Introduction
Since late 2023, stablecoins have entered a rapid growth trajectory, with the current market size exceeding $230 billion and over 250 million active accounts globally. Their integration with traditional payment systems and banking infrastructure underscores their transformative role in financial innovation. Major jurisdictions like the EU, Japan, Singapore, and Hong Kong have enacted regulatory frameworks, while 10+ countries announced legislative plans in 2025. Citigroup predicts the stablecoin market could reach $3.7 trillion by 2030 under optimistic scenarios.
However, persistent misconceptions hinder policy consensus on offshore/onshore RMB stablecoin development. This article clarifies six critical misunderstandings to advance informed decision-making.
Misconception 1: Equating Stablecoins with Volatile Cryptocurrencies
Functional Distinctions
- Cryptocurrency Spectrum: Includes (1) CBDCs, (2) fiat-backed stablecoins, (3) tokenized RWAs, (4) non-backed tokens (e.g., Bitcoin), and (5) meme coins.
- Stablecoin Advantages: Combine fiat currency stability with blockchain efficiency (decentralization, transparency, 24/7 settlement).
Governance Differences
| Feature | Bitcoin/ETH | USDC/USDT |
|---|---|---|
| Issuance | Decentralized | Semi-centralized |
| Value Anchor | Market demand | Asset reserves |
| Account Control | None | Freeze/Adjust capabilities |
Regulatory Insight: The EU’s MiCA classifies stablecoins as payment tools—distinct from securities-like cryptocurrencies.
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Misconception 2: Stablecoins Lack Price Stability
Historical Context
- Algorithmic Stablecoins: UST’s 2022 collapse (non-asset-backed).
- Fiat-Backed: USDC’s 2023 dip ($33B SVB exposure) recovered within days.
Enhancing Transparency
- USDT: Now undergoes quarterly audits by top-tier accounting firms.
- USDC: Monthly reserve attestations; proposes Token Capital Adequacy Framework (TCAF) exceeding Basel III standards.
Regulatory Safeguards:
- Japan/Hong Kong mandate 100% reserve backing.
- U.S. GENIUS Act requires monthly liquidity reports.
Misconception 3: Stablecoins Compete with CBDCs
Complementary Use Cases
| CBDCs | Stablecoins |
|---|---|
| Domestic retail payments | Cross-border B2B trades |
| Centralized issuance | Private-sector innovation |
Technical Synergy: Hong Kong’s Aurum project tests hybrid CBDC-stablecoin systems.
Key Insight: CBDCs focus on monetary policy, not maximizing circulation volume.
Misconception 4: Stablecoins Threaten Monetary Sovereignty
Mitigation Strategies
- Usage Limits: EU bans foreign stablecoins for domestic payments.
- Reserve Rules: GENIUS Act restricts investments to U.S. Treasuries/cash.
Monetary Policy: Gradual stablecoin adoption minimizes disruption (MiCA’s €5M/day cap).
Misconception 5: Stablecoins Hinder Currency Internationalization
RMB Globalization Levers
- CIPS: 185-country reach (3.75% global payments).
- Stablecoin Potential: $7T annual volume dwarfs Visa/Mastercard combined.
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Strategic Edge: Offshore RMB stablecoins bridge gaps left by mBridge uncertainties.
Misconception 6: Stablecoins Amplify Illicit Finance Risks
Anti-Money Laundering (AML) Advances
- Blockchain Analytics: TRM Labs froze $130M in illicit crypto in 2024.
- Travel Rule Expansion: FATF mandates VASP compliance for transfers >$1,000.
Regulatory Momentum: U.S. GENIUS Act enforces real-time transaction freezing.
FAQ Section
Q1: Can stablecoins replace national currencies?
A: No—regulators limit domestic use (e.g., EU’s foreign-stablecoin ban).
Q2: How do stablecoins improve cross-border payments?
A: They enable near-instant settlements at <$1 cost vs. 6.35% average remittance fees.
Q3: Are algorithmic stablecoins safe?
A: Not currently regulated; fiat-backed models dominate for reliability.
Conclusion
Stablecoins represent a paradigm shift in global finance—not as threats, but as tools for efficiency and inclusion. Policymakers must embrace nuanced regulation to harness their potential for monetary innovation and RMB internationalization.