HTX Ventures released a research report on stablecoins, exploring the rise and challenges of stablecoins in the global payment system

In today's global financial system, stablecoins are playing an increasingly important role as a vital component of payment infrastructure and are becoming a backbone force in driving the mainstream development of cryptocurrencies. Recently, Huobi HTX's global investment department, HTX Ventures, released a research report ++“On-Chain Extension of the Dollar: Stablecoins, Shadow Banking, and the Reconstruction of Global Payment Weight”++, which deeply analyzes the rise of stablecoins in the global financial system and their strategic significance.

Building a "Parallel Dollar Network" to Reshape Payment Structures

In the global cross-border payment system, the US dollar has long held a dominant position, establishing a solid moat through fiat currency anchoring, international trade anchoring, and credit anchoring. However, the dollar-centric cross-border payment system has long faced issues such as low efficiency, high settlement costs, stringent scrutiny, and prominent financial exclusion, severely restricting financial inclusivity.

Against this backdrop, stablecoins provide a permissionless, highly liquid, and near-real-time payment solution through on-chain technology and dollar anchoring mechanisms. In terms of payment, the advantages of stablecoins include:

• Real-time arrival, clearing equals settlement: The blockchain structure inherently provides payment clearing consistency, avoiding the traditional T+1 or T+2 processes;
• Borderless circulation capability: Users only need a wallet and internet access to participate in the dollar payment network;
• Integration with multi-chain ecosystems and payment APIs: USDT and USDC now support multi-chain deployment on Ethereum, TRON, Solana, etc., and can be directly integrated with Web3 merchant systems and financial APIs;
• Combination of settlement currency and store of value: Stablecoins serve as a unit of account, means of payment, and store of value, making them suitable for replacing local currencies in high-inflation areas.

Therefore, stablecoins are gradually constructing a more convenient, inclusive, and censorship-resistant on-chain dollar system, becoming an important alternative to traditional systems, with their application scenarios also gradually expanding. In some Latin American countries, due to severe depreciation of local currencies, residents heavily rely on USDT as a means of daily payment, and some platforms have integrated stablecoin transfers with fiat currency deposits and withdrawals, forming a "on-chain dollar - local currency" exchange loop. Additionally, stablecoins are also used for import and export settlements between global SMEs, especially in countries facing dollar foreign exchange restrictions.

This parallel dollar network not only significantly enhances the efficiency of cross-border remittances, international trade payments, and transactions within the Web3 economy but also allows 1.3 billion unbanked people worldwide to access digital financial services, greatly increasing the international influence of the dollar.

Challenges of Stablecoins and "Shadow Banking"

Despite the many advantages of stablecoins, there are still numerous challenges in terms of compliance, liquidity, and privacy and scrutiny. As an emerging payment solution, stablecoins need to carefully address how to compromise with regulators, collaborate with payment institutions, and coexist and win with the dollar hegemony system, as they pose threats to central banks and traditional cross-border payment giants.

Moreover, stablecoins are playing the role of "shadow banking" for dollars on-chain, becoming a new channel for financing for the U.S. Treasury. Stablecoin issuers are akin to "on-chain money market funds," investing the dollars exchanged by users into short-term government bonds and other assets, and creating "credit currency" in the form of on-chain tokens. By combining the belief in dollar anchoring with on-chain high liquidity, stablecoins bring the logic of "the dollar as a global sovereign currency" from the traditional banking system into the DeFi world. From this perspective, stablecoins are not just a payment tool but also a cross-platform transplantation of a monetary value system. However, this structure, while enhancing the international penetration of the dollar, also challenges the monopoly of central banks in currency issuance and credit creation, and poses risks of regulatory inadequacy as well as systemic liquidity, security, and trust issues.

Global Regulatory Acceleration Towards Unification, Institutionalization of Stablecoins

The widespread use of stablecoins in cross-border payments has attracted significant attention from governments and regulatory agencies worldwide. Mature markets such as Europe and the U.S. have established a regulatory framework for stablecoins centered on compliance, capital requirements, and transparent reserves, while Asia seeks a balance between innovation and regulation. In the future, the mainstreaming process of stablecoins will increasingly rely on clear policy expectations and cross-border regulatory collaboration, with the depth and flexibility of regulation determining their legitimacy and vitality in the global payment system. HTX Ventures points out that the regulatory certainty and technological neutrality of stablecoins will determine whether they can truly assume the role of "digital age dollar infrastructure."

Huobi HTX Continues to Expand the Stablecoin Ecosystem, Strengthening Global Payment Network Strategy

As an active promoter of stablecoin development, Huobi HTX continues to expand the stablecoin matrix on its platform, further solidifying its core position in the global crypto ecosystem. Since May of this year, Huobi HTX has successively launched six stablecoins: USD1, EURR, USDR, EURQ, USDQ, and AETHUSDT. Among them, USD1, issued by the Trump family's crypto project World Liberty Financial, is expected to become a star project in the stablecoin sector as U.S. stablecoin regulations gradually clarify; Huobi HTX, as the global launch platform for USD1, added BTC/USD1 and ETH/USD1 trading pairs on June 17, further enriching the USD1 ecosystem.

These newly launched stablecoins not only enhance the asset choices and circulation efficiency for Huobi HTX platform users in a multi-chain, multi-currency environment but also provide more liquid and composable solutions for high-frequency trading, asset hedging, and on-chain payments.

About HTX Ventures

HTX Ventures is the global investment department of Huobi HTX, integrating investment, incubation, and research to identify the best and brightest teams worldwide. As an industry pioneer, HTX Ventures has over 11 years of experience in blockchain development, specializing in identifying cutting-edge technologies and emerging business models in the field. To drive growth within the blockchain ecosystem, we provide comprehensive support for projects, including financing, resources, and strategic advice.

HTX Ventures currently supports over 300 projects across multiple blockchain sectors, with some high-quality projects already trading on Huobi HTX. Additionally, as one of the most active FOF funds, HTX Ventures invests in 30 top global funds and collaborates with leading blockchain funds such as Polychain, Dragonfly, Bankless, Gitcoin, Figment, Nomad, Animoca, and Hack VC to jointly build the blockchain ecosystem.