Hong Kong’s Stablecoin Ordinance will officially take effect on August 1, and giants like Ant Group and JD.com are already moving in. The return of Liu Qiangdong has reignited buzz in the internet sector. Beyond the fierce food delivery wars, he has also pushed stablecoins into the spotlight. At a June 17 talk, Liu said he hopes to apply for stablecoin licenses in all major currency nations to enable cross-border settlement between global enterprises.But what exactly are stablecoins? Why are tech giants piling in? And how might this affect us?
1. What Exactly Is a Stablecoin?
Before 2017, China’s crypto market allowed anyone to buy digital assets like Bitcoin directly on exchanges with fiat money. This fueled a flood of “altcoins,” leading to scams and major losses. On September 4, 2017, seven ministries jointly banned ICOs as illegal fundraising, cut off fiat recharge channels, and shut down direct purchase routes.
With fiat on-ramps closed, over-the-counter (OTC) trading emerged, where exchanges matched private buyers and sellers without handling funds directly. While somewhat safer, it was inefficient and prone to disputes amid volatile prices.
(Source: Huatai Securities)
To solve this, exchanges promoted stablecoins backed by fiat reserves (e.g., USD stablecoins). Unlike other volatile cryptos, these tokens were issued with the promise that holders could redeem them 1:1 for fiat currency.
This made trading far more efficient, and stablecoins—with minimal volatility—quickly became the bridge between traditional finance and crypto.
By 2024, global stablecoin market cap rebounded close to $200 billion. As of June 16, 2025, it surpassed $240 billion—up more than 170x since 2017—representing about 7% of total global crypto market value.
(Source: Huatai Securities)
2. The Stablecoin Industry Chain
Stablecoins now span the full cycle—from issuance to circulation to diverse applications.
1. Issuance: Today’s market is dominated by two players—USDT and USDC. As of June 13, 2025, the total supply was $218.15 billion: USDT at $151.59 billion (69.39%) and USDC at $60.61 billion (27.75%), together commanding 97.14% of the market—cementing the dominance of USD-pegged stablecoins.
(Source: TF Securities)
2. Circulation: Stablecoins flow mainly via crypto exchanges and public blockchains. Exchanges earn fees from trading pairs, swaps, and fiat on/off ramps. By June 2025, Hong Kong’s SFC had issued 11 virtual asset trading licenses, with platforms like OSL becoming key compliant circulation hubs.
3. Applications: Stablecoins now extend far beyond trading:
Cross-border payments: In Mexico, 10% of remittances are in stablecoins; in Nigeria, annual crypto inflows exceed $59 billion, with 43% involving stablecoins.
On-chain finance: Used in payroll (Remote.com covers 69 countries), U.S. Treasury collateral settlement (e.g., BlackRock’s digital funds), and tokenized real-world assets (RWA).
Inflation hedging: In high-inflation countries like Argentina, stablecoins serve as a safe-haven savings tool, partly replacing local currencies.
(Source: Huatai Securities)
3. Current Landscape: Multi-Party Competition and System Reshaping
Stablecoins are reshaping financial institutions, tech companies, users, and even the global monetary system.
Financial institutions: Stablecoins bridge fiat and crypto, offering regulated entry points into digital assets. But issues like collateral transparency and liquidity management also raise risks of regulatory arbitrage and systemic vulnerabilities.
Tech companies: They expand into payments and cross-border finance, using stablecoins to build decentralized financial ecosystems that challenge traditional infrastructure.
JD.com: Its stablecoin is not yet issued, but Phase I plans include HKD- and USD-pegged coins, now in sandbox Phase II testing. Target users: retail and institutional clients. Use cases: cross-border payments, trading, and retail settlement.
(Source: Guosheng Securities)
Ant Group: Active in blockchain since 2017 with its AntChain, applied in supply chain finance and cross-border remittance. Ant International now seeks stablecoin licenses in Hong Kong, Singapore, and Luxembourg to scale its blockchain payment network.
(Source: Guosheng Securities)
Personal users: They benefit from low-volatility trading and instant global transfers, but face risks of issuer misuse of reserves or de-pegging of algorithmic stablecoins. In emerging markets, stablecoins are often used to bypass local currency depreciation.
Global monetary system: USD stablecoins reinforce U.S. dominance in cross-border payments, extending the dollar’s reach. This has spurred nations to accelerate central bank digital currency (CBDC) development to safeguard monetary sovereignty and push the system toward a multipolar digital order.
(Source: Huatai Securities)
4. Future Outlook and Impact
- Compliance & consolidation: With legislation advancing worldwide, stablecoins are entering a strict regulatory era. Licensed financial institutions and leading tech firms will dominate issuance, while smaller noncompliant projects will be phased out. Security and stability will improve, market concentration will rise, and those securing early licenses and credibility could become global leaders.
(Source: TF Securities)
- Payment networks & financial infrastructure: Widespread stablecoin use will push legacy payment networks to integrate with blockchain rails. Central banks may need to develop open APIs for banks and issuers to connect with settlement systems—driving infrastructure toward software-defined and intelligent upgrades.
- Transformation of financial intermediaries: With direct on-chain value transfers growing, banks’ traditional revenue from FX and clearing may shrink.
In response, they may pivot to offering custody, reserve management, and compliance services.
Their role will evolve from “payment channels” to “risk managers” and “trusted third-party providers.”
(Source: Guosheng Securities)
Stablecoins, as the critical bridge between crypto and traditional finance, are entering a new regulated growth cycle. Tech giants’ rapid entry signals a coming wave of disruption in digital payments. But for all participants, the lesson is clear: opportunity and risk go hand in hand—only through rational adoption and compliance can stablecoins steadily move forward.
