Cobo Stable Weekly NO.8: As Hong Kong Legalizes Stablecoins, Global Push to Hedge U.S. Dollar Power Intensifies
Stablecoins Rise, Dollar Shields Up
Global payments are undergoing a revolution, and stablecoins are at the heart of this transformation. They're not just reshaping how money moves across borders—they're completely redefining what payments can be. Cobo stands at the cutting edge of this shift, building the full-stack infrastructure that powers next-gen stablecoin solutions: from secure wallet tech to risk control and compliance and yield-generating options that actually make your money work.
Go with Cobo, and you can zero in on building cool stuff and growing your user base, while surfing the stablecoin revolution without the infrastructure headaches.
Stablecoin regulation is no longer the 'elephant in the room.'
This week, both the US GENIUS Act and Hong Kong's Stablecoin Bill took critical steps forward, clearly signaling that the era of compliant stablecoins is rapidly approaching.
Hong Kong has taken the lead in implementing a licensing system, opening policy channels for application scenarios such as B2B payments and cross-border remittances. Meanwhile, AI-driven payment systems are viewing stablecoins as next-generation infrastructure, forming a key component in building an automated economy.
Before today’s main topics, a quick update: Circle has recognized Cobo as a key partner in building stablecoin infrastructure in Asia.
As a USDC technical node, Cobo enables compliant USD settlement via bank sub-accounts and offers an all-in-one solution—MPC wallets, custody, compliance, smart pricing, and fast transfers—to help institutions securely integrate USDC across payments and asset management.
Market Overview and Growth Highlights
Stablecoin Total Market Cap Reaches $245.444B
The total stablecoin market capitalization has reached $245.444 billion, reflecting a week-over-week growth of $2.9 billion. In terms of market share, USDT continues to dominate with a 62.26% share, followed by USDC, which holds the second position with a market cap of $60.724 billion (24.74% share).
Growth Highlights
Top 3 Fastest-Growing Stablecoins (Weekly):
Ethena USDe(USDe):
Growth: $225.42M (+4.7%)OpenDollar USDO(USDO):
Growth: $8.88M (+4.22%)EURC (EURC):
Growth:$8.8M(+3.83%)
Blockchain Network Distribution
Top 3 Networks by Stablecoin Market Cap:
Ethereum: $122.58B
Tron: $76.3B
Solana: $11.48B
Top 3 Fastest-Growing Networks (Weekly):
Hedera: Growth: +38.78% (USDC dominance: 98.41%)
Sui: Growth: +21.44% (USDC dominance: 75.43%)
Polygon: Growth: +8.71% (USDC dominance: 47.02%)
Data Source: defillama
Stablecoin Regulatory Race Heats Up: Hong Kong Takes the Lead, RMB Stablecoins Gain Legal Status
The US Senate passed a motion to debate the GENIUS Act with a 69-31 vote, marking the advancement of the country's first federal stablecoin regulatory framework to the amendment stage. While the bill is not yet finalized, it sends a clear signal: stablecoin regulation is becoming a priority in global monetary governance.
Just a day earlier, Hong Kong's Legislative Council passed the Stablecoin Bill in its third reading, becoming one of the first regions globally to complete dedicated legislation for fiat-backed stablecoins. The bill establishes a clear licensing system, requiring anyone issuing fiat stablecoins or stablecoins pegged to the Hong Kong dollar to apply for a license from the Hong Kong Monetary Authority (HKMA).
Core regulatory requirements include:
1:1 high-liquidity reserve backing
Predictable par value redemption mechanisms
Anti-money laundering and risk control measures
Information disclosure and audit obligations
The bill clearly states that only stablecoins issued by licensed issuers may be sold to retail investors, and all marketing activities are also regulated.
Compared to the US, which is still in the legislative process, Hong Kong has not only completed its legislation first but also demonstrated its unique strategic positioning in the global stablecoin regulatory landscape by including RMB stablecoins. One of the first three institutions entering the regulatory sandbox is JD Technology's blockchain division, indicating Chinese tech companies are actively exploring cross-border payment pilots for digital RMB.
This not only helps Hong Kong further consolidate its position as an "offshore RMB center" but also injects diverse competitive forces into the global stablecoin ecosystem, breaking the dominance of USD stablecoins. Currently, USD stablecoins have become a US fiscal tool, while the institutionalized exploration of RMB stablecoins provides a new compliant path for "de-dollarization.
Hong Kong's Stablecoin Bill lays the foundation for:
Enhanced market confidence: Clear regulatory frameworks attract quality projects and institutional capital
Technological innovation: Providing implementation grounds for stablecoins in B2B payments and cross-border remittances
Ecosystem synergy: Supporting policies for OTC trading, custody services, and family offices will follow
In the next phase, the Hong Kong government will conduct further legislative consultations on OTC trading and custody services, and issue a second policy statement on virtual asset development, strengthening its systematic layout as Asia's digital asset hub.
While the US has yet to implement federal stablecoin regulation, Hong Kong has seized the initiative with rapid legislation and institutional innovation, becoming a pioneer in the global stablecoin governance race—especially in legalizing RMB stablecoins, setting new standards globally.
🎯Stablecoins: The Reset Button for Dollar Hegemony
The GENIUS Act that's been making its way through Congress lately? On the surface, it's about stablecoin regulation, but dig deeper and you'll find America's digital-age dollar expansion strategy. The bill demands stablecoin issuers maintain 100% reserves in USD cash or short-term Treasuries, with regular transparency disclosures. The genius (pun intended) is in the mechanics: for every $1 of stablecoins issued, an equivalent amount of US debt gets locked up, effectively transforming stablecoin growth into Treasury demand.
Standard Chartered is forecasting stablecoin market cap to hit a staggering $2 trillion by 2028. This "digital perpetual motion machine" is injecting structural support into the Treasury market just as traditional holders like China and Japan are scaling back. Tether, the biggest stablecoin issuer on the block, now holds Treasury positions approaching Germany's holdings. Their partnership with primary dealer Cantor Fitzgerald gives them serious liquidity advantages when markets go sideways. Remember that $7 billion redemption wave in 2022? Tether handled it without breaking a sweat, showing just how resilient their system has become.
Meanwhile, 30-year Treasury yields just broke 5% for the first time since 2007 – a pretty clear signal that markets are sweating about America's fiscal situation. Bitcoin smashing through $100K shows money flowing into non-traditional safe havens. Stablecoins sit at this fascinating intersection, becoming the key tools for dollar digitization penetration.
By tethering stablecoins to Treasury bonds, the US has found a way to extend dollar dominance digitally without directly expanding their balance sheet. It's a lowkey but incredibly effective strategy that's quietly reshaping the global financial landscape.
🎯Global Stablecoin Race Enters Sprint Phase as Dollar Digitization Becomes Reality
Just as US stablecoin legislation accelerates, the global stablecoin landscape is undergoing dramatic changes. The United States, Europe, and Asia are making synchronized moves, signaling that stablecoins are evolving from marginal players in crypto markets to core variables in the restructuring of the global monetary system.
For the United States, stablecoins are no longer just payment innovation tools, but extensions of dollar hegemony. Former CFTC Chairman Chris Giancarlo candidly states that 95% of legislative motivation stems from increasing Treasury demand, not "regulatory allocation." Once stablecoins gain federal legitimacy, America may deploy a "digital dollar" through market pathways rather than via the central bank, using stablecoins to reorganize the global dollar distribution system.
Other regions are responding rapidly:
In Europe, Société Générale (SG Forge) will issue a USD stablecoin on Ethereum, incorporating it into the regulatory framework through an EU e-money license—marking the arrival of "regulated dollar stablecoins" in Europe.
Hong Kong is seizing the Asian high ground through legislation. The HKMA's stablecoin licensing regulations have been approved, with applications expected to begin by year-end, providing global stablecoin issuers with a compliant channel to Asian markets.
Emerging markets are already forming practical dependencies. Guatemala processes US remittances through USDC, requiring only a phone number and a $0.99 fee, bypassing banking systems to directly solve financial inclusion and high-cost issues.
This is a multi-faceted transformation: financial regulatory races, monetary sovereignty defense, bank role restructuring, payment network replacement, and even rebalancing of macroeconomic policy space—all reorganizing around "stablecoins," once merely a crypto-world tool.
Facing this trend, central banks are realizing that merely blocking access cannot resist stablecoins' network effects; they must actively build competitive local alternatives. Examples include South Africa's ZARP and Nigeria's cNGN local stablecoins, which are being used to reassert monetary sovereignty and payment autonomy.
🎯What Does the GENIUS Act Mean for DeFi-Native Stablecoins?
So the GENIUS Act just sailed through the Senate with a massive vote margin, and it feels like we're entering the endgame for stablecoin regulation in the US. Federal licensing is shaping up to be the new barrier to entry for stablecoin issuers. USDC, which has been skating by on state-level money transmitter licenses this whole time, is now facing some serious adaptation pressure.
Circle's been scrambling to protect their moat in this new landscape. On one front, they're leaning hard on their Cross-Chain Transfer Protocol (CCTP) to keep cross-chain flows humming along, with annualized transaction volume hitting a hefty $40-50 billion. This gives them a stable revenue stream while expanding USDC circulation and reserves. They've also just launched their CPN mainnet, targeting high-frequency cross-border B2B payments by doing on-chain settlement that completely bypasses SWIFT and traditional banking rails. It's a bold push to transform USDC into a legitimate settlement network.
But here's the million-dollar question: will all this tech maneuvering actually hold up against the regulatory steamroller? The market's likely to favor fully-licensed financial institutions going forward, which could turn USDC's "semi-compliant" status from an asset into a straight-up liability.
Meanwhile, Circle's hedging their bets on the capital front too. They're exploring an IPO (targeting a cool $5 billion valuation) and potential M&A deals. Word is they've been in talks with Ripple, Coinbase, and others, trying to leverage external resources to boost their competitive edge and prepare for whatever policy curveballs are coming their way.
🎯Google's 'Checkout on Your Behalf' Leads AI Payment Revolution, Stablecoins Poised as Core Infrastructure
At this year's I/O conference, Google unveiled its 'Checkout on Your Behalf' feature: users can complete purchases without leaving search results - with just one confirmation, AI handles the entire payment process. In the future, it could even automatically compare prices, select products, pay, and arrange delivery. AI is no longer just a tool, but an 'agent' that can actively make decisions and execute economic behaviors.
Google isn't the only player in this space. OpenAI, Visa, PayPal, and other tech and financial giants are vying for control of AI agent payments.
However, existing payment systems designed for humans don't match the AI requirement for 'instant settlement, automatic clearing, and native API access.' Stablecoins possess all these qualities: no bank account needed, on-chain settlement, and efficient transparency.
Stripe's acquisition of Bridge aims to give developers the ability to 'open stablecoin accounts and transfer globally in one minute'; while A16Z recently led investment in Catena Labs, headed by Circle's co-founder, which is building a network enabling AI agents to make stablecoin payments at machine speed, solving the delays and high costs of traditional payments.
But completing the AI Agent business loop still requires solving challenges in identity authentication, payment system friction, and the lack of micropayment architecture. Whoever clears this path first will likely control the payment landscape for the next decade. And stablecoins will be the underlying engine of this new track.
New Launches
👀 Circle has officially launched its Circle Payment Network (CPN) mainnet, enabling real-time settlements with USD Coin (USDC) to streamline cross-border transactions, bypassing traditional banking systems. This is a big step forward for stablecoins in real-world payment applications. The CPN offers financial institutions, payment providers, and businesses a direct payment channel, cutting out traditional bank intermediaries. This move is poised to accelerate the mainstream adoption of USDC in cross-border payments, signaling a broader trend of stablecoins transforming the payment landscape.
👀Crypto exchange Bybit is shaking things up, now letting users dive into global stock trading directly with USDT. This new feature, part of their Gold & Forex (MT5) offerings, means you can trade 78 popular stocks like Apple, Tesla, and Nvidia—via Contracts for Difference (CFDs)—without ever leaving the crypto ecosystem or needing fiat. It's all about one account and one USDT wallet for a diverse range of assets including cryptocurrencies, stocks, gold, oil, indices, and forex. This move seriously blurs the lines between crypto and traditional financial markets, significantly lowering the barrier for stablecoin holders to access global equities. This reflects a broader trend of stablecoins expanding their utility into wider financial applications.
👀StraitsX has rolled out its Singapore Dollar-backed stablecoin, XSGD, on the XRP Ledger, tapping into the growing need for regulated, multi-chain stablecoins for cross-border payments. Fully backed by reserves in DBS Bank and Standard Chartered Bank, XSGD is already live on several other blockchains. This launch is a neat indicator of the expanding stablecoin universe, where non-USD stablecoins are gaining steam. Bringing XSGD to the XRP Ledger significantly diversifies Asia's stablecoin scene, aiming to slash costs and boost efficiency in international transactions.
Capital Moves
💰Catena Labs just snagged $18 million in seed funding, led by none other than A16Z, to build out a financial superhighway for AI agents. Helmed by Circle (USDC) co-founder Sean Neville and a team with heavy hitters from Meta, Google, and Jump Crypto, they're tackling how AI agents can transact globally at machine speed using stablecoins, with near-instant, super-low-fee payments, plus enterprise-grade ID and compliance baked in. The vision here is to let AI agents autonomously pay for services or settle transactions for AI-generated content, ditching those clunky 3-day ACH waits and hefty card fees. This could be a big step in stablecoins becoming the foundational financial plumbing for the burgeoning AI-driven digital economy.
💰 USDC issuer Circle considering IPO or $5 billion sale to Ripple, Coinbase
Regulation & Compliance
🏛️Société Générale's crypto division, SG Forge, is gearing up to launch a US dollar stablecoin on Ethereum, potentially making it the first major global banking group to issue such a public digital dollar. This move unfolds as the US is notably accelerating its regulatory framework for stablecoins, with SG Forge planning to leverage its EU e-money license, thus bringing a USD product under European regulatory oversight. The timing is particularly sharp, following a significant procedural vote on the "GENIUS Act" in the US Senate on May 19th. This development shows major financial institutions worldwide are actively positioning themselves in the burgeoning digital dollar space, reflecting both commercial ambitions and the strategic implications of USD stablecoins in the future of finance.
🏛️Hong Kong just greenlit a new bill to establish a licensing system for fiat-backed stablecoin issuers, with firms likely able to apply to the Hong Kong Monetary Authority for permits before this year is out. Legislative Council member Johnny Ng took to X, emphasizing that these Hong Kong stablecoins will be fiat-backed and inviting global players to apply. This move aligns Hong Kong with other major jurisdictions like the EU and US that are also framing up stablecoin rules, a process Hong Kong initiated back in 2023. It's a significant step, as the stablecoin space heats up and TradFi giants eye the arena—BitGo's Ben Reynolds even noted at Consensus 2025 that big banks are wary of digital dollars nabbing market share—potentially boosting Asia's stablecoin market and cementing Hong Kong's rep as a financial hub with clearer crypto guardrails.
Big Picture
🔮Stablecoins are nearing a critical inflection point. Anchorage Digital’s Sergio Mello predicts a surge in digital asset growth through 2027, driven by expected regulatory clarity by 2025–26. Once seen as speculative tools, stablecoins are now viewed as core financial infrastructure — with Mastercard enabling payments and Worldpay clients using them for real-time treasury. Former CFTC Chair Chris Giancarlo notes that U.S. stablecoin legislation is less about crypto and more about boosting demand for Treasuries, reinforcing the dollar’s dominance. Institutional adoption is accelerating, and even smaller banks are entering the space for cheaper deposits and strategic leverage.
🔮 The Global Dollar Alliance's USDG stablecoin is attracting significant interest from banks and traditional financial institutions, according to founding member Kraken. With over 25 partners like Robinhood and Galaxy already on board and aiming for 1,000, the alliance offers members a share of USDG's reserve asset yields. Launched last November, USDG's innovative "true alliance" model and revenue-sharing are poised to challenge established players like Tether and Circle. This approach, featuring decentralized community governance and profit sharing, is particularly appealing in international markets lacking easy USD access. Ultimately, USDG's rise signals a broader trend of stablecoins evolving into global payment and yield instruments, accelerating their integration into the global financial system.
Market Adoption
🌱Guatemala's largest bank, Banco Industrial, is now teaming up with SukuPay to let customers receive remittances from the US via a stablecoin channel for a mere $0.99 flat fee. Built on Polygon and using USDC, SukuPay allows recipients to get their funds directly in Banco Industrial's Zigi mobile app with just a phone number—no crypto wallet needed. This is a pretty big deal for Guatemala, where remittances make up nearly 20% of GDP and banking penetration is low. More broadly, this collaboration marks a significant "first deep integration of a crypto-native protocol with a top-tier retail bank in Latin America," showcasing how blockchain can tackle real-world financial needs in developing nations.
🌱Ripple is making more moves in the UAE, signing up Zand Bank and Mamo to use its blockchain-based cross-border payment platform. This expansion in the Middle East follows Ripple securing a key license from the Dubai Financial Services Authority (DFSA) earlier this year, allowing it to manage global payments for banks and fintechs. Ripple Payments now has a footprint in over 90 markets, having processed more than $70 billion in transactions worldwide, occasionally using XRP as a bridge asset. This continued push, especially in vital emerging markets, highlights Ripple's ability to grow even with regulatory headwinds.