Why Stablecoins Suddenly Went Viral in 2025

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In June 2025, stablecoins transitioned from a niche crypto concept to a mainstream financial phenomenon. From regulatory announcements to stock surges and corporate expansions, the momentum behind stablecoins has been undeniable. Over 50 investor briefings and webinars were held on the topic across the month, signaling a seismic shift in market sentiment. But what caused this sudden surge of interest?

👉 Discover how stablecoins are reshaping global finance—click to explore the future of digital payments.

Regulatory Shifts Spark Market Excitement

The turning point came on June 18, during the Lujiazui Financial Forum, when People’s Bank of China (PBoC) Governor Pan Gongsheng publicly acknowledged stablecoins for the first time with a positive tone. He emphasized the need for a diversified global monetary system and suggested that digital yuan and regulated stablecoins could serve as innovative solutions for cross-border settlements.

This statement marked a pivotal policy shift. Just days later, on June 25, International Monetary Fund (IMF) Vice President Li Bo announced that the IMF is collaborating with global institutions to develop international standards and guidelines for stablecoin implementation—further legitimizing the asset class.

On the same day, Guotai Junan International’s stock soared nearly 200%, jumping from HK$1.42 to HK$3.70 per share after it was confirmed that the firm had received approval to offer virtual asset trading services in Hong Kong.

These developments triggered a wave of institutional interest. Dozens of brokerage firms issued research reports on stablecoins, while Windæ•°æźæ˜Ÿç€ș showed over 50 related roadshows and conference calls in June alone.

What Are Stablecoins?

At their core, stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to reserve assets—most commonly fiat currencies like the U.S. dollar. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins offer price stability, making them suitable for everyday transactions and financial applications.

Currently, USDT (Tether) and USDC (USD Coin) dominate the market, collectively holding over 90% of the stablecoin market share. Both are dollar-pegged and widely used across global blockchain networks as “on-chain dollars.”

While China banned domestic cryptocurrency trading in September 2021 due to financial stability concerns, the recent regulatory openness suggests a strategic pivot—particularly toward exploring RMB-backed stablecoins as tools for internationalization.

Reducing Reliance on the U.S. Dollar

One of the key drivers behind this renewed focus is the growing desire to reduce dependence on the U.S. dollar in global finance.

In May 2025, the U.S. Senate passed the GENIUS Act (Guiding Establishments for New Innovation in U.S. Stablecoins), which mandates:

This legislation grants legal recognition to dollar-backed stablecoins, positioning them as critical infrastructure for future digital payments—and potentially extending dollar dominance into the blockchain era.

In response, other economies are accelerating efforts to develop alternatives. The European Central Bank’s President Christine Lagarde recently called for reform of the international reserve system during her visit to China.

For China, developing a regulated RMB-denominated stablecoin could be a strategic milestone in advancing the digital yuan’s global reach and reducing reliance on SWIFT and traditional banking corridors.

Hong Kong is emerging as the primary testing ground. On May 30, 2025, the Hong Kong government published its Stablecoin Ordinance draft in the official gazette. The ordinance was finalized on June 6 and will take effect on August 1, 2025.

Under the new law:

These regulations mirror aspects of the U.S. GENIUS Act but are tailored to position Hong Kong as a global hub for compliant stablecoin innovation.

How Are Stablecoins Used?

With foundational regulation in place, the next question is: how do stablecoins create value?

Revolutionizing Cross-Border Payments

Traditional retail payment systems—dominated by Visa and Mastercard—involve multiple intermediaries: merchants, acquirers, card networks, and issuing banks. Each step adds cost and delay.

For example:

Stablecoins streamline this process using blockchain technology. Instead of routing through intermediaries, payments move directly from a user’s digital wallet to a merchant’s wallet—peer-to-peer, near-instantly, and with minimal fees.

Moreover, because stablecoins operate on open, public blockchains, they enable a truly global payment network, challenging the geographic and institutional limitations of traditional card schemes.

👉 See how blockchain-powered payments are cutting costs and speeding up settlements worldwide.

Tokenizing Real-World Assets (RWA)

Another transformative application is RWA (Real-World Asset) tokenization—the process of converting physical or financial assets into blockchain-based tokens that can be traded globally.

Examples include:

In August 2024, Ant Digital Technologies partnered with Chinese listed company Langxin to complete China’s first cross-border RWA financing in the new energy sector. In December 2024, they executed another landmark deal with GCL Energy, tokenizing over CNY 200 million worth of solar power assets.

Ant Digital argues that stablecoins are essential for RWA ecosystems, serving as compliant settlement instruments. Once assets are tokenized on-chain, transactions can occur directly between parties using regulated stablecoins—bypassing SWIFT, correspondent banks, and complex clearing processes.

Empowering Individual Investors

For everyday users, stablecoins offer a low-volatility, cash-like digital asset for saving and investing. With Hong Kong’s Securities and Futures Commission recently approving 40 institutions—including 38 brokers, one bank, and one internet company—to provide virtual asset trading services via integrated accounts—access is becoming mainstream.

Guotai Junan International became the first Chinese-funded broker to obtain a full virtual asset license in Hong Kong.

Who’s Leading the Stablecoin Race?

As Hong Kong prepares to launch its formal licensing regime—the world’s first regulated framework for fiat-backed stablecoins—the race is on among financial institutions and tech firms.

Key players include:

ZB Bank has become Hong Kong’s first digital bank to support stablecoin issuers. Meanwhile, China Everbright Holdings invested in Circle—the company behind USDC—shortly after its June 5 IPO dubbed “the first stablecoin stock listing.”

According to Kenneth Kam ofćŽć€ćŸș金Hong Kong, his firm is the only mainland-affiliated asset manager participating in all three of HKMA’s major sandbox programs. In the stablecoin sandbox cohort, participants include Wyre Innovation Tech, JD ChainTech, and Standard Chartered Bank.

Kam notes that global banks leading in tokenized payments include:

Notably, most Chinese banks have yet to join actively.

He predicts that global currency systems may eventually converge around a few dominant stablecoins, but success will depend on deep financial markets and real-world trade integration. Hong Kong’s experiment, he believes, could not only advance RMB internationalization but also reshape the foundational logic of global financial infrastructure.

👉 Stay ahead of the curve—learn how early adopters are leveraging stablecoins today.

Frequently Asked Questions (FAQ)

Q: What exactly is a stablecoin?
A: A stablecoin is a type of cryptocurrency designed to maintain a stable value by being backed by reserves such as fiat money (e.g., USD or HKD), commodities (like gold), or algorithms. Most popular ones like USDT and USDC are pegged 1:1 to the U.S. dollar.

Q: Are stablecoins legal in China?
A: While mainland China prohibits cryptocurrency trading and mining, Hong Kong operates under a separate regulatory framework. As of August 1, 2025, Hong Kong will regulate HKD-pegged stablecoins under its new Stablecoin Ordinance, allowing licensed entities to issue and manage them legally.

Q: How do stablecoins reduce cross-border payment costs?
A: By using blockchain networks, stablecoins eliminate intermediaries like correspondent banks and card networks. This reduces transaction fees (often from 2–3% to less than 0.5%) and enables near-instant settlement—cutting delays from days to seconds.

Q: Can individuals invest in stablecoins?
A: Yes. In regulated markets like Hong Kong, individuals can hold stablecoins through licensed platforms offering virtual asset services. They’re often used as low-risk digital cash equivalents within crypto portfolios.

Q: Is there risk in using stablecoins?
A: While designed to be low-volatility, risks include reserve transparency issues (if not audited), regulatory changes, smart contract vulnerabilities, and issuer solvency concerns. Regulated jurisdictions like Hong Kong mitigate these through strict oversight and mandatory 1:1 backing.

Q: Could RMB-backed stablecoins challenge USDT or USDC?
A: Potentially yes—especially if backed by strong trade networks and adopted through platforms like the digital yuan or Belt and Road initiatives. However, trust in transparency and rule of law will be crucial for global acceptance beyond regional use cases.