The stablecoin market is now primarily dominated by USDT. Although it claims to be issued by Tether and each token is backed by 1 USD in assets, in reality, the company has never undergone a full third-party audit, which is the source of controversy. The earliest liquidity markets in Southeast Asia and globally relied on USDT, and now its scale has become enormous.

The benchmark is USDC issued by Circle. This US fintech company regularly undergoes asset audits by US regulatory authorities, and its trustworthiness in Europe and North America is actually higher than USDT. However, the usage scale of USDC is still far below USDT, mainly due to path dependence issues.

Ultimately, the biggest problem with stablecoins is centralization—issuers like Tether or Circle can freeze certain addresses at any time, which starkly contrasts with the decentralization philosophy of Bitcoin. Buying stablecoins is essentially giving money to these companies; if confidence collapses or audit issues are exposed, the situation could become very difficult to manage.

Governments worldwide are especially concerned with anti-money laundering measures. One of the core purposes of the stablecoin legislation is to bring this "shadow banking" sector under regulatory oversight. The US stance is very clear: it does not completely reject stablecoins but applies extraterritorial jurisdiction and strict regulation to all institutions providing stablecoin services to US citizens. A previous penalty on a major exchange was for this reason. As the scale of stablecoins explodes, the need for a new regulatory framework becomes increasingly urgent.

Historically, USDT has indeed experienced de-pegging, once only redeemable at 0.97 USD, caused by market confidence issues. If Tether were to face serious audit problems, USDT could de-peg to 0.8 or even lower, which would not just be price volatility but a systemic risk.