In 1998, PayPal launched as a way to “beam” money between PalmPilots.

Now, fast forward.

Billions are being transferred across borders and on blockchains every day. Stablecoin transaction volume amounted to US $79B per day in 2024, no wires necessary.

But What Actually Are Stablecoins?

Stablecoins are digital tokens designed to hold a steady value. They’re pegged 1:1 to a fiat currency, like USD or HKD. Unlike volatile cryptocurrencies (memecoins for example), stablecoins act more like dollars wrapped in software. The result? Global money that moves with speed and stability.

How Do Stablecoins Work?

At their core, stablecoins live on blockchains, which are decentralized networks that process transactions around-the-clock with no intermediaries. Each coin is either backed by cash or crypto collateral, and some maintain their value algorithmically. Users can verify the reserves in real time. Think of it like a digital dollar that you can store yourself and use for: seamless transactions across the globe, buying your morning coffee, or put towards a mini games on “everything apps” like WhatsApp, WeChat, and Base. All performed without relying on high fees, bank hours, transfer windows, or intermediaries.

Some stablecoins, like USDC and USDT, are issued by companies that manage reserves and audit transparency. Others, like DAI, are governed by smart contracts and adjust their supply based on market demand. Apart from stablecoin governance styles, they each aim for stability at scale.

What Do Stablecoins Solve?

Stablecoins eliminate the pain points of traditional cross-border payments: high fees, slow settlements, and lack of transparency. Sending money from one country to another can take days and cost up to 10% in fees. Stablecoins, on the other hand, cost seconds and pennies. No intermediary, no currency conversion congestion, no wire delays.

The fiat-pegged coins also provide stress relief for peer-to-peer transfers, allowing freelancers or remote workers to be paid within seconds. Families can seamlessly split travel costs across multiple time zones. With apps like Morpho offering yield for stablecoins, not just storage, even savings accounts could look a little different in the near future.

Who Is Using Stablecoins?

There is a growing list of people who use stablecoins on a regular basis: Unbanked workers, remote employees, e-commerce merchants, investors, large corporations, and tech enthusiasts!

With US-based platforms like PayPal, Stripe, and Shopify integrating stablecoins to their ecosystems, it’s possible we’ll see this userbase continue to grow.

• Unbanked: Stablecoins offer mobile-first banking alternatives for people without access to bank accounts.
  

• International Families: Remittances sent between family members now amounts to ~US $100B/year
  

• Small businesses: Operating a business via blockchain enables owners to utilize instant settlements, real-time transaction data, and verifiably accurate credibility to sell physical and digital products. All of which can be streamlined with a stablecoin!
  

• Large businesses: Many types of businesses could benefit by utilizing blockchains in some way, shape, or form. Major brands can build consumer trust by holding reserves and transparently managing treasuries on-chain.
  

• Countries: With initiatives like the HKMA stablecoin issuer sandbox, Hong Kong is positioning itself at the forefront of stablecoin innovation. We’re proud to be part of this initiative with Standard Chartered and HKT focused on the issuance and advancement of licensed HKD-backed stablecoin.
  
  The goal? To bridge traditional finance and Web3 through a regulated, HKD-backed stablecoin built for real-world use.
  
  As stablecoins evolve from niche tools into critical financial infrastructure, Hong Kong’s regulatory leadership and strong partnerships could help reshape global finance and streamline cross-border payments. Evan Auyang, our group president, emphasizes during his interview with National Business Daily that regulation alone isn’t enough; education, adoption, and investment in homegrown digital asset companies will be key to long-term impact.
  

• SocialFi users: Short for “Social Finance”, SocialFi merges social media with decentralized finance. SocialFi has emerged as an innovation that rewards creators and builders for their contributions. 
  
  Imagine if each @username could hold, send, and receive money. People are already doing this!

Stablecoins vs. Visa and Mastercard

The transaction volume of stablecoins reached a total of US $27.6 trillion in 2024, clearing Visa and Mastercard’s transaction volume with under 2% of the amount of users.

Yes, you read that correctly. Stablecoins facilitated more transaction volume than Visa, Mastercard, and PayPal combined last year. Now that the GENIUS Act has passed, it has served to bring more clarity to stablecoin users and businesses in the United States. Stablecoins are having their moment, sure, but their time doesn’t seem to be ending anytime soon.

Your Local Stablecoin

In an era where money has become closer to software, stablecoins are the dollar’s digital twin. Fast, borderless, and programmable. While they won’t replace traditional finance overnight, they’re already solving real problems for real people. Real-time data is telling the story: the future of money may already be here.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, tax, or investment advice. Please do your own research and consult a professional advisor before making any investment decisions.