One picture to understand: What are the sources of income for stablecoins? For the brothers. Let's tell a cold joke, Hong Kong dollars are stablecoins. What is stablecoin? Stablecoins are not new, as a branch of cryptocurrency, their characteristic is having an anchor. For example, the stablecoin bill in the United States requires anchoring to US dollars, US bonds, etc., where one yuan of cryptocurrency corresponds to one yuan of US dollars, US bonds, etc. On May 20th, the US Senate voted to pass the stablecoin Uniform Standards Assurance Act (GENIUS), marking an important step in the regulatory framework for stablecoins in the United States. On May 21st, the Legislative Council of Hong Kong, China also passed the "Stablecoins Bill", which means that Hong Kong, China has officially established a licensing system for stablecoin issuers. However, the US bill still requires a lengthy process to take effect, while Hong Kong has already taken effect. Stablecoins do not go from heaven to earth like Bitcoin. Behind every dollar issued, there is a dollar worth of US dollars or US bonds, and the impact on the financial market is not too significant. That's why they are called stablecoins. If you peel off the colorful set of stable currency, you will find that it is essentially the balance of Alipay. One yuan can be used when one yuan is deposited in the balance of Alipay. There is strong supervision behind it, so you don't have to worry about sudden zeroing (but in fact there will be zeroing). Explore a few questions: Question 1: Why did the United States launch stablecoins? Many cryptocurrency institutions have introduced stable currencies, but Trump is the first to adopt a bill. The main reason behind it is US Treasury bonds. The stablecoin bill requires anchoring to US dollars or US bonds, which means that companies issuing stablecoins either deposit US dollars or buy US bonds, and companies issuing stablecoins buy US bonds without interest. That gives the US Treasury a wonderful way to resolve it. If enough stablecoins are issued, then the current US Treasury bonds may not be enough (of course, the reality is cruel, as mentioned later), and US Treasury bonds will be resolved quietly. Question 2: What is the difference between stablecoins and digital fiat currencies? Digital fiat currency is issued by the central bank or authorized institutions of the country, such as digital RMB, which is legally protected, rigidly redeemed, and almost risk-free. Stablecoins are issued by companies, and despite regulatory requirements, there are risks involved. Some small and medium-sized companies may face significant risks. There are definitely many people who take advantage of regulatory loopholes to escape. Question 3: What is the difference between stable currency and non bank payment such as Alipay? Technically, stablecoins are generally encrypted digital currencies, and according to different laws, there may be technical requirements such as blockchain. However, stablecoins and non bank payments (formerly known as third-party payments) are essentially the same thing. For example, when Trump currency anchors the US dollar, it is no different from the balance of Alipay that anchors the RMB. As for blockchain technology, it is all virtual. The principle of substance over form. Question 4: What impact does stablecoin have on the international status of the US dollar? On the surface, stablecoins have expanded the international status of the US dollar. For example, Russian companies have been sanctioned and are unable to use Swift for transactions. However, by using stablecoins from small and medium-sized enterprises, transactions can be conducted, which is much more stable than Bitcoin. Expanded the international influence of the US dollar. Even the internationalization of the renminbi will have an impact. In fact, the already circulating stablecoins have had a certain impact on countries with unstable currencies. At present, stable currency is mainly circulated in high inflation countries such as Türkiye, Argentina and Brazil. However, the true purchasing power of the US dollar is influenced by US debt and the US military. In the long run, when US Treasury bonds soar to an outrageous level, the credit of the US dollar will face a decline. As for the internationalization of the Chinese yuan, contrary to traditional understanding, it is mainly achieved through currency exchange agreements, essentially through bartering. Question 5: What impact does stablecoin have on cross-border transactions? The impact may be significant, as traditional regulatory models cannot restrict stablecoin trading. The reason why Hong Kong opened up its "gateway" in the first place should also be to actively respond to changes in the international financial market. Question 6: What impact does stablecoin have on digital RMB? The promotion progress of digital RMB belongs to a small and fast pace, and it can be understood as an officially issued stablecoin. After the emergence of stablecoins, the promotion of digital renminbi may accelerate. Question 7: What are the risks of stablecoins? At present, there are two risks that come to mind. One is the risk of default. Many stablecoin companies may be established with the purpose of making money and running away, using various means to attract user investment, and then cashing out and leaving through regulatory loopholes; Another is the risk of money laundering. Question 8: Will the stable currency land in Chinese Mainland? Star sky gentleman thinks that it is difficult for stable currency to land in Chinese Mainland. One is that non bank payments have essentially achieved the real-time trading function of stablecoins, and there is no corresponding demand in the market; Secondly, China is promoting the digital renminbi, which can also serve as a stablecoin; Thirdly, China has stricter risk control measures for its financial markets and is more cautious about the potential risks associated with stablecoins. ————Poetry and Starry Sky!