Despite a temporary circuit breaker on June 5, the stock price of the Circle Internet Group, a peer-to-peer lender and issuer of the world’s second-most used stablecoin, USDC, surged by 168.5 percent to US$18 billion on its first trading day. Stablecoins are much less volatile when pegged to a currency. First rolled out in 2014 by Tether, the trading volume in stablecoins hit US$27.6 trillion in 2024, higher than those of Visa and MasterCard combined. With its decentralized model for cross-border transactions involving no third parties, stablecoins may sideline the roles of banks. However, to avoid money-laundering and foreign exchange evasion, countries and regions like the US and China’s Hong Kong region are legislating to formulate rules. As cryptocurrency remains illegal in the Chinese mainland, experts are urging China to join the market.
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