The United States promotes stablecoins to consolidate dollar dominance, with many Asian countries getting involved: the new battlefield of digital finance has begun!

In today’s rapidly changing global financial landscape, a silent war over “stablecoins” has already begun. This is not just another iteration of cryptographic technology, but a brand-new battleground that influences the global monetary power structure. In this competition, the United States is attempting to extend its traditional dollar dominance into the digital realm, while Asian powers led by China, Japan, South Korea, and India are rapidly rising, challenging with diversified and localized strategies. A new digital financial order composed of the US dollar, euro, and multiple Asian currencies is gradually taking shape amid this East-West struggle.

America’s Overt Strategy

To understand America’s proactive deployment in the stablecoin field, one must see the deep economic and political motives behind it. Russian President Vladimir Putin’s senior advisor Anton Kobyakov pointed out sharply that the US promoting stablecoins is part of its “ultimate plan” to address its massive national debt exceeding 35 trillion dollars. He believes Washington is trying to replicate its scripts from the 1930s (the dollar decoupling from gold) and the 1970s (abolishing the gold standard), reshaping monetary rules to shift the costs of its domestic fiscal problems onto the entire world.

The specific operational path of this script is clear. The GENIUS Act enacted in 2025 provides a federal legal framework for dollar stablecoins, with one core requirement being that reserve assets must be cash or short-term US Treasuries. This regulation cleverly creates a large and continuously growing “captive market” for US Treasuries. Data shows that stablecoin issuers have quietly become the third-largest buyers and the fourth-largest holders of US Treasuries. From Trump’s administration openly acknowledging that stablecoins are the best way to solidify the dollar’s reserve currency status, to his own claim that cryptocurrencies have the potential to “eliminate” America’s enormous debt, all reveal the true purpose of this “digital dollarization” movement: maintaining the operation of the financial system without painful fiscal reforms.

However, can this strategy truly be worry-free? Some economists warn that while stablecoins can temporarily increase demand for US Treasuries and ease fiscal pressure in the short term, it is akin to drinking poison to quench thirst. It cannot solve America’s long-standing fiscal imbalance and political divisions, and may even delay necessary structural reforms by creating a false sense of prosperity. In the long run, the dollar’s status ultimately depends on the health of the US economy, fiscal discipline, and the Federal Reserve’s ability to maintain low inflation, rather than clever financial tools. The seemingly demand-boosting string of stablecoins may ultimately become a “noose” used by the US to hang itself.

Asia’s Awakening

Faced with America’s digital dollar offensive, Asia is not a passive recipient. On the contrary, this region, the fastest-growing in the global economy, is building its own digital financial future with astonishing speed and determination. Data shows that the Asia-Pacific (APAC) region’s cryptocurrency trading volume surged by 69% in the year ending June 2025, reaching $2.36 trillion, making it the fastest-growing driver of global crypto activity, often surpassing North America and second only to Europe.

The driving force behind this wave is a deep reflection on the “myth of dollar hegemony.” Many Asian countries remain highly alert to “Dollarization 2.0,” with painful lessons from the Asian financial crisis still fresh—when dollar-denominated corporate debt became the straw that broke the camel’s back amid local currency devaluations. Therefore, rather than fully accepting dollar stablecoins, Asian nations prefer to develop stablecoins pegged to their own currencies to safeguard their monetary sovereignty and financial stability.

This “diversification of stablecoins” trend is unfolding across Asia: Japan’s Leadership: Japan has become a pioneer in this field. Its revised Payment Services Act provides one of the most comprehensive legal frameworks globally, defining stablecoins as “electronic payment tools.” This move has greatly stimulated the market, with the upcoming launch of the Japanese yen stablecoin JPYC, and giants like SBI Group, Circle, and Ripple announcing joint issuance of yen stablecoins. Benefiting from this, on-chain transaction value in Japan has increased by up to 120% year-over-year, leading Asia. South Korea’s Shift: South Korea is transitioning from research on central bank digital currencies (CBDCs) to encouraging private sector issuance of won stablecoins, with a comprehensive regulatory bill planned for submission by October 2025. With its advanced fintech infrastructure and widespread acceptance of mobile payments, Korea is poised to rapidly popularize stablecoin applications in retail payments and cross-border remittances. Hong Kong and Singapore’s Competition: As traditional financial hubs, Hong Kong and Singapore are fiercely competing through clear licensing regimes. Hong Kong’s implementation of the Stablecoin Ordinance in August 2025 has laid a solid foundation for becoming Asia’s stablecoin hub. China’s Strategy: China is exploring the issuance of a stablecoin linked to the renminbi as part of its broader strategy to internationalize the RMB and reduce reliance on the US dollar. With Hong Kong as a pilot zone, a China-led digital currency corridor focused on Belt and Road trade settlements is emerging. Grassroots Power in India and Southeast Asia: In countries like India, Vietnam, and the Philippines, crypto adoption is driven more by grassroots demand—whether the $3 billion monthly remittance market, young people seeking extra income, or hedging against local currency inflation. Stablecoins are filling gaps in traditional financial services, demonstrating strong vitality. India, with its large market size and institutional participation, ranks at the top in global crypto adoption indices.

Multipolar World

With Asian countries entering the scene and new technologies developing, the long-standing duopoly of Tether (USDT) and Circle (USDC) in the stablecoin market is rapidly breaking. In March 2024, their combined market share reached 91.6%, but now it has fallen to around 83%, continuing to decline.

Three main forces are driving this structural change: Self-Issued Stablecoins by Intermediaries: Exchanges, wallets, and DeFi protocols that previously relied on third-party issuers are now launching their own stablecoins. They aim to control the interest generated by reserves and user traffic, reducing dependence on USDT and USDC. Revenue-sharing Models: Emerging stablecoins like Ethena’s USDe and Agora’s AUSD share reserve income with token holders or partner platforms, offering attractive annual yields (APY) to capture market share. This fierce “yield war” is forcing the industry to rethink its business models. Traditional Financial Giants Enter: As regulatory frameworks clarify, Wall Street giants like JPMorgan and Bank of America are exploring the formation of stablecoin alliances. Once these banks with vast assets and customer bases enter the market, they will fundamentally change the game.

All these signals indicate that the stablecoin market is shifting from a “dual dominance” to a “multipolar” era involving exchanges, fintech firms, startups, and traditional banks.

Trillion-Dollar Stablecoins

This East-West competition over stablecoins is essentially a contest for dominance over the future global payment and settlement system. Industry estimates suggest that if just 1-2% of global cross-border payments shift to tokenized channels annually, on-chain transaction volume could reach 2 to 4 trillion dollars.

Currently, three forces are vying for this enormous cake: The US Model: Relying on the policy certainty provided by the GENIUS Act and the existing advantages of the dollar, by embedding stablecoins into current payment networks to accelerate dollar stablecoin adoption. The European Model: Centered on the MiCA regulation and the upcoming digital euro, setting usage thresholds to limit non-euro stablecoins within the EU, prioritizing consolidating the euro’s digital position domestically. The Asian Model: Not pursuing a single global currency dominance but focusing on establishing multiple regional trade and payment “corridors,” leveraging hubs like Hong Kong and Singapore to promote the use of yen, won, offshore RMB, and other regional stablecoins.

The outcome of this race will no longer be determined solely by market capitalization. Clarity of regulation, real-world practicality, integration with the real economy, and policy responsiveness will all influence who ultimately wins. The first stablecoin to reach a trillion-dollar market cap may still be linked to the dollar, but in an increasingly multipolar world, stories of “latecomers” surpassing incumbents can happen at any moment. The new battlefield of digital finance is already open, and the future world monetary map is being redrawn right now.