New Order of Stablecoins: Reconstruction of Dollar Hegemony

The geographical proximity of Yiwu and Hangzhou not only facilitates the circulation of mineral water but also promotes the trading of stablecoins. From the underground economies of Africa and Asia to the Indian expatriate communities in the Indian Ocean, a new economic curtain spanning the Third World has already formed.

Behind this curtain lies the fortress of the traditional financial system – including large commercial banks, investment banks, non-bank financial institutions, central banks of various countries, and tech giants. Although these financial giants still dominate the traditional financial sector, they have inevitably been influenced and impacted by stablecoins, especially USDT.

Tether's Diversification Strategy

A recent report on stablecoins for 2025 released by a data platform shows that USDT and its strategic partners dominate in the areas of payment stablecoins, cross-border settlements, and personal remittances. Only USDC and its payment network can barely compete with it.

However, the "kingdom" of USDT is not solid as a rock. On one hand, a certain trading platform dominates its ecosystem; on the other hand, Tether itself is constantly seeking new development directions. Meanwhile, USDC is encroaching on market share through profit-sharing with exchanges, while the emerging USDe is obtaining hedging gains by binding with exchanges.

From the gold dollar to the oil dollar, and now to the stablecoin dollar, the form of dollar hegemony is constantly evolving. In 2024, as the net profit of a certain stablecoin issuer surpassed that of BlackRock, stablecoins officially emerged from the previous shadow and re-entered the sight of various countries. This is not only because stablecoins can bring considerable profits, but also because stablecoins have become important buyers of U.S. Treasury bonds, even surpassing some sovereign nations.

Behind the golden combination of the US dollar and US Treasury bonds is America's military hegemony. Stablecoins are becoming a new form of the dollar, or at least an important supplement to the dollar, by changing the sales pattern of short-term bonds.

However, Tether's strategy is not limited to challenging or compromising the existing order. It is expanding into multiple areas such as Bitcoin mining, cryptocurrency management, and solar nodes in Africa, and is entering the institutional settlement market through a certain settlement platform. In addition, Tether is also keen on promoting the development of Bitcoin, just like a former executive from a certain social media.

Tether is not only diversified in its business but also relentless in technological innovation. Recently, Tether released an open-source and free password manager, which, although not directly related to its core business, demonstrates the company's technical strength and innovative spirit.

Tether's Unique Sentiment Towards Bitcoin

Tether's investment in the Bitcoin ecosystem and the construction of its payment network are key to its strategy. The former reflects recognition of Bitcoin's long-term value, while the latter aims to reduce reliance on any particular trading platform.

It is worth mentioning that the relationship between Tether and the trading platform is also changing. The latter has attempted to launch various stablecoins to reduce its reliance on USDT, while Tether has been continuously trying out new blockchain networks. Nevertheless, the two still find it difficult to completely separate. For Tether, Bitcoin is its true "love," while the partnership with the trading platform seems more like a "stopgap measure."

Tether's investment in Bitcoin has remained highly consistent. In the early days, USDT was issued on a certain Bitcoin sidechain, although it ultimately did not succeed. Recently, Tether has deployed USDT on another Bitcoin sidechain network, and the settlement platforms it supports regard BTC and USDT as core assets.

This obsession with Bitcoin is difficult to simply explain as a mere assertion of "orthodoxy"; it resembles a sincere passion. Although the prospects of certain Bitcoin sidechains are not widely optimistic, Tether seems to firmly believe in Bitcoin's potential as "digital gold." As for the settlement platforms it supports, while there is market potential, the competitive pressure they face is quite significant, far from the unique position of USDT in the payment field.

The Battle for Orthodoxy: The Struggle of New and Old Forces

The decline of any empire often stems from internal division, and the interest alliance of USDT is no exception.

Within Tether, it remains to be seen which settlement platform and another stablecoin platform will become Tether's successor. On the surface, the former seems to have an advantage, but the latter's relationship with USDT is also quite subtle, appearing as a potential option for Tether outside of a certain settlement platform. This "succession battle" may be very exciting in the future.

Of course, this is just an internal dispute within the Tether ecosystem. Externally, USDC is leading the stablecoin movement towards compliance. With a certain bill clarifying compliance details, the issuer of USDC has achieved on-chain interoperability through its cross-chain transmission protocol and adopted international standards to enter the global payment network, realizing seamless integration between on-chain and off-chain.

If USDC represents the "orthodox faction", then USDG can be seen as the "alliance faction". As the issuer of the former stablecoin of a certain trading platform, it is responsible for the issuance of USDG, and its clearing network directly corresponds to the related networks of USDC and Tether. The ecological alliance of USDG includes several well-known exchanges, a large Bitcoin holding institution, and the currently most popular brokerage.

Currently, the stablecoin camp is mainly divided into four major camps:

1. USDT camp: Composed of a certain trading platform, a certain public chain, and its related companies.
2. USDC camp: includes a certain exchange, USDC issuer, and another large trading platform.
3. USDG Camp: Composed of its issuer and multiple exchanges and investment institutions.
4. USDe camp: including its issuer, a well-known trader, and a certain trading platform.

These camps cover various fields such as payment, settlement, and pricing. However, the mechanisms that maintain the operation of these alliances are not always aboveboard. Many times, they adopt strategies similar to "vote-buying," a strategy that first appeared in the governance of a certain DeFi project and has since been widely applied in other projects.

These strategies do not directly lobby stakeholders but attract more funds through carefully designed mechanisms to gain economies of scale and obtain more revenue from certain projects to distribute to their users.

A more direct approach is the model of a certain staking platform, which allows ordinary users to participate in staking without having to set up their own nodes; they only need to pay a fee. From this perspective, the platform has effectively become the largest "bribery platform" for a certain public blockchain.

USDC has also adopted a similar strategy, successfully rising to become the second largest stablecoin after USDT by sharing 60% of its profits with certain exchanges. This strong binding relationship has shown its advantages in times of crisis, for example, during a certain bank crisis, although USDC briefly de-pegged to $0.87, it was still not abandoned by its main partners.

The strategy of USDe is more aggressive, and its investors almost include all major centralized exchanges. These exchanges obtain governance tokens of USDe in exchange for hedging arbitrage opportunities and support for coin price stability.

In the face of new trends in institutional settlement, the alliance of USDT seems to show some cracks. Not only is it lagging behind USDC in the institutional market layout, but even USDe has begun to collaborate with large asset management companies and fintech firms to launch new stablecoin products and institution-specific chains.

USDG has adopted a more aggressive strategy, promising to distribute 97% of its issuance revenue to ecosystem participants, attempting to secure the third position behind USDT and USDC. The final outcome of this stablecoin battle awaits market verification.

Conclusion

The development of stablecoins has already exceeded ten years. It is worth noting that the emergence of the Renminbi (offshore) stablecoin is not later than that of USDT, and its operational scale has at one point been comparable. For example, a certain trading platform once directly supported Renminbi pricing, just like some exchanges currently support US dollar pricing.

I hope this round of stablecoin competition can change the market's monopoly situation and avoid the repeat of the loss of pricing power in Bitcoin's computing power.

After all, water may flow away and come back, but once funds flow away, it is very difficult to return.