Coinbase Launches Advertising Campaign to Promote Cryptocurrency as a Cheaper Remittance Method for US Voters
Coinbase, the popular cryptocurrency exchange, has launched an advertising campaign targeting US voters to promote cryptocurrency as a cheaper way to send money abroad. The Chief Policy Officer of Coinbase stated that the campaign aims to remind voters and potential customers that using cryptocurrency can facilitate overseas transactions at a lower cost and with greater convenience. Many households believe that the traditional financial system is not suitable for them, and cryptocurrency has become a topic of discussion within families. Products like USDC transfers and Coinbase Wallet are popular because they offer cheaper and more convenient options. This reflects the core of economic freedom and is a reason why many people are turning to cryptocurrency.
Significant Developments in the Stablecoin Market
Aiying has recently observed several phenomena and data related to the stablecoin market over the past two weeks:
1. Surge in Stablecoin Transfers
According to data from Token Terminal, the monthly volume of stablecoin transfers has increased tenfold over the past four years, from $100 billion per month to $1 trillion. As of June 20, 2024, the total trading volume in the entire cryptocurrency market was $74.391 billion, with stablecoins accounting for 60.13%, or approximately $44.71 billion. Among them, USDT (Tether) is the most widely used stablecoin, with a market value of $112.24 billion, accounting for 69.5% of the total value of all stablecoins. On June 20, the trading volume of USDT reached $34.84 billion, accounting for 46.85% of the total daily trading volume.
2. Major Investment Banks and Financial Institutions Promoting Stablecoins
– Asset Tokenization by Major Investment Banks: Some financial giants have started tokenizing assets, indicating their optimism for the future of stablecoins. For example, BlackRock, the world’s largest asset management company, with $10.5 trillion in assets under management, has launched the BUIDL fund, a tokenized fund primarily composed of US government bonds, which currently has a size of over $460 million and is one of the largest tokenized funds on public blockchains.
– Franklin Templeton’s FOBXX Fund: Franklin Templeton has also tokenized its FOBXX fund, which manages $346 million in assets. They recently announced the use of the USDC stablecoin as a channel for buying and selling fund shares, enabling investors to transact with USDC around the clock.
– Fintech Companies Promoting Stablecoin Payments: Fintech companies are actively promoting stablecoin payments. PayPal has launched its own stablecoin, PayPal USD (PYUSD), which has a market value of over $400 million and is already being used on multiple public blockchains. PYUSD has been integrated into the decentralized finance (DeFi) ecosystem, including decentralized exchanges and lending platforms. PayPal states that PYUSD aims to reduce friction in virtual payments, facilitate fast value transfer, and support personal remittances and international payments.
Similarly, as one of the world’s largest payment networks, Visa is also experimenting with stablecoin payments. Cuy Sheffield, Visa’s Head of Crypto, has mentioned their utilization of stablecoins like USDC, as well as global blockchain networks such as Solana and Ethereum, to improve the speed of cross-border settlements. Visa is also conducting real-time pilot projects to enable Visa card payments to be settled with USDC.
Practical Applications of Stablecoins in Underdeveloped Financial Areas
1. Nigeria: High Demand for USDT
Nigeria is a country particularly interested in cryptocurrencies, especially in areas with limited access to banking services. USDT has become the preferred choice for many residents in states like Kano and Borno in northern Nigeria. These residents have found USDT to be more stable and reliable compared to the local currency. Bitcoin and Dogecoin are also popular in different regions. For example, Bitcoin is highly favored in financially developed areas like Delta State, while Dogecoin has gained popularity in conservative northern states due to its low transaction fees and ease of use.
2. Argentina: Paxos International Introduces Yield-Generating Stablecoin USDL
Argentina is another country with a high demand for stablecoins, mainly due to economic instability and severe inflation. Paxos International has launched the stablecoin USDL, which allows Argentine consumers to earn overnight yield. Holders can earn overnight yield by holding short-term, low-risk assets such as US government securities and cash equivalents, which are managed by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) in accordance with safety and custody requirements. This reserve structure is similar to other Paxos-issued 1:1 backed US dollar stablecoins. USDL is issued on Ethereum without permission and pays out yields to token holders programmatically on a daily basis.
Clearer Global Regulations
1. Implementation of MiCA Regulation in the European Union
The Markets in Crypto-Assets Regulation (MiCA) in the European Union is set to take effect soon, marking a significant step towards comprehensive regulation of stablecoins and other crypto assets. The MiCA regulation aims to ensure transparency and stability in the cryptocurrency market, requiring issuers to provide detailed information disclosure and meet stringent reserve and capital requirements. These new regulations will have a significant impact on the issuance and use of stablecoins, particularly in ensuring the security of user funds and market stability.
2. Regulatory Framework and Sandbox Program in Hong Kong
The Hong Kong government is continuously improving its regulatory framework for stablecoins to adapt to the rapidly changing market environment. The Hong Kong Monetary Authority (HKMA) has introduced a sandbox program that allows companies interested in issuing stablecoins in Hong Kong to test their operational plans in a controlled environment. This sandbox program not only helps companies understand and comply with Hong Kong’s regulatory requirements but also promotes communication and cooperation between regulatory agencies and businesses to ensure the healthy development of the stablecoin market.
3. US Policy
Both the United States and the European Union are actively formulating and implementing new regulatory policies for stablecoins to ensure the healthy development of this market. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are conducting rigorous reviews of stablecoin issuance and trading to prevent market manipulation and protect investor interests. This week, consumer advocacy organizations in the United States launched a multi-million-dollar advertising campaign focusing on the business practices of Tether (USDT). This campaign, through TV ads, billboards, and other promotional means, aims to raise awareness of potential risks associated with Tether, particularly its reserve audit issues. This public outcry and warning have not only prompted scrutiny of Tether and other stablecoins but also led to the implementation of stricter regulatory measures to protect consumers from potential financial risks.
Future Trends
As more countries introduce regulatory policies for stablecoins, this will further drive the standardization and maturation of the stablecoin market, attracting more institutional and individual users. Stablecoins are not only popular among individual users but also play an important role in corporate payments, cross-border remittances, and decentralized finance (DeFi) applications. Enterprises can use stablecoins for faster and lower-cost international payments, while DeFi platforms provide financial services such as lending and trading through stablecoins. Stablecoins are not only widely used in developed countries but are also rapidly gaining popularity in developing countries. Stablecoins provide users in these countries with a tool to combat inflation and economic instability.
Jeremy Allaire, the CEO of Circle, predicts that stablecoins may account for 10% of the global economic currency in the next decade. Although this prediction may sound exaggerated, he mentions several factors that could contribute to the rapid adoption of stablecoins over the next ten years.
In a post on June 19, Allaire pointed out that some of the world’s largest payment companies are using this technology and exploring ways to expand its usage because the advantages of public blockchains and stablecoins are becoming increasingly apparent. He believes that this market has tremendous potential and can reach a scale of “billions.” By using digital dollars on the blockchain, banking services can be provided to people without bank accounts, remittance costs can be reduced, and seamless cross-border trade can be achieved. Additionally, he notes that stablecoins are becoming an increasingly popular form of digital currency, and by the end of 2025, stablecoins will account for a “growing portion” of the global $100 trillion electronic currency market.
