After the first stablecoin stock soared by 675%, the institution reminds: There are six major misunderstandings in the market

Source: 21st Century Business Herald  

Since May this year, driven by legislative progress in the U.S. and Hong Kong, China, the stablecoin sector has experienced a global surge. Citibank’s latest report predicts that, under the dual drivers of regulatory support and widespread institutional adoption, the stablecoin market could reach $3.7 trillion in an optimistic scenario by 2030.  

### **Circle, the "First Stablecoin Stock," Surges Over 675%**  

With legislative advancements and Circle’s NYSE listing fueling market sentiment, the stablecoin frenzy continues.  

- **U.S. Stocks**: On June 5, Circle, the first stablecoin company to go public, saw its stock price skyrocket. By June 21, it had surged over 675% from its IPO price of $31 to $240. Bitcoin and other crypto assets also benefited directly, with the rally still ongoing.  

- **A-Shares & H-Shares**: In contrast, the stablecoin sector in A-shares and H-shares has shown convergence. Hong Kong’s stablecoin index rose sharply before experiencing significant volatility in late May, yet it still leads major concept indices with a 59% gain over the past month, with several component stocks up over 40%. Meanwhile, A-shares saw a sector correction after multiple companies denied involvement in stablecoins around June 6.  

### **Global Giants Enter the Fray**  

Major corporations worldwide are now targeting stablecoins:  

- **Amazon & Walmart** are internally discussing launching their own stablecoins.  

- **Ant Group** plans to apply for stablecoin licenses in Hong Kong and Singapore through Ant International and Ant Digital Technologies.  

- **JD.com** announced it will issue a Hong Kong dollar-pegged stablecoin on a public blockchain. Its subsidiary, JD Blockchain Tech, was among the first participants in the Hong Kong Monetary Authority’s stablecoin regulatory sandbox in July 2024.  

- **Standard Chartered** (partnering with ANEXT Bank and Hong Kong Telecom) has also submitted an application for a stablecoin license.  

**Cost Savings Drive Adoption**  

The primary motivation for retailers is cost efficiency. Under the current payment system, merchants pay transaction fees of 1.5%–3% per transaction via platforms like Visa. Analysts estimate:  

- **Amazon** could pay $6.7–$13.4 billion annually in fees.  

- **Walmart** faces $1.8–$3.6 billion in fees.  

Switching to stablecoin payments could reduce costs to ~0.1%, saving these giants billions yearly.  

### **Six Common Misconceptions About Stablecoins**  

Stablecoins, pegged to real-world assets, are seen as a major innovation in cross-border payments. However, Guotai Haitong’s macro research team highlights six key misconceptions:  

1. **Stablecoins are absolutely stable** – Their value is relative, not absolute, subject to technical depegging risks and underlying asset volatility.  

2. **Any fiat currency can issue stablecoins at scale** – Only widely trusted fiat currencies (like the USD) can achieve dominance.  

3. **USD stablecoins weaken dollar credibility** – They actually reinforce the dollar’s global role while posing risks to weaker currencies.  

4. **USD stablecoins are a "lifesaver" for U.S. Treasuries** – They marginally ease short-term bond pressure but do not solve long-term debt issues.  

5. **USD stablecoins drastically increase money supply** – The Fed retains control over overall dollar liquidity.  

6. **Stablecoins will rapidly expand the RWA (Real World Assets) market** – RWA growth depends on asset quality, not just stablecoin adoption.  

*Disclaimer: The views expressed herein are solely those of the author and do not constitute investment advice. This platform makes no guarantees regarding the accuracy, completeness, or timeliness of the information and assumes no liability for losses resulting from reliance on this content.*