, and some countries impose strict regulations on cryptocurrency transactions, all of which restrict the free flow of global funds.
2.2 Payment Advantages of Stablecoins
Stablecoin payments do not rely on traditional banking systems but are based on blockchain peer-to-peer networks, bypassing expensive intermediaries to achieve lower-cost transactions. For example, using USDT (TRC-20 version based on the TRON chain) for cross-border transfers can cost as little as $0.1, compared to traditional bank wire transfer fees of $30-50, which also take several days to process. Stablecoin payment confirmation times are typically between a few seconds to minutes, greatly enhancing fund liquidity.
Another core advantage of stablecoins is financial inclusivity. Anyone with an internet connection and a digital wallet can create a cryptocurrency account and begin global payments. This model significantly lowers financial access barriers, enabling the global unbanked population to access payment and deposit services, especially in Africa, Southeast Asia, and Latin America, where stablecoins have become an important tool to combat local currency inflation.
Compared to cryptocurrencies like Bitcoin and ETH, stablecoins have minimal price volatility because their value is typically pegged 1:1 with the US dollar or other fiat currencies. For example, stablecoins like USDC and USDT usually fluctuate no more than ±0.5%, far lower than high-volatility assets like Bitcoin. This makes stablecoins a reliable payment medium that merchants and consumers can confidently accept without worrying about sudden value drops.
Stablecoins based on blockchain smart contracts enable automated payments and programmable fund management. For instance, companies can use stablecoins for smart contract salary payments, automatically distributing wages to employees monthly; cross-border trading companies can set conditions to trigger payments upon goods delivery. The programmable payment feature gives stablecoins enormous potential in supply chain finance and smart settlement.
[The translation continues in the same manner for the rest of the text.]Here is the English translation: Secondly, the transparency of stablecoins has always been a focus of regulatory attention, especially for fiat-collateralized stablecoins. Since the value of these stablecoins is supported by custodied fiat currency reserves, stablecoin issuers must conduct regular financial audits, disclose specific reserve details, and ensure that each stablecoin is backed by an equivalent amount of fiat currency. Otherwise, market trust in stablecoins will be questioned, potentially leading to market instability. To address this issue, some stablecoin issuers have taken proactive measures, such as USDC collaborating with Circle to regularly publish reserve proofs, enhancing transparency. Furthermore, stablecoins face enormous challenges in international regulation. Due to different regulatory requirements across countries, the cross-border flow and application of stablecoins may be constrained by various legal frameworks. For example, China has comprehensively banned private cryptocurrency issuance while promoting central bank digital currency (CBDC) as an alternative to legal stablecoins. The United States is actively advancing stablecoin regulatory frameworks and promoting the Stablecoin Transparency Act. Europe requires stablecoin reserve disclosure and EU-level regulation through the Markets in Crypto-Assets (MiCA) regulation. The differences in attitudes towards stablecoins across countries and regions also pose significant challenges to their global application. In terms of compliance, stablecoin issuers also face challenges in adapting to regulatory frameworks. Global policy differences mean stablecoin issuers must maintain operational flexibility and market competitiveness while meeting local legal requirements. To address these challenges, stablecoin issuers typically choose to collaborate with traditional financial institutions, leveraging their existing compliance experience and infrastructure to reduce compliance risks. In the future, the technological and compliance pathways of stablecoins may undergo profound changes. With continuous technological advancements, the development of DeFi and privacy protection technologies, stablecoin applications will become more widespread, with enhanced security and efficiency. Simultaneously, global coordination and cooperation in compliance will be crucial for stablecoins' continued development. To achieve widespread global application, stablecoins will need not only technological innovation but also global regulatory coordination to ensure compliance across different legal frameworks. [The rest of the translation follows the same professional and accurate approach, maintaining the technical terminology and nuanced language of the original text.]Finally, with the continuous development of stablecoin technology and application scenarios, new market opportunities will emerge. For example, stablecoins may play a role in new asset classes such as real estate, art, and even carbon credits. As blockchain technology becomes more widespread, stablecoins will become a payment and trading medium for these emerging assets, further promoting the development of the global digital economy.
Chapter Five: Conclusion
In summary, the future development trend of stablecoins is characterized by diversification. They will not only continue to drive innovation in payment systems and financial services but also bring profound changes in decentralized applications, digital asset management, cross-border payments, privacy protection, and global regulation. As technology, market demand, and policies continue to evolve, stablecoins will play an increasingly important role in the global economic and financial system. Stablecoins are rapidly disrupting the traditional payment industry, providing global users with more efficient, low-cost, and borderless payment methods. However, factors such as regulation, privacy protection, and technological innovation will still determine their future development direction. As more financial institutions and technology companies enter this field, stablecoins are expected to become an important part of the global payment network and further promote the digitization and decentralization of the financial system.
