Author: Nancy, PANews

As the stablecoin market continues to expand, the fundamentals are facing many challenges upgrade. At present, from the ice-breaking cooperation between Binance and Circle, to the intensive layout of crypto giants, to the frequent financing activities and the gradual improvement of the environment, the liquidity and application scenarios of the stablecoin track are rapidly expanding, accelerating to become one of the core narratives of this cycle. one.

Binance and Circle "reunion", the leading giant accelerates the expansion of stablecoins

On December 11, Binance officially announced a strategic agreement with Circle, the issuer of USDC stablecoin Collaborate to expand USDC adoption and support the development of global digital assets and the broader financial services ecosystem. According to the agreement, Binance will deeply integrate USDC into its product line, provide trading, savings and payment services to 240 million users around the world, and incorporate USDC into the company’s reserves. Circle will provide technical support, liquidity and supporting tools to Binance.

In this regard, Binance CEO Richard Teng said that both parties will jointly promote stablecoin innovation and application scenario expansion. Circle CEO Jeremy Allaire emphasized that USDC is expected to be more widely used with the help of Binance’s rapidly developing financial super application ecosystem.

This "reconciliation of the century" shocked the encryption community, especially in the context of the two companies' once-antagonism. Looking back last year, the stablecoin BUSD jointly issued by Binance and Paxos was investigated by US regulatory agencies. This investigation forced Binance, this important business line, to withdraw from the center of the stablecoin stage. Circle is considered the "whistleblower" behind this investigation. According to Bloomberg citing people familiar with the matter, Circle reported to the New York State Department of Financial Services (NYDFS) in the fall of 2022 that Binance did not have enough reserves to support its issuance through Paxos. of BUSD tokens.

However, today's cooperation not only marks a handshake and peace between the two major competitors, but also lays a new foundation for the larger expansion of stablecoins.

In fact, leading crypto companies have made more frequent arrangements in the stable currency field during this period. For example, Binance has recently expanded the application of multiple stablecoins, including completing the integration of the stablecoin FDUSD on the Sui network and the integration of USDT on the Aptos network.

Tether has also released a number of important developments recently. For example, Tether has significantly increased the amount of USDT minted. This month, the total minted amount of USDT has reached 4 billion US dollars, and there are currently more than 100 million. The on-chain wallet holds USDT; USDT has been recognized as a virtual asset by the Abu Dhabi Global Market. At the same time, Tether has also accelerated its expansion in multiple blockchains, including USDT being launched on the TON chain and will be introduced into the Aptos network; p>

Circle is also accelerating its layout. Recently, Circle announced the launch of the cross-chain transmission protocol CCTP V2, which has shortened the settlement time from minutes to seconds. It plans to go online in early 2025 to support Ethereum, Base and Avalanche networks, and will in the future Expanding to more blockchains; at the same time, Circle also announced that USDC has announced its launch on Aptos and plans to support platforms such as Unichain.

In addition, Ripple's stablecoin RLUSD also announced that it has been approved by the New York Department of Financial Services. The stablecoin is initially only open to institutions.

These developments show that the stablecoin market is developing rapidly, especially the accelerated layout of leading companies will undoubtedly promote the penetration and application of this track in the global financial system. In addition, PANews recently also reported in the article "The EU Begins Stablecoin war: 21 issuers compete, Circle lands first, Tether supports "agent"" takes stock of the progress of the European market

The total market value of stablecoins has exceeded the US$200 billion mark, and the ecosystem is increasingly prosperous driven by investment and financing.

The stablecoin market is ushering in a milestone moment. DeFiLlama data shows that as of December 12, the total market value of stablecoins has reached a record high, exceeding the US$200 billion mark. According to the prediction of asset management company Bitwise, the stablecoin market value The market size may double next year to US$400 billion

In fact, the current role of stablecoins in the global financial system is becoming increasingly prominent, and application scenarios have become more diversified. According to the latest research report from Standard Chartered Bank, stablecoins are being used only in cryptocurrency exchanges from the early days , gradually developing into an important tool in the global financial field. Especially in emerging markets where traditional cross-border banking services are limited, stablecoins provide a fast and reliable digital dollar asset transfer solution in Brazil, Turkey, and Nigeria. , India and Indonesia, etc., 69% of respondents willStablecoins are used for currency substitution, 39% are used for payment of goods and services, and another 39% are used for cross-border payments.

Especially now with the rise of more innovative stablecoin projects and the increasingly rich ecosystem, the market demand for this tool continues to rise, and capital The influx also provides more possibilities and imagination for the further development of stablecoins. According to PANews statistics, at least 23 stablecoins announced financing in the second half of this year. These projects have received a cumulative investment of more than 1.86 billion U.S. dollars, of which Bridge’s financing amount is as high as 1.68 billion U.S. dollars, mainly because it was paid for 1.1 billion U.S. dollars in October this year. Acquired by giant Stripe.

For example, Binance Labs recently announced its investment in the Solana stablecoin trading infrastructure project Perena. It aims to solve the problem of ecological fragmentation of stablecoins through its product Numéraire and reduce the capital requirements for the issuance of new stablecoins. Platform users can use the protocol to mint stablecoins, earn tokenized real-world asset returns, and leverage a tiered collateralized debt position system to achieve customized risk-return allocations.

KAST, a stablecoin-driven financial platform, also announced the completion of a $10 million seed round of financing from India, a spin-off of investment giant Sequoia, and investment companies Peak XV and HongShan Co-leading the investment, it can support users to hold and use stablecoins through traditional payment channels, and provide credit card services that can be used in standard merchant networks, allowing users to spend their stablecoin assets at merchants that cannot support crypto payments.

Sphere, a cross-border stablecoin payment company, completed a $5 million financing led by Coinbase Ventures and Kraken Ventures. By cooperating with service providers, cross-border payments of stablecoins between enterprises can be realized, and stablecoins can be exchanged for local legal currencies in supported regions.

The continuous advancement of these innovative projects not only injects new vitality into the development of stablecoins, but also gradually expands the role of stablecoins in the global financial ecosystem.

At the same time, the regulatory environment for global stablecoins is gradually improving, and local trends provide institutional guarantees for the development of stablecoins. Hong Kong’s latest Stable Currency Bill will be submitted to the Legislative Council for first reading on December 18, proposing the supervision of fiat currency stable currency issuers.system, which marks a substantial step in the regulation of stablecoins; the Brazilian Central Bank is expected to lift the ban on stablecoin self-custody, and the regulatory attitude tends to be more open; the EU's upcoming "Cryptocurrency Asset Market Supervision Act" (MiCA) is also expected to be It has become an important milestone in global stablecoin regulation, providing more compliance guarantees for the stablecoin market; and the yet-to-be-approved Payment Stablecoin Clarity Act in the United States can provide licenses to issuers of stablecoins, Trump said. Trump’s upcoming election is believed to accelerate the introduction of this encryption bill.

In general, with the active layout of leading encryption companies and the continuous influx of capital, stablecoins are opening up more application scenarios to meet the global needs The financial market has an urgent need for convenient, safe, and efficient payment tools, thus accelerating stablecoins from the edge of encryption to the mainstream financial market. At the same time, the gradual advancement of various countries has also paved the way for the compliance and standardization of the stablecoin market.