稳定币：别怀疑！Coinbase 的 iPhone 时刻

In the previous article, Dolphin Research discussed $Coinbase(COIN.US), mentioning that the potential value of Coinbase is heavily dependent on stablecoins.

On one hand, stablecoins benefit the fundamental operations within the Coinbase ecosystem, such as trading, custody, and staking. More importantly, they expand Coinbase's business scenarios, opening up growth possibilities through commercial payments and asset tokenization investments.

On the other hand, stablecoins inherently generate revenue, as the reserve assets for issuing stablecoins are primarily U.S. Treasury bonds, which offer substantial interest income. Currently, according to the agreement, as long as the proportion of USDC on $Circle(CRCL.US)'s platform does not increase rapidly, Coinbase can generally receive more than half of the interest income.

Therefore, this article will discuss in detail the speculative logic behind stablecoins, concluding with the valuation of Coinbase and Circle in the next article.

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I. Is it a bubble of "dream rate" or an underestimated potential space?

Circle's IPO valuation was $6.8 billion, and within less than a month after listing, it surged up to ten times, with short-term PE and PS skyrocketing, seemingly requiring the "dream rate valuation" to explain. (For basic concepts of stablecoins, if unclear, click here for details, which will not be elaborated in this article.)

However, to say that the funds are blindly speculating is not entirely accurate. "Great imagination of the track + scarcity", these two highlights are enough for funds to choose to pile up at the moment (with interest rate cuts imminent).

But Dolphin Research prefers less grand narrative excitement and aims to discuss rationally: How large is the market size for stablecoins? How scarce is Circle?

1. Why is there a "rigid demand" for stablecoins?

Stablecoins are a type of cryptocurrency, and their most universal significance is to compensate for the instability of cryptocurrency values, reducing the settlement costs of global traditional finance, including capital costs and time costs.

Therefore, besides the trading of cryptocurrency assets themselves, high-cost, long-duration transactions and settlement and exchange in the real world are also key demand scenarios for stablecoins, such as cross-border trade, especially in high inflation regions with extremely unstable exchange rates, like Latin American countries.

Generally, the delivery and settlement process of traditional cross-border trade requires multiple intermediary institutions, with different compliance and fee rules across countries and regions. Compared to the smooth flow of internet information, the circulation of funds still faces many intermediate friction costs.

In cross-border settlement processes represented by SWIFT, payment institutions, issuing banks (payer, payee), intermediary banks, and clearing systems have an average intermediate cost of 6%. If unlucky enough to encounter exchange rate fluctuations, the hidden costs will only be higher.

But if both parties use stablecoins for transaction settlement, the transaction fee cost will drop by 99%, only bearing the Gas fee (network fee on-chain, Ethereum mainnet $0.5-5 per transfer) and custody compliance cost of 0.01%, which is almost negligible in large trade marginal costs. If stablecoins gain wider recognition, this is the most motivated demand scenario for converting to stablecoin payments.

2. How did the expectation of a $2 trillion market come about?

Regarding the future space scale of stablecoins, the mainstream market expectation is $2 trillion by 2028, with more optimistic forecasts reaching $3.7 trillion by 2030, and conservative ones at $1 trillion by 2030.

The first two come from reports by Standard Chartered and Citibank (optimistic forecasts), with Citibank's pessimistic and neutral forecasts at $500 billion and $1.6 trillion, respectively. The optimistic forecast mainly has higher expectations for compliance and on-chain payment scenario penetration.

Conservatives believe that in the future, traditional asset tokenization and on-chain payment settlement scenarios will mainly be dominated by digital legal currencies issued by central banks (CBDC), essentially not completely decentralized, with high compliance restrictions, leaving the rest to be handled by (USD) stablecoins.

But the reason $2 trillion became the mainstream expectation is due to the endorsement of the U.S. Treasury Secretary. In a public speech on June 11, he stated that stablecoins would exceed $2 trillion, and just a week later, Bessent named Citibank's prediction of stablecoins reaching $3.7 trillion by the end of 2030 on X.

How large is the stablecoin market now? Only 1/10 of the above expected value. As of yesterday (June 30), the stablecoin market value was $263 billion. Since Circle's listing, during June, the entire stablecoin market value increased by over 10%. If the expectation truly reaches over $2 trillion, it would be highly attractive to players across the entire industry chain.

But Bessent's viewpoint is not independent. If these stablecoins are all collateralized with U.S. Treasury bonds, he is the "number one salesman" for U.S. Treasury auctions. In the most optimistic scenario, it means the U.S. Treasury directly gains a buyer with $3.7 trillion purchasing power.

Although Bessent is biased, the key to stablecoin development is heavily reliant on the push from regulatory departments. The issuance of trillions of new national debt in the coming year is likely to depend on the help of stablecoin issuance, with regulatory and stablecoin interests aligning to some extent. Therefore, optimists use Bessent's viewpoint as the mainstream expectation, which is logically sound.

But the question is, why can the future stablecoin market expand to more than ten times today's size? Combining reports from major institutions (Standard Chartered & Citibank), let's examine the underlying logic.

(1) Demand perspective—Reference Standard Chartered & Citibank

Estimating the stablecoin market size from demand is the prediction logic adopted by most institutions, mainly considering the penetration rate of scenarios that can replace fiat currency demand.

Stablecoin demand generally falls into three categories:

a. Demand within the crypto asset ecosystem (including trading, lending, etc.)

This is currently the main function of stablecoins. With a market value of over $260 billion, based on the trading situation in the first quarter of 2025, the annualized trading volume can reach $18 trillion, with a turnover rate of 70 times.

But 90% of it is used for cryptocurrency trading. Using stablecoins for crypto asset transactions has become the mainstream trading method in the cryptocurrency market. According to 1Q25 data, using stablecoins to buy and sell cryptocurrencies accounts for about 50% (monthly average stablecoin trading volume of $1.3 trillion/monthly average spot crypto asset trading volume of $2.5 trillion).

Stablecoin trading and the entire crypto market are mutually reinforcing. On one hand, the expansion of crypto asset trading naturally drives stablecoin demand. On the other hand, stablecoins compensate for the high volatility of cryptocurrencies, reducing the risk of funds converting to fiat currency and leaving the crypto asset market during low market periods (usually occurring during liquidity tightening or regulatory tightening), thereby smoothing market volatility and attracting more mainstream funds.

This tightly interlocked relationship makes stablecoin trading the most likely to achieve natural improvement in penetration within the crypto asset ecosystem, and in extreme cases, using stablecoins for all transactions within the crypto asset ecosystem is not impossible.

b. B2B transactions

This is the main scenario extension for stablecoin future growth. With $114 trillion in global B2B payments and $38 trillion in cross-border transactions, even a single-digit penetration rate represents a significant volume.

(1) Currently, stablecoins are already being applied in import and export trade in countries and regions where settlement and exchange are not timely (Asia, Latin America, etc.). For example, both parties agree to settle in stablecoins, saving SWIFT fees of nearly $50-100 and 3-5 days of settlement time, while avoiding short-term exchange rate fluctuation risks.

(2) On online platforms, Coinbase has partnered with Shopify to integrate stablecoin payment channels for platform B2B transactions. Additionally, payment platforms Stripe and Checkout.com have introduced USDC transaction methods.

(3) E-commerce retail giants Amazon and Walmart have recently planned to focus on internal development for stablecoin delivery. However, their approach may differ, not simply opening existing stablecoin payment channels, but issuing closed-loop stablecoins within their internal ecosystems (in collaboration with financial institutions qualified to issue).

c. Securities trading

This mainly refers to investors holding stablecoins being able to purchase tokens (on-chain stocks) to hold equity, significantly reducing transaction settlement costs, including simplifying financing processes, while enjoying 24x7 trading services.

For example, recently, exchanges Karen and Bybit have tokenized stocks of globally liquid leading companies like Apple, Tesla, NVIDIA, ASML, Tencent, Meituan, etc., on the xStocks platform.

d. Other

Other scenarios such as interbank transactions, consumer remittances, etc. are not rigid demands for stablecoins, so stablecoin penetration is not the first priority, but it will generate some incremental demand.

Finally, based on different scenario penetration rate assumptions, the stablecoin market size is estimated to reach a range of $1.6-3.7 trillion in five years.

(2) Forecast revision: Considering the most rigid USD scenarios

Combining the above, institutions' expectations for the stablecoin market size range from $0.5-3.7 trillion. But Dolphin Research feels this expectation process is somewhat vague, and the uncertainty of achieving it is still high. The biggest variable is the penetration rate of stablecoins in different scenarios, where even a slight difference in massive transaction volumes can lead to significant variations.

However, since stablecoins do not lack demand, their future development mainly depends on the "regulatory valve" and the courage of existing traditional financial institutions to embrace change. Therefore, Bessent's endorsement represents the government's push attitude, potentially increasing the likelihood of achieving expectations.

But for entities outside the United States, Dolphin Research is skeptical about their subjective willingness to promote stablecoins. After all, promoting stablecoins without issuance restrictions may ultimately "make clothes for the U.S.", helping solve the U.S. Treasury bond issue.

And the recent proactive regulation of stablecoins by the EU and Hong Kong, Dolphin Research believes, is actually a result of being forced to move forward. On one hand, the crypto asset market is already very large, and using stablecoins for liquidity tracking is a wise choice of "if you can't beat them, join them". On the other hand, the proactive regulation of stablecoins is likely aimed at preventing further consolidation of dollar hegemony. Therefore, a necessary requirement in issuing regulations is to issue stablecoins based on the reserve of the country's legal currency.

But besides the USD, other legal currencies are somewhat limited as international trade settlement currencies, and other legal currencies are not globally circulated, with some experiencing inflation, leading to stablecoins issued based on these currencies not being truly "stable". Ultimately, this hinders the penetration of stablecoins into more commercial scenarios, becoming a "Central Bank Digital Currency (CBDC)" with a stablecoin shell—not completely decentralized, with inflation subject to regulatory department choices.

Therefore, to improve prediction certainty, Dolphin Research chooses to only estimate the market size of "USD stablecoin rigid demand scenarios". After revising the assumptions of the above institutions, selecting the average value under two assumptions, the final neutral expectation for the stablecoin market size in 2030 is $1.4 trillion.

Further subdividing demand scenarios, the largest change in expectations is mainly due to the development speed of real-world asset (RWA) on-chain transactions, which can lead to thousands or even tens of trillions of incremental expectation differences (Standard Chartered and Citibank's expectations range from $400 billion to $1.5 trillion). In the final market size in 2030, stablecoin demand generated by RWA on-chain accounts for 25%-40%. Secondly, the potential market size for B2B cross-border trade, with stablecoin balance accounting for 10-15% of the estimated market value.

3. How is the trillion-dollar market divided?

No matter the final expectation, to have stablecoins step out of the crypto asset ecosystem and occupy a place as a circulating currency in the global commercial scenario, there must be a market size of at least a trillion dollars.

Currently, there are quite a few players in this market, and although regulation is beginning to standardize, more are bound to emerge in the future. The key is who can truly capture the market and occupy users' minds. Just like platforms developing mobile payments, every internet ecosystem has its own payment method, and UnionPay launched Cloud QuickPass leveraging issuing banks' advantages, but user habits determine that first-mover advantage and product experience are crucial, ultimately evolving into a final ecosystem dominated by a few leading players.

Therefore, whether for Circle or Coinbase, the future market share of USDC is crucial to its current valuation imagination. This is also the second logic behind Circle's post-listing surge—scarcity.

(1) Where is Circle's scarcity?

Circle began issuing the stablecoin USDC in 2018, but it was not the first stablecoin issuer. Five years before USDC's listing, Tether had already issued USDT. These two stablecoins are still the market leaders, accounting for 90% of the market.

Tether currently holds the leading position, due to first-mover advantage and Binance's promotion. Binance is the world's largest cryptocurrency exchange, with trading volume accounting for 60% of the entire market, and it began fully supporting USDT trading in 2019.

But as USDT came under U.S. regulatory scrutiny, Binance began supporting FDUSD, a USD stablecoin issuer with a Hong Kong trust license regulated by the Hong Kong Monetary Authority. Until the end of 2024, six months before Circle's listing, Binance announced the systematic introduction of USDC to support cryptocurrency trading.

The following chart shows stablecoin trading within the Binance ecosystem:

Among the three major stablecoins issued by collateralizing high-liquidity USD assets, USDT, USDC, and FDUSD mainly differ in existing penetration rates and compliance. Overall, compliance comparison: USDC > FDUSD > USDT, user penetration rate (market trading volume): USDT (74%) > USDC (14%) > FDUSD (8%).

Circle's USDC is scarce in "compliance". The "GENIUS Act" is the formal legislation recognizing stablecoins, although it still awaits House voting and presidential signature, regulatory intervention is a major trend, and its regulatory guidelines for stablecoin issuance are a clear reference direction.

By comparing the main guidelines, among the three largest USD stablecoins globally, USDC is the only stablecoin fully compliant with the GENIUS Act. USDT has many issues, not meeting regulations in issuer qualifications, information disclosure, and stablecoin activities (margin collateral). FDUSD has fewer issues, with the key point being the "Hong Kong-U.S. regulatory mutual recognition" negotiations. If Hong Kong's "Stablecoin Ordinance" is recognized as "equivalent", it may enter the U.S. market through OCC registration.

(2) Will the first-mover advantage be caught up?

But USDC's scarcity is based on comparison with currently issued USD stablecoins. In terms of "compliance", traditional financial companies' licenses are only more complete, with higher compliance. So the key contradiction becomes whether USDC's seven-year first-mover advantage can be maintained in the future?

This essentially returns to the "scenario end" vs. "issuance end" importance issue, which is also the potential focus of interest competition between Coinbase and Circle. However, traditional financial companies naturally have more advantages in user scenarios than Coinbase, not to mention Circle. The relaxation of crypto asset regulation to "loose" to some extent lifts the restrictions on traditional finance entering the crypto asset business. Once unleashed, traditional finance's competitiveness cannot be underestimated.

But ultimately, it depends on how users choose.

This reminds Dolphin Research of the online payment battle in China, from a hundred schools of thought to the final duopoly of Alipay and WeChat Pay occupying 90% of the market, indicating that for users, since the goal is to eliminate all intermediate costs, naturally, the more unified the circulating currency, the better.

And if we refer to Alipay's market capture path, the experience gained is: scenarios are crucial in the user mind capture stage, followed by technological innovation, and finally, some "user incentives" are needed to accelerate market capture. Once market share stabilizes, the initiative is more with the issuer.

a. Scenarios need continuous extension

Backed by Alibaba, Alipay had a rigid scenario from the start. To solve the trust issue in online transactions, Alipay introduced the "guaranteed transaction" scenario. Subsequently, it cooperated with major banks to launch virtual accounts, cultivating users' habits of pre-storing for convenient consumption payments, i.e., the "digital wallet" scenario. In 2008, it further entered "utility bill payment" and other livelihood scenarios, expanding user coverage.

But later, in offline payment scenarios, WeChat's traffic advantage gave WeChat Pay the opportunity to overtake. This also illustrates the importance of scenarios. But when the domestic payment market stabilized with a duopoly market share and user mind, Douyin and Pinduoduo, despite holding payment scenarios, were unable to effectively promote their payment tools.

b. Technological innovation is the main catalyst

Alipay's ability to continuously penetrate users is not only due to scenarios but also because the product is solid, which is key to retaining active users. And in developing new features, it can promptly follow users' real needs. For example, QR codes greatly simplified the online payment process for users, accelerating circulation speed, clearly meeting user needs.

c. User incentives are also a weapon

User habits are key to cultivating user mind. Therefore, besides scenario expansion and technology development, when the core circle of users is penetrated, further expanding user mind requires some incentives. When Alipay was making larger market penetration while facing competition from WeChat Pay and others, it began distributing money to accelerate customer acquisition, such as new user registration bonuses, scan bonuses, etc., averaging a few to dozens of yuan.

If we apply Alipay's development experience, Circle is indeed at a disadvantage in scenario coverage. Compared to traditional financial institutions, user coverage and transaction scale are very small. Internally, compared to USDT, the transaction scale gap is also significant. Clearly, despite being less "compliant", at least currently, USDT is superior to USDC in scenario coverage (exchange coverage, C2B shopping, corporate salary distribution, etc.).

Fortunately, the market is still in its initial stage, and discussing who has broader scenario coverage based on low market share is actually meaningless. The focus is on what changes will occur in the future?

For USDT, once the "GENIUS Act" is formally implemented, if USDT cannot complete rectification within three years, it must exit the U.S. market. And for traditional financial institutions, they need to accelerate stablecoin issuance and introduce it into existing scenarios.

Therefore, for USDC,grasping this window is crucial, USDC needs to accelerate scenario expansion, subsidize users, and grow the market.After Circle's listing, it has been active in cross-border payments, RWA, and ecosystem building, with a very clear strategic direction.

(3) The urgent task is to unite externally

Although we still believe that after Circle's listing facing secondary shareholders, there will be more revenue growth demands, potentially expanding the interest divergence with Coinbase, combining the analysis in (1)-(2), seizing the "compliance window period" created by the "GENIUS Act" to grow the USDC cake and further expand oligopoly advantages is clearly more critical.

If we must discuss the advantage of discourse between Circle and Coinbase, Dolphin Research believes that although Circle's position has improved, Coinbase, which holds scenarios, still temporarily leads. The "compliance window period" is a "key opportunity" for Circle to determine whether it can reach the end, requiring more allies and ecosystem partners rather than competitors. But for Coinbase, it is merely "icing on the cake" to leverage USDC to open more imagination space.

Referring to the general stable competitive pattern of the online economy 7:2:1, Dolphin Research assumes:

a. First-tier stablecoins are expected to occupy 70% of the stablecoin market share. In mainstream crypto trading, RWA, and B2B trade payment scenarios, it is assumed that USDC and another stablecoin issued by a traditional financial giant "XYZ" (with scenario advantages, such as PayPal USD, etc.) will form a duopoly, with USDC occupying half of the share, i.e., 35% of the entire market.

b. The second-tier 20%, due to compliance rectification difficulties, will continue to be occupied by USDT in transaction scenarios outside government regulation. This transaction scale is included in the crypto asset ecosystem.

c. The remaining 10% share is composed of long-tail stablecoins. Among them, Amazon and other platforms with scenario advantages are expected to launch applicable stablecoins within their ecosystems, aiming to reduce transaction costs for merchants within the ecosystem, with the purpose of strengthening their business ecosystem rather than independently extending payment business.

Under this relatively positive expectation, USDC's market size in 2030 will reach $750 billion. A slightly cautious neutral expectation can also reach $430 billion. For USDC, which has just surpassed $61 billion, the future five-year compound growth rate of 48% is very promising.

This market of over $400 billion can at worst bring $400 billion * 3% = $12 billion in risk-free Treasury interest, and if further integrated into more transaction payment and investment scenarios, the upper limit of value calculated from the total circulation scale will only be higher.

So as the top player in this industry chain, facing such a large interest cake, will the revolutionary friendship between Coinbase and Circle deteriorate? Has the current market hype for both gone too far? Dolphin Research will continue to discuss in the next article.

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First coverage on July 1, 2025 "Coinbase: On-chain is hot, can the "water seller" really win lying down?"