Great point here:Paxos moving from Binance to HL would be a fun twist of events.https://t.co/tlX18BI8xIaltoshi (@stablealt):just a fun fact: BUSD, Binance’s stablecoin, was issued by Paxosit would be pretty ironic if USDH, Hyperliquid’s stablecoin, ended up being issued by the same company.Paxos are willing to use 95% of yield to buyback HYPE & redistribute back to the community.I don’t think ...

Group 1: Core Insights on Stablecoins - Stablecoins have evolved from being a volatility "safe haven" to a tool for the globalization of the US dollar, with Binance facilitating around 70% of global stablecoin trading volume [2][5] - The rapid growth of USDT began post-2017, driven by the demand for dollar alternatives among Asian users and the subsequent introduction of BUSD, which reached a market cap of $23 billion by 2023 [4][6] - The US government's changing stance on stablecoins reflects their strategic importance in maintaining the dollar's global dominance, with over $100 billion in USDT being used to purchase US Treasury bonds [6][7] Group 2: Challenges in Real-World Asset Tokenization (RWA) - RWA tokenization faces significant challenges, including liquidity issues, regulatory complexities, and product mechanism flaws [7][9][10] - Non-financial assets struggle with liquidity post-tokenization, leading to a vicious cycle of low trading volume and shallow order books [8] - Regulatory hurdles arise from the classification of tokenized products, complicating compliance across different jurisdictions [9] Group 3: Future of Decentralized Exchanges (DEX) - The future of trading is expected to shift towards decentralized exchanges, which are anticipated to surpass centralized exchanges in scale over the next 10 to 20 years [18][19] - DEXs offer advantages such as high transparency and ease of use, although they currently face challenges in user experience and security [18] - The market for DEXs is still in its early stages, with significant growth potential as the ecosystem matures [19] Group 4: Digital Asset Treasury (DAT) Strategies - DAT strategies aim to bridge traditional investors into the crypto space by packaging digital currencies in a stock-like manner [20][25] - Various operational models exist within DAT, including passive single-asset holding, active trading, multi-asset management, and ecosystem investment [21][22][23][24] - The DAT model allows traditional investors, including state-owned enterprises, to gain exposure to digital currencies without direct purchases [26] Group 5: AI and Web 3.0 Integration - The integration of AI and Web 3.0 is seen as a future trend, with potential for exponential growth in blockchain transaction volumes as AI systems require digital currencies for transactions [27][28] - Current AI applications in Web 3.0 are still in early development stages, lacking practical value, but the potential for significant economic impact exists [28][29] - The funding challenges for AI development may lead to innovative financing solutions through Web 3.0, promoting a more decentralized and open approach [29]

Core Insights - Stablecoins serve as a "dual currency" between decentralized digital currencies and fiat currencies, offering advantages in payment convenience, privacy protection, and value stability, thus becoming a low-cost, high-efficiency payment tool [1] - The recent regulatory policies in the US and Hong Kong have initiated a new "currency war," positioning the stablecoin market as a critical battleground for maintaining US dollar hegemony and promoting the internationalization of the Chinese yuan [1] Group 1: Definition and Mechanism of Stablecoins - Stablecoins are special digital currencies issued by stablecoin developers, large e-commerce companies, and licensed financial institutions, combining the advantages of digital currencies and fiat currencies [2] - The core technology of stablecoins is based on decentralized distributed ledger technology within blockchain systems, enabling direct payment transactions without traditional banking intermediaries [2] Group 2: Types and Issuance Mechanisms of Stablecoins - The main issuance mechanisms for stablecoins include fiat currency collateralized issuance, cryptocurrency collateralized issuance, high liquidity commodity collateralized issuance, and algorithmic uncollateralized issuance, with fiat and cryptocurrency collateralized issuance accounting for over 99.8% of the market [3][4] - Fiat currency collateralized stablecoins are pegged to a single currency or a basket of fiat currencies, while cryptocurrency collateralized stablecoins use cryptocurrencies as collateral, often employing over-collateralization to mitigate market risks [3][4] Group 3: Market Value and Growth of Stablecoins - Since 2020, the stablecoin market has grown from 5 billion to 250 billion USD, with an annual growth rate exceeding 100%, and transaction volumes approaching 37 trillion USD [7] Group 4: Regulatory Landscape and Market Analysis - The regulatory frameworks in China, Hong Kong, and the US differ significantly, with China prioritizing financial sovereignty, Hong Kong focusing on market development, and the US emphasizing the control of underlying technologies to maintain dollar dominance [11][8] - The US stablecoin market is dominated by USDT and USDC, which together account for over 80% of the market share [10] Group 5: Recent Regulatory Developments - The US Senate passed the "GENIUS Act" on May 19, 2025, establishing a federal regulatory framework for stablecoins, requiring issuers to obtain licenses and maintain a 1:1 collateralization ratio with high liquidity assets [14][15] - Hong Kong's "Stablecoin Ordinance," effective August 1, 2025, introduces a licensing regime for stablecoin issuers, ensuring 100% reserve requirements and enhancing market transparency [16][17] Group 6: Applications in Cross-Border Payments and E-commerce - Stablecoins are positioned as a solution to the inefficiencies of traditional cross-border payment systems, significantly reducing costs and transaction times [32] - Major e-commerce giants like JD.com and Ant Group are exploring the issuance of their own stablecoins to enhance financial capabilities and streamline cross-border transactions [35]

Investment Rating - The report maintains an "Accumulate" rating for the blockchain industry, specifically focusing on stablecoins [4]. Core Insights - Stablecoins have emerged as essential tools in the cryptocurrency market, serving as a bridge between traditional finance and Web3.0, facilitating transactions and providing liquidity [7][30]. - The demand for stablecoins is driven by their ability to act as a "fiat currency" on the blockchain, enabling seamless integration with decentralized finance (DeFi) projects [8][12]. - The report highlights the increasing adoption of stablecoins by traditional financial institutions, indicating a trend towards institutionalization in the Real World Assets (RWA) sector [51][52]. Summary by Sections 1. Core Insights - Stablecoins originated in the early days of Web3.0 as a means to facilitate cryptocurrency transactions and have evolved into foundational tools for exchanges, DeFi, and RWA ecosystems [7]. - The success of stablecoins hinges on market trust, which is closely tied to their credit transmission mechanisms [7]. 2. The Necessity of Stablecoins - Stablecoins serve as a digital representation of fiat currencies on the blockchain, allowing for deeper integration with DeFi projects [8]. - The need for stablecoins arose from the limitations of traditional fiat currencies in the blockchain space, particularly regarding transaction speed and interoperability [9][10]. 3. RWA as a Key Application Area - RWA has become a significant driver for the cryptocurrency market, with traditional financial institutions increasingly adopting stablecoins to facilitate transactions [51]. - The report notes that the RWA market has shown resilience and growth, even amid fluctuations in cryptocurrency prices [49]. 4. Regulatory Considerations for Stablecoins - The report discusses the ongoing evolution of stablecoin regulation, emphasizing the need for a balanced approach that fosters innovation while ensuring consumer protection [5]. 5. Credit Transmission Models for Stablecoins - There are three primary models for credit transmission in stablecoins: centralized issuance backed by reserves, decentralized issuance through collateralized assets, and algorithmic stablecoins [32]. - USDT, as a centralized stablecoin, relies on traditional market mechanisms for credit transmission, while DAI and USDS utilize decentralized models [33][39]. 6. Market Dynamics and Trends - As of May 3, 2025, the total issuance of stablecoins exceeded $240 billion, with USDT and USDC dominating the market [26][23]. - The report highlights the growing importance of decentralized stablecoins in the DeFi ecosystem, although centralized stablecoins still hold a significant market share [20][24].