Stablecoin Market: New Opportunities and Challenges Amid Compliance Wave

The stablecoin market is迎来 unprecedented development opportunities. The continuous demand for payments and transactions is driving its growth, while the trends of compliance, institutionalization, and mainstreaming are shaping stablecoins into the core infrastructure of on-chain finance.

Circle, as a representative of compliant stablecoins, is at the core of this trend:

• Compliance status brings institutional advantages, making it the preferred choice for stablecoins within the system.
• An open technical architecture supports multiple chains, composability, and nesting, enabling integration in scenarios such as payments, DeFi, cross-chain, and RWA.
• Gain institutional-level trust and become the preferred settlement asset for traditional institutions entering the crypto world.

However, Circle also faces some challenges:

• Income is highly dependent on interest rates and is easily affected by cycles.
• High dependence on trading platforms and other channels
• Need to explore new business opportunities to break free from the constraints of the cycle and build a second growth curve.

The competition between USDC and USDT is no longer limited to a market capitalization battle, but represents a comprehensive contest of different dollar systems, clearing paths, and regulatory Compliance.

The listing of Circle marks the official entry of global stablecoins into the institutional track. The capital markets are betting not only on current revenue but also on whether Circle can become the key protocol layer of the on-chain dollar consensus system. When USDC becomes the universal circulation underlying the on-chain dollar, Circle's story will truly begin.

The stablecoin market is expected to see tens of times growth in the future. By 2030, the total market value of global stablecoins is projected to reach $1.6-3.7 trillion, with the main growth coming from three major areas: cross-border payments, on-chain finance, and RWA. Stablecoins are expected to become the "dollar liquidity core" within the Web3 ecosystem.

In terms of competitive landscape, Circle is facing dual challenges:

1. Compete with native players like Tether in terms of liquidity and use cases.
2. Competing with traditional financial giants like PayPal and JPMorgan for the authority of stablecoin system output.

Circle's advantages lie in its compliance first-mover strategy, open ecosystem, and institutional trust. However, as regulations are implemented, the entry of traditional financial institutions may pose a threat, especially in areas such as retail payments.

In the long run, Circle needs to upgrade from "licensed stablecoin" to "on-chain system coin" to meet the demands of emerging scenarios such as RWA. At the same time, Circle also needs to expand non-interest income sources, such as on-chain payment APIs and cross-chain channels, to reduce sensitivity to interest rates.