The New Era of Stablecoins: The Battle for Digital Dollar

In 2025, the United States passed a bill called GENIUS, which completely transformed the game rules for stablecoins, sparking an unprecedented "digital dollar battle." Similar to the ancient Warring States period, four powerful factions are vying for dominance in this emerging market.

GENIUS Act: Redefining the Rules of the Game

The full name of the GENIUS Act is the "Guiding and Establishing American Stablecoin National Innovation Act," which sets clear rules for the stablecoin industry:

• The reserve must be fully supported 1:1.
• Set a regulatory threshold of 10 billion USD
• Prohibit direct payment of interest
• Set access thresholds for large technology companies

The Struggle of the Four Major Camps

1. Compliance Honor Student Alliance (USDC)

With USDC issued by Circle as the core, it strictly adheres to regulatory requirements, earning the trust of regulators and institutional investors. However, there is a conflict of interest between Circle and its main distributor Coinbase, which may affect the long-term development of the alliance.

2. Offshore Empire (USDT)

Tether's USDT maintains a leading position in the stablecoin market thanks to its market position and flexible business strategies. In response to new legislation, Tether has adopted a dual-track strategy, serving both the global market and developing compliant products for the U.S. market. Its political background and collaboration with the TRON network provide it with additional advantages.

3. Political elite group (USD1)

USD1 is backed by strong political and capital support, including close ties with the Trump family, Binance's distribution network, investments from UAE sovereign funds, and technical support from the TRON network. This "top-down" market expansion strategy gives USD1 a unique advantage, but it may also face political risks.

4. The Counterattack of Traditional Banks

Traditional banks represented by JPMorgan have begun to launch their own digital currency solutions. Although these products have a limited audience, they have significant advantages in the institutional market, such as the ability to pay interest and direct bank backing.

Strategies of Other Participants

• Stripe: Provides infrastructure for "stablecoin as a service"
• PayPal: Attract users with high rewards
• Walmart and Amazon: Seeking to cooperate with existing stablecoin issuers under legal restrictions.
• Meta: Cautiously returning to the market, focusing on real payment scenarios.

Future Outlook

The stablecoin market may experience differentiation:

• The institutional market is dominated by a banking alliance.
• The US retail market is led by USDC
• The global emerging markets are dominated by USDT
• Specific political and sovereign trading scenarios may be dominated by USD1

The stablecoin war is not only a competition of technology and business models but also a contest of different financial philosophies and governance models. Regardless of who ultimately wins, the era of the digital dollar has arrived, and we will all witness this historic transformation.