Every bull run, a Korean token pumps, thanks to a simple but powerful narrative:• 2018: Icon $ICX - Ethereum of Korea• 2021: Terra $LUNA - Decentralized stablecoin & high yieldThis cycle? $IP - AI x IP x Blockchain ...

$LUNA's collapse erased $40B from the crypto market in days.In this video, we cover the rise and fall of Terra — from how its algorithmic stablecoin worked to the chain reaction that triggered one of crypto’s biggest sellouts.Watch the full video 👉 https://t.co/6XmiGuOELR https://t.co/TY8KZRW0nB ...

Core Insights - The total market capitalization of stablecoins has grown from zero to over $251.7 billion since the inception of Tether (USDT) in 2014, with on-chain transaction volume reaching $5.6 trillion in 2024, establishing stablecoins as a cornerstone of the digital asset space [1] - The development of stablecoins is constrained by the "impossible trinity" dilemma, which highlights the challenge of achieving absolute price stability, extreme capital efficiency, and monetary independence simultaneously [1][5] - Different stablecoin designs reflect varying priorities, impacting their technological paths, risk exposures, and regulatory fates, ultimately shaping their roles in the global financial landscape [1] Group 1: Fiat-Collateralized Stablecoins - Fiat-collateralized stablecoins emerged to address the volatility of cryptocurrencies, providing a reliable "value benchmark" for decentralized finance (DeFi) applications and large-scale commercial settlements [2][3] - The 1:1 collateralization model, where each stablecoin is backed by an equivalent amount of fiat currency, has gained market trust, with USDC and USDT becoming foundational assets in the crypto economy, peaking at over $150 billion in market capitalization in 2022 [3] - The stability of fiat-collateralized stablecoins has been validated through compliance practices, as seen in Circle's USDC, which maintained its peg during the Silicon Valley Bank crisis in March 2023 [3] Group 2: Challenges of Fiat-Collateralized Stablecoins - Despite their success in price stability, fiat-collateralized stablecoins sacrifice capital efficiency and monetary independence, locking significant assets in low-yield reserves [5] - These stablecoins are essentially "digital dollars," relying on the dominance of the US dollar, which can exacerbate currency substitution issues in weaker economies [5] Group 3: Algorithmic Stablecoins - Algorithmic stablecoins emerged as a radical financial experiment aiming for high capital efficiency by using internal economic models instead of external collateral [6] - The collapse of Terra/LUNA serves as a cautionary tale, where the algorithmic mechanism failed under market pressure, leading to a loss of over $40 billion in value [7] - Even decentralized stablecoins like DAI have shifted towards incorporating fiat-collateralized assets to ensure stability, indicating a trend towards lower capital efficiency models [7] Group 4: Central Bank Digital Currencies (CBDCs) - The rise of CBDCs represents a response from central banks to the threats posed by private stablecoins, aiming to reclaim monetary sovereignty and enhance payment system efficiency [8][9] - CBDCs prioritize price stability and state monetary sovereignty, sacrificing capital efficiency in the process, which contrasts with the global nature of private stablecoins [9][10] - While CBDCs focus on enhancing financial stability within a centralized framework, they may lack the interoperability and capital efficiency of established global stablecoins [10] Group 5: Future Outlook - The stablecoin ecosystem is likely to evolve into a multi-layered and diversified landscape, with compliant fiat-collateralized stablecoins maintaining a significant role in mainstream finance, while those pursuing monetary independence thrive in DeFi [11] - CBDCs will reshape retail and wholesale payment systems at the national level, reflecting an ongoing tension between stability, efficiency, and sovereignty in the future of currency [11]

Core Viewpoint - Stablecoins provide a stable digital currency option that is pegged to fiat currencies, primarily the US dollar, to facilitate transactions in a volatile cryptocurrency market [2][15]. Group 1: Emergence of Stablecoins - Stablecoins emerged to address the volatility of cryptocurrencies like Bitcoin, which are unsuitable for daily transactions [2]. - The core principle of stablecoins is that one stablecoin equals one US dollar, providing a reliable medium of exchange [2]. Group 2: Types of Stablecoin Issuance Mechanisms - There are three main types of stablecoin issuance mechanisms: fiat-collateralized, crypto-collateralized, and algorithmic [3][6]. - Fiat-collateralized stablecoins, such as USDT and USDC, are backed by bank deposits or government bonds, generating interest income for the issuing platform [3][8]. - Crypto-collateralized stablecoins, like DAI, require users to over-collateralize their assets, which can lead to high liquidation risks [5][10]. - Algorithmic stablecoins, such as UST, rely on market mechanisms to maintain their peg but have shown vulnerabilities, as seen in the collapse of UST [6][11]. Group 3: Profit Models of Stablecoins - The profit model for fiat-collateralized stablecoins involves earning interest on the reserve assets, with USDT projected to generate over $10 billion in revenue in 2024 [9][8]. - Crypto-collateralized stablecoins charge users a stability fee for minting, which funds the operational costs of the protocol [10]. - Algorithmic stablecoins previously offered high yields to attract users but ultimately relied on continuous new investments, leading to unsustainable practices [11]. Group 4: Regulatory Developments and Applications - Hong Kong is exploring a government-regulated approach to stablecoins, focusing on real asset backing and rapid redemption capabilities [12][14]. - Institutions like JD.com and Standard Chartered are participating in pilot programs to issue stablecoins pegged to the Hong Kong dollar [13]. - Practical applications of stablecoins include cross-border B2B settlements, supply chain payments, and interactions with digital currencies like the digital yuan [15].

Core Viewpoint - Stablecoins, regarded as the "digital dollar" of the crypto world, are currently at the forefront of regulatory reform, particularly following the signing of the Genius Act by President Trump, which establishes clear federal standards for stablecoin issuance and regulation [1][12]. Summary by Sections Regulatory Framework - The Genius Act mandates that only entities with federal licenses or those regulated by the Federal Reserve and FDIC can issue "payment stablecoins," requiring issuers to hold high-quality reserve assets such as cash or U.S. Treasury bonds [1][12]. Market Overview - As of July 22, 2025, the total market capitalization of global stablecoins is approximately $268 billion, with Tether (USDT) being the largest at around $161 billion, followed by USDC at about $65 billion [2][3]. Tether (USDT) - USDT is the most liquid stablecoin but has faced transparency issues regarding its reserves, leading to past controversies and fines from regulatory bodies [2]. USDC - USDC is the second-largest stablecoin, known for its transparent asset disclosures and public audits, but it faced a significant price drop during the Silicon Valley Bank crisis in 2023 [3][8]. Case Studies - The UST collapse in 2022 exemplified the risks of algorithmic stablecoins, where a failure in the underlying asset led to massive market losses [5][7]. - The USDC crisis in March 2023, triggered by the Silicon Valley Bank's insolvency, resulted in a 12% price drop, highlighting the importance of reliable asset backing and federal guarantees [8][9]. Key Insights - Stablecoins require real, liquid, and low-risk assets for stability, with U.S. dollars or Treasury bonds being the most trusted collateral [9]. - For stablecoins to become mainstream payment tools, they must integrate into traditional financial regulatory frameworks, ensuring compliance and security [9][12]. - The design of stablecoins should include fair redemption mechanisms and liquidity stress testing to prevent panic-induced runs [10][11]. Regulatory Developments - The Genius Act and Hong Kong's Stablecoins Ordinance aim to enhance transparency and risk control in stablecoin issuance, with different focuses on compliance and innovation [12][13]. - Both regulations emphasize the need for stablecoins to be treated as "digital cash" with regulatory oversight, aiming for a balance between safety, transparency, and efficiency [14]. Future Outlook - The U.S. and Hong Kong are likely to engage in a competitive yet complementary relationship regarding stablecoin internationalization, with U.S. stablecoins potentially integrating into global payment systems and Hong Kong serving as a bridge for digital RMB [14][15].

Group 1: Core Insights - The U.S. Senate passed the "GENIUS Act" establishing the first federal regulatory framework for stablecoins, reflecting a global consensus on recognizing stablecoins' legitimacy [1][2] - Major companies like Mastercard and Morgan Stanley are actively exploring stablecoin integration into their payment systems, indicating a growing recognition of stablecoins' commercial value [2][3] - Stablecoins are categorized into three main types: fiat-collateralized, crypto-collateralized, and algorithmic stablecoins, each with distinct mechanisms and risks [3][4][5] Group 2: Market Dynamics - Fiat-collateralized stablecoins dominate the market, accounting for approximately 90% of the total stablecoin market capitalization, with USDT and USDC being the most prominent [8][9] - The use of stablecoins has expanded beyond the crypto industry, finding applications in cross-border payments, daily transactions, and as a hedge against inflation in emerging markets [10][11][15] Group 3: Regulatory Landscape - Various countries are implementing regulations to address the risks associated with stablecoins, including limitations on non-local stablecoins to protect monetary sovereignty [30][31] - The European Union's MiCA regulation categorizes stablecoins and imposes strict requirements on their issuance and operation, aiming to mitigate financial risks and enhance compliance [31][36] Group 4: Strategic Recommendations for China - China should adopt a cautious approach towards stablecoins, focusing on research and regulatory frameworks while considering the unique national context and the existing digital yuan [38][39] - Promoting offshore RMB stablecoins could enhance the internationalization of the yuan and expand its use in emerging digital scenarios [41] - Strengthening the collaboration between stablecoins and the digital yuan can leverage their complementary advantages in cross-border payments and digital asset exchanges [42]

Core Viewpoint - Kraken is launching tokenized versions of over 50 US stocks and ETFs for non-US customers, aiming to reduce barriers for global investors to access the US stock market [1][2]. Group 1: Tokenized Stocks - The tokenized stocks, referred to as "xStocks," will operate on the Solana blockchain and allow for 24/7 trading [1]. - Kraken has partnered with a fintech company to purchase and hold actual stocks and ETFs, issuing corresponding tokens that maintain price parity with the underlying assets [2]. - The tokens are classified as stablecoins, which are cryptocurrencies pegged to real assets to maintain price stability [2]. Group 2: Regulatory Compliance - To avoid regulatory issues, Kraken's tokenized stocks will not be available to US users, and the company is working with regulators to ensure compliance in various countries [2][5]. - Kraken has implemented three compliance strategies, including legal entity isolation and cash redemption clauses to mitigate risks associated with token price decoupling [5]. Group 3: Investor Rights and Risks - Investors in tokenized stocks will not have voting rights, which is a significant difference from direct stock ownership [6]. - Concerns about asset security and the ability to redeem tokens for actual stocks have been raised by investors [4][6]. Group 4: Market Impact - The issuance of tokenized stocks is expected to enhance liquidity and demand for already listed stocks [8]. - Regulatory bodies like the SEC are adapting to market demands, exploring frameworks for the tokenization of securities, which could transform the securities market [8].

Group 1 - Stablecoins serve as a bridge between the real world and the Web3 blockchain, facilitating participation in DeFi, NFTs, and cross-border payments while maintaining price stability [1] - Bitcoin acts as a foundational currency in the Web3 ecosystem, contrasting with stablecoins that mitigate price volatility and address traditional financial inefficiencies [1] - The emergence of stablecoins is driven by the need for a new currency system to enhance the efficiency of traditional financial services [1] Group 2 - Hong Kong has officially released its stablecoin regulations, marking a significant step in digital asset regulation in the Asia-Pacific region [3] - The core of the regulations includes a licensing system requiring issuers of fiat-backed stablecoins to obtain a license from the Hong Kong Monetary Authority (HKMA) [3] - The licensing requirements include a minimum paid-up capital of HKD 25 million, asset audits, redemption mechanisms, and compliance standards [3] Group 3 - The stringent regulatory requirements are influenced by the collapse of TerraUSD in 2022, which highlighted the risks associated with algorithmically pegged stablecoins [4] - The failure of TerraUSD, which reached a market cap of USD 18 billion, underscores the need for robust regulatory frameworks to protect consumers and ensure orderly industry development [4] - As of 2023, 25 countries or regions have established stablecoin legislation or regulatory frameworks, with Hong Kong's regulations advancing the compliance process for digital assets [4]

Core Viewpoint - The passage of the GENIUS Act marks the establishment of a federal regulatory framework for stablecoins in the U.S., leading to increased regulatory certainty and innovation in the industry [2] Group 1: Institutional Involvement and Product Iteration - Traditional financial institutions and tech giants are accelerating their entry into the stablecoin space following the act's passage, with Fidelity's stablecoin project directly competing with Circle's USDC and Tether's USDT [3] - World Liberty Financial has launched a USD1 stablecoin, indicating a trend towards compliance and strategic value of stablecoins as digital representations of fiat currency [3] Group 2: Cross-Border Payments and Regional Financial Centers - The act's inclusive design for cross-border payments promotes international regulatory recognition, enhancing Thailand's position as a digital currency hub in Southeast Asia [4] - Countries like Singapore and the UAE are optimizing their stablecoin regulations, forming a cross-border payment network centered around USD stablecoins, thereby reinforcing the dollar's dominance in the digital economy [4] Group 3: Risks for Algorithmic Stablecoins - The act imposes strict reserve requirements, which may marginalize algorithmic stablecoins like DAI, as they lack fiat reserves and could be classified as high-risk [5] - Historical lessons from the Terra (LUNA) model have led regulators to adopt a cautious stance towards uncollateralized stablecoins [5] Group 4: Global Regulatory Competition and Technological Standards - The U.S. aims to lead stablecoin regulations, but regional frameworks like the EU's MiCA and Japan's Payment Services Act create competitive differentiation [7] - Regulatory discrepancies may lead to fragmented technological standards, necessitating multi-chain compatibility solutions for businesses [7] Group 5: Acceleration of Tokenization of Compliant Assets - The act allows reserves to be held in tokenized form, stimulating the blockchainization of traditional assets like U.S. Treasury and corporate bonds [8] - The maturation of such products will enrich the DeFi ecosystem with more collateral options, promoting compliant development in lending and derivatives [8] Group 6: Surge in Demand for RegTech - Blockchain companies will need to implement automated regulatory reporting systems to meet monthly reserve audits and anti-money laundering requirements [9] - Technologies like oracles and zero-knowledge proofs will be widely adopted for real-time data verification, making cross-chain interoperability a core competitive advantage in compliance infrastructure [9] Group 7: Restructuring of the Stablecoin Market Landscape - The act's passage is expected to further strengthen the head effect, with compliant stablecoins like USDT and USDC potentially capturing over 90% market share [10] - Smaller issuers may achieve scale through mergers and acquisitions, while technological innovations will create new niches, such as carbon credit-linked stablecoins [10]