With Circle’s successful listing on NASDAQ, the stablecoin market is undergoing a structural reshaping. While the market focuses on Circle’s $5 billion market capitalization and its stablecoin business model, a deeper transformation is taking place: the value creation center of stablecoins is shifting from the simple “issuance” phase to “creation, empowerment, and deepening application scenarios.” This is not a mere adjustment of business strategy, but a fundamental reconstruction of the entire industry’s value logic. By analyzing the driving factors, market landscape, and development path of this transformation, we will see that the future competitive core of stablecoins lies not in “who can issue more coins,” but in “who can create and control more valuable application scenarios.”

1. Value Shift: From Issuance Dominance to Scenario Competition

When we analyze the development trajectory of the stablecoin industry, a clear pattern emerges: this field is shifting from a “issuer-centric” model to a “scenario-centric” model. This transformation is not accidental; rather, it is the result of five structural forces working together.

The squeeze effect in the issuance phase. Circle’s prospectus reveals a key reality: even as the second largest issuer in the market, it must pay 50% of its net interest income (NII) to Coinbase as a distribution subsidy. This costly distribution model exposes the substantial compression of profit margins in the issuance phase. As excess profits diminish, market participants are forced to explore other segments of the value chain, particularly at the application scenario level.

The network effects in the issuance stage have become solidified. As a medium of value, the utility of stablecoins largely depends on their acceptance - the more people use a certain stablecoin, the more valuable it becomes. This typical network effect has allowed USDT to firmly occupy 76% of the market share, while USDC struggles to maintain a 16% position, with all other competitors sharing the remaining 8%. This market structure has become highly entrenched, making it difficult for new entrants to shake up the existing landscape simply by issuing new stablecoins.

A fundamental shift in regulatory orientation. The global regulatory framework for stablecoins is transitioning from “risk prevention” to “promoting innovation and emphasizing application.” The U.S. “GENIUS Act” clearly distinguishes between “payment stablecoins” and other types of stablecoins, designing a specific compliance pathway for the former; Hong Kong officially passed and implemented the “Stablecoin Issuer Ordinance Draft” on May 21, 2024, which not only regulates issuance activities but also provides a clear legal framework for innovative applications based on stablecoins; the Monetary Authority of Singapore (MAS) further categorizes stablecoins into “single currency stablecoins” (SCS) and other types, designing differentiated regulatory measures for different application scenarios. These regulatory trends point in one direction: the value of stablecoins will increasingly depend on their performance in actual application scenarios, rather than just their issuance scale.

The qualitative change in user demand. A sign of an increasingly mature market is that user demand has shifted from simply holding stablecoins to using stablecoins to solve specific problems. Early users may have been content with merely holding a “digital version of the dollar,” but users in a mature market expect to see practical applications beyond speculation. This shift in demand forces market participants to move their focus from “minting more tokens” to “creating more use cases.”

Considerations for the sustainability of business models. As competition in the stablecoin market intensifies, business models that solely rely on seigniorage and issuance scale face long-term sustainability challenges. Competition in the issuance stage will lead to an increase in reserve fund yield bidding, squeezing profit margins. In contrast, the development of application scenarios can bring a more diversified income structure, including transaction fees, value-added service fees, and revenue sharing from financial products, providing a more sustainable business model for participants in the stablecoin ecosystem.

These five forces together are driving the stablecoin industry from “issuance wars” to “scenario competition.” Looking back at the industry’s development history, we can clearly identify three stages of development:

• Proof of Concept Phase (2014-2018): Stablecoins were accepted by the market as a concept, primarily to meet the liquidity needs of the cryptocurrency trading market.
• Transaction Medium Period (2018-2023): The position of stablecoins in trading scenarios has been solidified, with a surge in minting volume.
• Practical Value Period (2024-): Market focus shifts from issuance scale to the development of practical application scenarios and value creation.

We are at the beginning of the third phase, where the core competition will revolve around “who can create more valuable application scenarios.” It is crucial for market participants to understand this shift, as it will redefine the standards of success and the model of value distribution.

2. Deepening the Scene: The Value Gold Mine of Stablecoin Applications

To truly understand the deep logic of “scenarios are king,” we need to penetrate the surface technical discussions and delve into the specific mechanisms by which stablecoins create value in different application scenarios. This analysis cannot be limited to simple statements of “increasing efficiency” and “reducing costs,” but must dissect the inherent complexities of each scenario, existing pain points, and the transformative potential of stablecoin technology.

1. B2B cross-border payment and trade finance: Beyond simple “fund transfer”

The issues surrounding B2B cross-border payments are far more complex than they appear on the surface. Traditional narratives often focus on the speed and cost of payments, but the real pain points lie in the fragmentation and uncertainty of the entire cross-border payment and trade finance ecosystem.

When an Asian company makes a payment to a European supplier, the challenges it faces include:

• Exchange rate risk management: During the lag period from payment decision to fund arrival, exchange rate fluctuations can erode 1-3% of value.
• Liquidity Segmentation: The capital pools of enterprises in different markets are isolated from each other and cannot be effectively integrated.
• Uncertainty of settlement time: The delivery time of traditional cross-border payments is highly variable, causing difficulties in supply chain management and cash flow planning.
• Complexity of Payment Compliance: Cross-border payments involve multiple regulatory frameworks, with high compliance costs and significant risks.
• Disconnection between finance and payment: Payment and trade finance (such as letters of credit, factoring, and supply chain financing) lack seamless integration.

The value of stablecoins in this scenario lies not only in accelerating fund transfers but also in creating a comprehensive value system through smart contracts and blockchain technology.

• Programmable payment conditions: Payments can be automatically linked to trade events (such as shipment confirmation, quality inspection approval), achieving programmable control over trade processes.
• Real-time foreign exchange processing: Minimize exchange rate fluctuation risks through intelligent routing and real-time pricing of a multi-currency stablecoin pool.
• Liquidity Integration: Liquidity across markets and coins can be managed uniformly on the same infrastructure, significantly improving the efficiency of fund utilization.
• The programmability of trade finance: Traditional trade finance tools such as letters of credit and accounts receivable financing can be converted into smart contracts on the blockchain, enabling automatic execution and risk management.

This comprehensive value enhancement far exceeds simple efficiency improvements; it actually reconstructs the operational model of B2B cross-border payments and trade finance. It is important to note that realizing this vision requires addressing numerous practical challenges, including legal framework adaptation (the legal validity of smart contracts in different jurisdictions), legacy system integration (interfacing with enterprise ERP and bank core systems), and cross-chain interoperability (value transfer between different blockchain networks).

2. Tokenization of Real-World Assets (RWA): Creating a New Value Internet

Tokenization of physical assets is another transformative application scenario for stablecoins, but its complexity and challenges are often underestimated.

In traditional financial systems, physical assets (such as real estate, commodities, and private equity) exhibit a significant illiquidity discount, which arises from multiple factors including high transaction costs, limited market participants, and inefficient value discovery mechanisms. The tokenization of physical assets promises to reduce this discount through blockchain technology, but to truly realize this promise, a complete ecosystem is needed, and stablecoins are a key infrastructure of this ecosystem.

Stablecoins play three key roles in the RWA ecosystem:

• Value Bridge: Connecting On-chain Tokenized Assets with Fiat Currency in the Traditional Financial System
• Trading medium: providing liquidity and counterparties for tokenized assets
• Income distribution channel: provides an automated distribution mechanism for the income generated by assets (such as real estate rental income, bond coupon payments)

Taking real estate tokenization as an example, the deep integration of stablecoins can create a whole new value model: investors can purchase tokenized real estate shares using stablecoins, rental income can be distributed in real time to token holders in the form of stablecoins, tokens can be used as collateral to obtain liquidity on stablecoin lending platforms, and all these operations can be automated through smart contracts, eliminating the need for traditional intermediaries.

However, the realization of this scenario faces complex challenges:

• Legal connection between on-chain and off-chain assets: How to ensure the legal relevance and enforceability mechanism of on-chain tokens and off-chain assets.
• The trustworthiness of value input: How to reliably input off-chain asset information into the on-chain system (oracle problem)
• Complexity of Regulatory Compliance: Tokenized assets may be subject to multiple regulatory frameworks, including securities law, commodity law, and payment law.

In this scenario, if stablecoin issuers only focus on maintaining coin value stability without participating in building a broader RWA ecosystem, they will struggle to capture the value of the scenario. In contrast, those participants who can provide integrated solutions for stablecoin payments, asset tokenization, trade matching, and compliance management will dominate this field.

3. Cross-ecosystem connector: The bridge between DeFi and traditional finance

In the current financial system, there are two parallel developing ecosystems: decentralized finance (DeFi) and traditional finance (TradFi). Each of these ecosystems has its unique advantages: DeFi offers permissionless access, programmability, and extremely high capital efficiency; TradFi, on the other hand, has regulatory certainty, deep liquidity, and a broad user base. In the long term, the maximization of the value of these two systems will be achieved through connection rather than replacement.

Stablecoins are becoming a key link between these two ecosystems, as they possess attributes of both worlds: they are tokens on the blockchain that can interact seamlessly with smart contracts; and they represent the value of fiat currency, making them compatible with the traditional financial system. This makes them a natural medium for value flow between the two systems.

In this connector role, the specific application scenarios supported by stablecoins include:

• The dual-ecosystem strategy for corporate treasury management: enterprises can handle daily operating funds within the traditional banking system while deploying part of their liquidity into DeFi protocols through stablecoins to earn returns.
• Cross-ecosystem optimization path for funds: Build an intelligent system to automatically optimize the allocation of funds between TradFi and DeFi based on the market conditions of different ecosystems.
• Compliant packaged DeFi services: Access DeFi services in a compliant manner through stablecoin service providers with regulatory licenses, meeting the access needs of institutional investors.

Aiying found in discussions with the treasury departments of several companies in the Asia-Pacific region that this “day-and-night fund management” model is being adopted by more and more enterprises— even traditional companies are beginning to realize that deploying part of their liquid funds into the DeFi space through stablecoins can create additional returns while maintaining necessary risk control.

However, building such scenarios requires overcoming several key challenges: the complexity of regulatory compliance (especially for regulated financial institutions), risk isolation mechanisms (to ensure that DeFi risks do not spread to core businesses), and simplification of user experience (to enable non-crypto professionals to use it conveniently). Successful solutions need to provide innovations across three dimensions: technology, regulation, and user experience.

Through an in-depth analysis of these three core scenarios, we can clearly see that the value creation of stablecoin has far surpassed the simple concept of “digital dollar” and is developing towards building a complex and multidimensional application ecosystem. In this direction, mere issuance capability is no longer a winning factor; instead, it requires a deep understanding of specific scenario needs, building an integrated application ecosystem that brings together various parties, and providing a comprehensive ability for a frictionless user experience.

3. Differentiated Regulatory Landscape: Forward-looking Layouts of Hong Kong and Singapore

The regulatory environment both shapes and reflects the direction of market evolution. By analyzing the regulatory strategies for stablecoins in the two major financial centers of the Asia-Pacific region—Hong Kong and Singapore—we can gain a clearer understanding of the trend of stablecoin value shifting towards scenario applications.

Hong Kong: The Evolution from Sandbox to Mature Framework

On May 21, 2024, the Hong Kong Legislative Council officially passed the “Stablecoin Issuers Ordinance Draft”, marking the transition of Hong Kong’s stablecoin regulation from the exploratory phase to a mature framework phase. The core features of this ordinance include:

• Layered regulatory framework: Design differentiated regulatory requirements for different types of stablecoins, giving regulatory priority to payment-oriented single fiat-pegged stablecoins.
• Full-chain risk control: not only focusing on the issuance stage but also covering custodianship, trading, payment processing, and the entire ecological chain.
• Scenario-oriented regulatory incentives: Providing compliance convenience and policy support for application scenarios serving the real economy.

From the policy documents of the Hong Kong Monetary Authority and industry communications, we have noted that Hong Kong’s strategic focus has clearly shifted from “attracting stablecoin issuers” to “nurturing an innovation application ecosystem based on stablecoins.” This shift is reflected in specific policies, such as providing regulatory clarity for corporate clients using stablecoins for cross-border trade settlement, offering guidance for financial institutions to conduct stablecoin custody and exchange services, and supporting the interoperability of stablecoin payments with traditional payment systems.

Hong Kong’s strategic positioning behind this strategy has its unique strategic considerations: as a gateway connecting mainland China and international markets, Hong Kong hopes to strengthen its strategic position in global offshore RMB business, Greater Bay Area cross-border financial services, and Asian international asset management center through the construction of a stablecoin application ecosystem.

Singapore: A refined risk-adjusted framework

Compared to Hong Kong, the Monetary Authority of Singapore (MAS) has adopted a more refined “risk-based” regulatory strategy. Within its framework, stablecoins are subdivided into several categories, each subject to different regulatory standards:

• Single Currency Stablecoin (SCS): A stablecoin pegged to a single fiat currency, primarily used for payment purposes, subject to the strictest reserve requirements and risk control standards.
• Non-single currency stablecoins: including stablecoins that are pegged to a basket of currencies or other assets, subject to differentiated regulatory requirements.
• Scenario-adaptive regulation: Adjusting regulatory intensity based on the usage scenarios of stablecoins (such as retail payments, wholesale payments, trading mediums, etc.)

It is worth noting that Singapore’s regulatory strategy places special emphasis on the application value of stablecoins in cross-border payments, trade finance, and capital markets. The MAS has launched several pilot projects for stablecoin applications, including Ubin+ (exploring cross-border stablecoin settlement), Guardian (tokenization and trading of sustainable financial assets), and Project Orchid (retail stablecoin payments). These projects all point to a common direction: the value of stablecoins lies not in the issuance itself, but in the application scenarios they support.

Singapore’s direction aligns with its positioning as an international trade hub and financial center, strengthening its strategic role in connecting global trade and financial flows by promoting the application of stablecoins in practical business scenarios.

Commonalities and Insights of Regulatory Trends

By comparing the regulatory strategies of Hong Kong and Singapore, we can identify several key common trends:

• From “risk prevention” to “promoting innovation”: the regulatory shift in both regions has transitioned from an initial cautious attitude to a more proactive approach in guiding innovation.
• Emphasize the value of application scenarios: all see stablecoins as financial infrastructure rather than simply financial products, focusing on their value creation in real application scenarios.
• The biased allocation of regulatory resources: giving preferential regulatory resources to stablecoin applications that serve the real economy and solve practical problems.

These regulatory trends further validate my core point: the value of the stablecoin ecosystem is shifting from the issuance phase to application scenarios. Regulatory agencies have recognized this evolution and are guiding the market in this direction through policy design.

For market participants, this regulatory landscape means that a competitive strategy focused solely on the issuance stage will face increasingly significant limitations, while those participants who can innovate application scenarios and solve practical problems within the regulatory framework will gain more policy support and market opportunities.

4. Empowering Scene Innovation in Payment Infrastructure: From Distribution to Value Creation

If the application scenario is the treasure mine of the stablecoin ecosystem, then the payment infrastructure is the necessary tool for mining these mines. As the market shifts from “who issues coins” to “who can create application scenarios,” a key question arises: what kind of infrastructure can truly empower diverse application scenarios?

Through in-depth interviews and demand analysis of dozens of global enterprise clients, Aiying found that the demand for stablecoin payment infrastructure far exceeds the simple “sending and receiving stablecoins” functionality. What enterprises truly need is a comprehensive solution that addresses five core challenges:

The Five Core Challenges of Enterprise-Level Stablecoin Payments

• Complex multi-coin and multi-channel management: International enterprises often need to handle 5-10 different fiat currencies and various stablecoins, requiring a unified interface to integrate this complexity instead of establishing independent processes for each currency.
• Opaque foreign exchange conversion costs: In cross-border transactions, hidden foreign exchange costs can often reach 2-3% or even higher. Businesses need tools to monitor and optimize these conversion costs in real time.
• Multi-layered compliance and risk control requirements: Different regions and different scales of trading face varying compliance requirements, and companies need a solution that meets strict regulations while not excessively increasing operational complexity.
• Integration barriers with existing systems: Any new payment solution must be able to seamlessly integrate with the enterprise’s existing ERP, financial management, and accounting systems; otherwise, the adoption costs will be prohibitively high.
• Lack of programmable payment capabilities: Modern enterprises require not only simple fund transfers but also advanced features such as conditional payments, multi-level revenue sharing, and event-triggered automatic payments.

In the face of these complex demands, the market is forming three distinctly different infrastructure provision models, each representing different strategic positioning and value propositions:

A deep comparison of three stablecoin payment infrastructure models

In-depth analysis of these three models shows that the “neutral platform” model has unique advantages in empowering diverse application scenarios, particularly in three key areas:

• Multifaceted ecological integration capability: No single stablecoin or payment channel can meet the demands of all scenarios. A neutral platform, by integrating multiple stablecoins, various payment channels, and diverse fiat channels, provides enterprises with maximum flexibility. This allows businesses to choose the optimal combination based on the needs of different scenarios, without being constrained by a single ecosystem.
• Cross-scenario intelligent optimization capability: the real value lies not in simply providing multiple options, but in the ability to intelligently recommend the optimal path for specific transactions. For example, a payment from Singapore to Brazil may require different optimal paths under different conditions: during period A, using USDC through a specific exchange, while period B may be more suitable for using USDT through another channel, or even reverting to traditional banking channels in certain situations. This dynamic optimization capability is the core of scenario value.
• Compliance empowerment capability: As the application of stablecoins shifts from simple transactions to broader business scenarios, the complexity of compliance requirements has significantly increased. Neutral platforms reduce the cost and complexity for enterprises to build their own compliance infrastructure by integrating various compliance tools and processes (such as KYB, transaction monitoring, suspicious activity reporting, etc.), enabling them to innovate application scenarios under strict compliance.

In the long run, we anticipate that the future stablecoin payment infrastructure will further specialize, forming a clear hierarchical structure: stablecoin issuers will focus on value stability and reserve management; neutral payment infrastructure providers will be responsible for connecting different stablecoins, optimizing payment paths, and ensuring compliance; vertical industry solutions will focus on deep applications in specific scenarios. This specialization will significantly enhance the efficiency and innovation capabilities of the entire ecosystem.

5. Future Outlook: The Evolution of the Integration of Payment and Finance

Standing in the present and looking ahead to the future evolution of stablecoin application scenarios, we can identify a clear development trajectory: transitioning from a purely payment tool to a comprehensive financial infrastructure. This evolution will unfold in three stages, each representing a qualitative change in the value creation model.

The three-stage evolution of stablecoin application scenarios

Phase One: Payment Optimization (2023-2025)

Currently, we are in the first stage of stablecoin application, where the core value proposition is to solve fundamental payment issues, especially in cross-border payment scenarios. Characteristics of this stage include:

• Increase payment speed (shorten from 3-5 days to real-time or near real-time)
• Significantly reduce costs (from an average of 7% to 0.1%-1%)
• Enhance payment transparency (real-time tracking of transaction status)
• Optimize foreign exchange processing (reduce losses caused by exchange rate fluctuations)

At this stage, stablecoins primarily serve as a medium for funds transfer, replacing or supplementing traditional payment channels. The focus of competition among market participants is on who can provide a faster, cheaper, and more reliable payment experience.

Phase 2: Financial Services Integration (2025-2027)

With the basic payment issues resolved, the application of stablecoins will enter its second stage, characterized by the deep integration of financial services and payments. This stage will see:

• Seamless integration of payment and trade finance (such as automatically providing accounts receivable financing based on payment history)
• Embedded liquidity management tools (such as smart fund pool management, optimizing idle fund returns)
• The programmability of multi-party financial collaboration (such as the collaborative automation of buyers, sellers, and financial institutions in supply chain finance)
• Real-time asset-liability management (the corporate treasury function shifts from lagging reporting to real-time management)

At this stage, stablecoins are no longer just a payment tool, but have become the infrastructure for building new financial services. The focus of competition has shifted from simple payment efficiency to who can provide more comprehensive and smarter financial solutions.

Phase Three: Financial Programming (2027 and beyond)

Ultimately, the stablecoin application will enter the third stage: financial programmability. In this stage, businesses will be able to customize complex financial processes based on business logic through APIs and smart contracts. Specific manifestations include:

• Business rules are directly translated into financial logic (e.g., sales conditions automatically converted into payment conditions).
• Dynamic optimization of financial resources (funds automatically flow between different channels and tools based on real-time conditions)
• Automation of Cross-Organizational Financial Collaboration (Programmatic Coordination of Financial Systems between Upstream and Downstream Enterprises in the Supply Chain)
• Democratization of financial innovation (companies can build exclusive financial tools and processes at a low cost)

At this stage, stablecoins will become true “programmable currencies,” where financial operations are no longer independent functions, but are deeply embedded in the core business processes of enterprises. The focus of competition will be on who can provide the most powerful and flexible financial programming capabilities.

6. The Formation of a New Division of Labor System

This three-stage evolution will promote the formation of a more specialized division of labor in the stablecoin ecosystem, mainly reflected in three aspects:

• Infrastructure Layer: Stablecoin issuers focus on maintaining coin value stability, reserve management, and regulatory compliance, providing a reliable value foundation for the entire ecosystem. Participants at this layer will face pressures of standardization and commoditization, with limited differentiation space.
• Application Platform Layer: Neutral payment infrastructure providers are responsible for connecting different stablecoins, optimizing payment paths, ensuring compliance, and providing core application functionalities. Participants at this layer will differentiate themselves through technological capabilities, user experience, and ecosystem integration capabilities.
• Scenario solution layer: Vertical industry solution providers focus on deep optimization of specific scenarios, offering highly customized solutions. Participants in this layer will differentiate themselves through a deep understanding of specific industry pain points and targeted solutions.

As this specialization deepens, we will see changes in the value distribution ratios at each layer: the profit margins at the infrastructure layer will gradually shrink, while the application platform layer and scenario solution layer will gain a larger share of the value. This trend is highly similar to the development trajectory of the internet - from early infrastructure competition, to platform competition, and then to application scenario competition.

Conclusion: Whoever can create application scenarios will hold the future of stablecoins.

The stablecoin market is undergoing a profound restructuring of value: shifting from “who issues the coin” to “who can create and amplify real-world application scenarios.” This is not merely an adjustment of business models, but a redefinition of the value creation methods for the entire industry.

Looking back at the development history of payment technology, we can identify a recurring pattern: each payment revolution goes through a process from infrastructure construction, to product standardization, and finally to the explosion of scene value. Credit cards took decades to evolve from a simple payment tool to the infrastructure for building a consumer finance ecosystem; mobile payments also underwent a long evolution from simply replacing cash to deeply integrating various life scenarios. Stablecoins are experiencing the same developmental trajectory, and we are currently at a critical turning point from standardization to the explosion of scene value.

In this new stage, the key to success is no longer about who has the largest issuance or the strongest capital strength, but rather about who can deeply understand and solve practical problems in specific scenarios. Specifically, market participants need to possess three core competencies:

• Scenario Insight Ability: The ability to identify and understand deep pain points and needs in specific fields.
• Integration and coordination ability: the ability to connect and integrate multiple resources to build a complete solution ecosystem.
• User empowerment capability: the ability to make complex technologies easy to adopt through appropriate abstraction and simplification.

For participants in the stablecoin ecosystem, this value migration signifies a shift in strategic focus: from merely pursuing scale and speed to deeply cultivating vertical scenarios and user value. Those who can establish specialized divisions of labor, create an open ecosystem, and focus on scenario innovation will stand out in this transformation reshaping global payment infrastructure.

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