CITIC Securities: Promoting stablecoin compliance or assisting in the reconstruction of cross-border payment system

According to a research report by CITIC Securities, the original intention of creating stablecoins was to build a trading bridge between fiat currencies and digital assets. However, traditional financial market risks and frequent on chain risks have led to the risk of stablecoins becoming disconnected from fiat currencies, and the lack of transparency in the issuer's reserve assets also poses significant risks. In view of this, global regulatory agencies are accelerating the legislative process for stablecoins, such as MiCA in Europe, the stablecoin regulations in Hong Kong, and the GENIUS Act in the United States, all of which focus on establishing clear regulatory frameworks for stablecoin reserve assets and issuance mechanisms to protect consumer rights. Regulatory requirements clearly require stablecoin issuers to hold sufficient high-quality and highly liquid assets to cope with liquidity risks, and currently mainstream stablecoin issuers generally use short-term US bonds as reserve assets. From a global perspective, the process of stablecoin compliance is expected to promote the restructuring of the global payment system. Compared to traditional cross-border payment methods, stablecoin payments have significant advantages in terms of cost and efficiency. Given that the stable currency anchoring the US dollar currently dominates the market, if the scale of the stable currency continues to expand in the future, it is expected that the incremental funds will help to meet the demand for short-term US treasury bond bonds, but will not significantly help the long-term US bond market. However, the growth of demand for stablecoins still depends on the expansion of their application scenarios. Merely relying on compliance legal frameworks is not enough to directly drive demand growth. The key lies in the substantial implementation of stablecoin application scenarios and the comprehensive construction of the ecosystem.