The stablecoin market is booming, ushering in a new era of payment.

Recently, despite a decline in the total market value of cryptocurrencies, stablecoins have risen against the trend, reaching an all-time high in total market value. According to data platforms, the current total market value of stablecoins has reached $230.45 billion, a 56% increase compared to the same period last year. Among them, USDT dominates with a market value of nearly $144 billion, accounting for 62.6%; USDC follows closely with a market value of $59 billion.

In the midst of turmoil in the global financial markets, the rise of stablecoins is seen as a consolidation of the dollar's hegemony. Governments of various countries are actively promoting stablecoin regulations to facilitate the standardized development of the cryptocurrency market. At the same time, many financial institutions and technology companies are also laying out their stablecoin businesses, intending to occupy a favorable position in the future cross-border payment market.

Classification of Stablecoins

Stablecoins can be divided into four categories based on the type of collateral: fiat-collateralized, crypto-asset collateralized, algorithmic stablecoins, and emerging stablecoins.

fiat-backed stablecoin

This type of stablecoin is backed by fiat currency reserves and is typically issued at a 1:1 ratio. Representative projects include USDT, USDC, and FDUSD.

cryptocurrency collateral stablecoin

Using other cryptocurrency assets as collateral typically requires over-collateralization to maintain stability. Representative projects include USDS, GHO, crvUSD, and sUSD.

algorithm stablecoin

Algorithmically maintained price stability with little or no collateral required. However, due to the lack of sufficient collateral, such stablecoins face higher risks. The collapse of the Terra (LUNA) project is a typical case.

emerging stablecoin

A new type of stablecoin that combines fiat collateral, cryptocurrency collateral, and algorithmic adjustments. Currently, projects that are gaining significant market attention include USDe and USD0.

Stablecoin and New Payments

Stablecoins are gradually becoming important disruptors in the payment sector. In 2024, the payment settlement volume of stablecoins is expected to reach approximately $5.6 trillion, which is 20 times that of 2020. There are 20 million active addresses trading each month, with over 120 million addresses holding a non-zero stablecoin balance.

Stablecoins provide a new pathway for global payments, simplifying the payment settlement process and enabling fast, low-cost, and easily accessible transactions. In emerging markets, stablecoins have become an important tool for cross-border remittances and trade payments, helping individuals and businesses reduce costs and improve efficiency.

Major blockchain platforms are also actively developing stablecoin payment services. In terms of trading volume, Ethereum, Tron, and Binance Chain rank in the top three, while emerging public chains such as Solana, Base, and Pharos also consider payment as a core strategic direction.

Outlook

As stablecoins play an increasingly important role in the global financial system, the stance of regulators will become a key factor in their development. Central banks and financial regulatory agencies in various countries are closely monitoring stablecoins and gradually formulating corresponding regulatory frameworks.

In the future, stablecoins are expected to become strong competitors in the traditional payment market. In this round of stablecoin bull market, we will witness how stablecoins reshape the global payment landscape, bringing new possibilities to the digital financial ecosystem.