The U.S. promotes stablecoins to consolidate the dollar's hegemony, and many Asian countries are getting involved: the new battleground for digital finance has begun!

In today's world of drastic changes in the global financial landscape, a silent war surrounding "stablecoin" has already begun. This is not just another iteration of encryption technology, but a new battleground that affects the global monetary power structure. In this competition, the United States is trying to extend its traditional dollar hegemony into the digital realm; however, Asian powers led by China, Japan, South Korea, and India are rapidly rising, launching challenges with diversification and localization strategies. A new digital financial order composed of the dollar, euro, and multiple Asian currencies is gradually taking shape in this tug-of-war between East and West.

American conspiracy

To understand the United States' proactive positioning in the stablecoin sector, one must see the underlying economic and political motives behind it. Russian President Putin's senior advisor Anton Kobyakov pointed out sharply that the U.S. promotion of stablecoins is one of its "endgame plans" to cope with its massive national debt of over 35 trillion dollars. He believes that Washington is trying to replicate its script from the 1930s (the decoupling of the dollar from gold) and the 1970s (the abolition of the gold standard) by reshaping monetary rules to shift the cost of its domestic fiscal issues onto the whole world.

The specific operational path of this script is clearly visible. The "GENIUS Act" enacted in 2025 provides a federal-level legal framework for USD stablecoins, one of its core requirements being that the reserve assets for stablecoins must be cash or short-term U.S. Treasury bills. This regulation cleverly creates a huge and continuously growing "captive market" for U.S. Treasury bills. Data shows that stablecoin issuers have quietly become the third-largest buyers and fourth-largest holders of U.S. Treasury bills. From the Trump administration's public acknowledgment that stablecoins are the best way to solidify the dollar's reserve currency status, to his own claim that encryption has the potential to "eliminate" America's massive debt, all reveal the true purpose of this "digital dollarization" movement: to maintain the operation of its financial system without undergoing painful fiscal reforms.

However, can this strategy really allow for peace of mind? Some economists have warned that although stablecoins can increase demand for U.S. Treasuries in the short term and temporarily alleviate fiscal pressure, it is no different from drinking poison to quench thirst. It not only fails to address the long-standing issues of fiscal imbalance and political division in the U.S., but may also delay necessary structural reforms by creating a false prosperity. In the long run, the status of the dollar ultimately depends on the health of the U.S. economy, the robustness of its finances, and the Federal Reserve's ability to maintain low inflation, rather than the clever design of financial instruments. The seemingly demand-pulling rope of stablecoins may ultimately become the "rope used by the U.S. to hang itself."

Awakening of Asia

In the face of the United States' digital dollar offensive, Asia is not a passive recipient. On the contrary, this region, which is the fastest-growing in the global economy, is building its own digital financial future with astonishing speed and determination. According to data, the cryptocurrency trading volume in the Asia-Pacific (APAC) region skyrocketed by 69% in the year leading up to June 2025, reaching $2.36 trillion. It has become the fastest-growing driver of global encryption activity, with trading volumes often surpassing North America, second only to Europe.

The driving force behind this wave is a profound reflection on the "myth of dollar hegemony." Many Asian countries remain highly vigilant about "dollarization 2.0," as the painful lessons of the Asian financial crisis are still fresh in memory—at that time, corporate debt denominated in dollars became the last straw that crushed the economy when local currencies devalued. Therefore, instead of fully embracing dollar stablecoins, Asian countries prefer to develop stablecoins pegged to their own currencies to maintain their monetary sovereignty and financial stability.

This trend of "stablecoin diversification" is unfolding across Asia. Japan's Lead: Japan has become a pioneer in the field, with its revised Payment Services Act creating one of the most comprehensive legal frameworks for stablecoins globally, defining them as "electronic payment tools." This move has greatly stimulated the market, with the Japanese yen stablecoin JPYC set to launch, and giants like SBI Group, Circle, and Ripple announcing plans to jointly issue a yen stablecoin. Benefiting from this positive news, Japan's on-chain transaction value has increased by as much as 120% year-on-year, leading in Asia. South Korea's Shift: South Korea is shifting from research on central bank digital currency (CBDC) to encouraging the private sector to issue won stablecoins, planning to submit a comprehensive regulatory bill by October 2025. With its highly developed fintech infrastructure and widespread acceptance of mobile payments, South Korea is expected to rapidly popularize stablecoin applications in retail payments and cross-border remittances. Competition between Hong Kong and Singapore: As traditional financial centers, Hong Kong and Singapore are engaged in fierce competition through clear licensing systems. The Stablecoin Regulation to be implemented in Hong Kong in August 2025 lays a solid foundation for its ambition to become an Asian stablecoin hub. China's Layout: China is exploring the issuance of stablecoins pegged to the yuan as part of its broader strategy to promote yuan internationalization and reduce reliance on the US dollar. With the pilot in Hong Kong, a China-led digital currency corridor focused on "Belt and Road" trade settlement is on the horizon. Grassroots Forces in India and Southeast Asia: In countries like India, Vietnam, and the Philippines, the adoption of cryptocurrencies is more driven by the actual needs of the grassroots. Whether it’s the $3 billion monthly remittance market, young people seeking additional income, or a hedging tool against domestic currency inflation, stablecoins are filling the gaps in traditional financial services, demonstrating strong vitality. India, in particular, ranks first in the global crypto adoption index due to its large market size and institutional participation.

multipolar pattern

With the entry of various Asian countries and the development of new technologies, the stablecoin market, long monopolized by Tether (USDT) and Circle (USDC), is being rapidly disrupted. In March 2024, their combined market share once reached as high as 91.6%, but has now fallen to around 83%, and is still on a downward trend.

The main driving forces behind this structural change are three: The "self-issued coins" of intermediary institutions: In the past, exchanges, wallets, and DeFi protocols relied on third parties to issue stablecoins, but now they are choosing to launch their own stablecoins. They hope to gain control over the interest income generated from reserve assets and user traffic, freeing themselves from dependence on USDT and USDC. The rise of revenue-sharing models: Emerging stablecoins such as Ethena's USDe and Agora's AUSD share the income generated from reserves with token holders or partner platforms, aiming to capture market share by providing highly attractive annual percentage yields (APY). This intense "battle for yields" is forcing the entire industry to rethink its business model. The entry of traditional financial giants: As the regulatory framework becomes clearer, Wall Street giants like JPMorgan and Bank of America have begun exploring the establishment of stablecoin alliances. Once these banks, which possess vast asset scales and customer bases, officially enter the market, it will completely change the rules of the game.

All of this indicates that the stablecoin market is moving from a "dual dominance" to a "multipolar" era involving exchanges, fintech companies, startups, and traditional banks.

trillion-level stablecoin

The competition between the East and West surrounding stablecoins is essentially a struggle for dominance over the future global payment and settlement systems. According to industry estimates, if only 1% to 2% of global cross-border payments shift to a tokenized framework, the annual on-chain transaction volume could reach as high as 2 to 4 trillion dollars.

Currently, three forces are competing for this huge cake: US Model: Accelerating the adoption of US dollar stablecoins by embedding stablecoins into existing payment networks, relying on the policy certainty of the GENIUS Act and the existing advantages of the US dollar. European Model: Focusing on the MiCA Act and the upcoming digital euro, prioritizing the consolidation of the euro's digital status locally by setting usage thresholds to limit the payment applications of non-euro stablecoins within the EU. Asian Model: Not pursuing a single currency's global dominance, but instead focusing on establishing multiple regional trade and payment "corridors," promoting the use of various stablecoins such as the Japanese yen, South Korean won, and offshore Chinese yuan through hubs like Hong Kong and Singapore.

The outcome of this competition will no longer be determined solely by market capitalization. The clarity of regulations, the practicality in the real world, the depth of integration with the实体经济, and the sensitivity and execution of policies in various countries will collectively determine who can ultimately prevail. The first stablecoin to reach a trillion-dollar market cap may still be pegged to the US dollar, but in an increasingly multipolar world, the story of "the latecomer overtaking the front-runners" could happen at any time. A new battlefield for digital finance has begun, and the future landscape of world currencies is being redrawn at this very moment.

#stablecoin