Stablecoins Redefine the Future of Money in 2025

In 2025, the era of on-chain finance begins as stablecoins revolutionize traditional finance through global regulation and technological maturity.

• Latest trends and key players in the 2025 stablecoin market (USDT, USDC, etc.)
• Recent regulatory changes in the US, Europe, and South Korea and their impacts
• Core use cases such as Real-World Asset (RWA) tokenization and potential risks

The year 2025 will be recorded as a critical turning point in the very history of money beyond digital assets. This is because a “great convergence” has begun, merging global regulations, traditional finance (TradFi), and mature blockchain technology. This convergence is elevating stablecoins from mere auxiliary assets on crypto exchanges to fundamental pillars of a new tokenized financial system.

Amid these changes, the focus of discussion is no longer on ‘cryptocurrency’ but redefined as the technological evolution of the existing financial system: ‘On-chain Finance’. The competitive landscape has shifted from ‘crypto vs. banks’ to ‘on-chain finance vs. legacy finance.’

$260 Billion Market: The Current Status of Stablecoins

In 2025, the stablecoin market has undergone a qualitative transformation beyond quantitative expansion, emerging as an independent financial force.

Decoupling from Cryptocurrency: A New Growth Driver

By mid-2025, the stablecoin market capitalization surpassed approximately $260 billion. Remarkably, while the overall cryptocurrency market shrank by 18.6% in Q1 2025, the stablecoin market grew by $24.5 billion.

This indicates that stablecoins are no longer speculative auxiliary assets but function as ‘safe haven’ assets that shelter funds amid market uncertainty. Trading volume reached $27.6 trillion in 2024, surpassing the combined volume of Visa and Mastercard.

USDT vs. USDC: Intensifying Duopoly

The market remains dominated by Tether (USDT) and Circle (USDC), controlling over 90% of the market. The US Treasury bonds held by these two exceed $204 billion, surpassing the reserves of many countries.

• Tether (USDT): With a market cap of about $159 billion, it holds a commanding lead. Its deep liquidity and extensive network effects are major strengths, but opacity around reserves poses concerns for institutional investors.
• USD Coin (USDC): Second with a market cap of about $62.6 billion, it targets institutional markets with a ‘regulation-first’ strategy and transparency, narrowing the gap with USDT during uncertain times.

Niche Markets and Emerging Players

Beyond the duopoly, stablecoins with specific purposes are rapidly growing.

• PayPal USD (PYUSD): Leveraging PayPal’s vast user base to target B2B payments and remittances.
• Ripple USD (RLUSD): Gained top-tier institutional trust by selecting BNY Mellon as custodian.
• Dai (DAI): Established as an essential asset in the DeFi ecosystem with decentralization as its core.
• Ethena USDe (USDe): A ‘synthetic dollar’ using derivatives strategies, offering high yields and explosive growth.

Rules of the Game: Establishing Global Stablecoin Regulation

2025 marks the year when ‘regulatory compliance’ rather than ‘regulatory evasion’ became the core competitive advantage. Governments worldwide are adopting different regulatory strategies to lead future finance.

US Approach: Private-Led ‘Digital Dollar’ Export

The US adopted a dual strategy with the GENIUS Act and CLARITY Act, integrating private stablecoins into the regulated system while countering the Fed-led CBDC.

• GENIUS Act: Allows non-bank entities to issue stablecoins with clear rules such as 1:1 high-quality reserves, prohibition of interest payments, and AML/KYC compliance.
• CLARITY Act: Excludes regulated stablecoins from the definition of ‘securities,’ resolving legal uncertainties.

Europe’s Fortress: MiCA and Digital Sovereignty Defense

The European Union (EU) fully implemented MiCA, the world’s first comprehensive crypto asset regulation. It aims to prevent ‘digital dollarization’ and protect European monetary sovereignty. Features include strict licensing requirements and trading volume caps on non-euro stablecoins.

South Korea’s Crossroads: Clash Over ‘Won-Backed Stablecoins’

In South Korea, a power struggle is underway between politicians/industry and the central bank over introducing ‘won-backed stablecoins.’ The National Assembly is pushing issuance approval through the ‘Digital Asset Basic Act’, while big tech firms like Kakao and Naver are filing trademarks to prepare the market. The Bank of Korea maintains a cautious stance citing financial stability.

Beyond Exchanges to the Real Economy: New Uses of Stablecoins

In 2025, stablecoins are establishing themselves as financial infrastructure beyond exchanges into the real economy.

Payment Revolution: Challenging SWIFT

Overcoming inefficiencies of the existing SWIFT network, stablecoins have emerged as a powerful alternative for cross-border payments. Siemens and PayPal have demonstrated efficiency gains by adopting stablecoins in B2B payments, while payment giants like Visa and MoneyGram are integrating USDC into their networks to accelerate mainstream adoption.

RWA Revolution: The Killer App for Stablecoins

Real-World Asset (RWA) tokenization is the strongest growth driver for stablecoins. When tokenizing assets like government bonds, real estate, and private credit, stablecoins serve as the core payment medium.

The RWA market is projected to grow to $30 trillion by 2030, led by major asset managers like BlackRock (BUIDL fund) dominating the tokenized government bond market. RWA growth drives stablecoin demand, and the increased liquidity in turn fuels the RWA market, creating a powerful virtuous cycle.

When I first encountered stablecoins, I thought of them simply as ‘digital dollars’ to avoid volatility. Now, seeing them evolve into ‘yield-bearing assets’ paying US Treasury interest, I feel the very concept of money is expanding.

Shadows of a Maturing Market: Key Risk Analysis

Despite growth, significant risks remain in the stablecoin market. Which stablecoins can we trust? Is being number one enough, or are regulation and transparency more important?

• De-pegging Risk: The loss of the $1 peg threatens fundamental trust. The 2025 FDUSD incident showed that even after regulation, issuer reserve management and transparency remain critical.
• Operational and Technical Risks: Smart contract hacks and oracle manipulation remain serious threats. The risk focus is shifting from issuer ‘credit’ to platform ‘operations.’
• Macro Financial Risks: Large fund flows from bank deposits to stablecoins cause bank disintermediation, threaten emerging market currency sovereignty via digital dollarization, and raise concerns about money laundering.
• Geopolitical Risks: Stablecoins are a proxy battleground in the US-China digital currency dominance competition.

Future Technologies in On-Chain Finance

New technologies overcoming past limitations are shaping the blueprint for future financial infrastructure.

• Interoperability Innovation (CCTP): Circle’s CCTP (Cross-Chain Transfer Protocol) addresses security flaws of traditional bridges. Its ‘burn then mint’ method enables secure, instant asset transfers across blockchains, challenging SWIFT.
• Privacy Under Regulation (ZKP): Zero-Knowledge Proof (ZKP) technology proves transaction validity without revealing details, solving privacy issues for institutional investors.
• Decentralization Dilemma (MakerDAO): The regulatory era poses existential questions for decentralized protocols like MakerDAO (DAI issuer). MakerDAO is restructuring via an ’endgame’ plan to survive.

Comparison: What Makes Next-Gen Interoperability CCTP Different?

Stablecoin Usage Checklist for Investors

A minimal checklist to safely use stablecoins in the new financial order.

1. Verify Regulatory Compliance: Ensure issuers comply with major global regulations like MiCA and GENIUS Act.
2. Review Reserve Transparency: Confirm regular audit reports by global accounting firms are publicly available.
3. Asset Diversification: Reduce reliance on a single coin to mitigate de-pegging and platform risks by diversifying across multiple high-quality stablecoins.
4. Purpose Differentiation: Clearly distinguish between ‘payment’ stablecoins for fund custody and payments, and ‘yield-bearing’ stablecoins that offer higher returns but carry greater risks.

Conclusion

The 2025 stablecoin market stands at a crucial crossroads determining the future of money. All market participants must seek survival strategies within the new financial order.

• Key Summary 1: Institutional Integration Stablecoins have eliminated uncertainty through clear regulatory frameworks and emerged as core elements of the global financial system.
• Key Summary 2: Real Economy Integration Through RWA tokenization and payment innovations, stablecoins are expanding beyond crypto markets into the broader real economy.
• Key Summary 3: Coexistence of Risks and Opportunities While de-pegging and technical risks persist, interoperability (CCTP) and privacy (ZKP) technologies are unlocking new financial opportunities.

The era of on-chain finance has already begun. What opportunities will you seize amid this massive wave of change?