1.1 The Evolution of Stablecoins: From Trading Tools to Financial Infrastructure

Stablecoins have evolved from simple value-pegged tokens supporting blockchain transactions into a foundational component of the global financial system. Once used merely as transactional instruments, they now underpin cross-border payments, value storage, and the emerging machine economy—forming a versatile digital monetary framework.

Global Market Dynamics

• As of mid-2025, the global stablecoin market cap has reached $246 billion

• USD-backed stablecoins (USDT, USDC) dominate over 90% of global trading volume

• Stablecoins are becoming the de facto currency for M2M (machine-to-machine) and autonomous AI system transactions

Regulatory Developments

• United States: The Senate passed the Stablecoin Act, integrating stablecoins into traditional financial frameworks and facilitating institutional capital inflows that may reshape DeFi liquidity models

• Singapore: Under the Payment Services Act, stablecoin transfers are regulated; projects like XSGD exemplify its controlled innovation strategy

• European Union: The MiCA framework categorizes stablecoins by type and mandates full reserve transparency, building a unified regulatory structure for digital assets

• Offshore RMB: Rapid adoption in Southeast Asia and Africa for trade settlement, especially in enabling RWA ecosystems and cross-border B2B logistics