Stock Trading Stablecoin Market Grows as Regulatory Framework Takes Effect

1. Update on Key Stock Trading Terms: Reserve Interest and Prohibition on Interest Payments

Reserve Interest Received by Issuers: According to the latest details of the bill, stock trading issuers (such as Tether and Circle) may retain interest income generated by reserve assets (such as US Treasuries and repurchase agreements), but are prohibited from paying interest directly to holders. This provision is intended to prevent stock trading from evolving into a "bank-like savings product" and directly competing with traditional deposit services.17

Policy Intention: By allowing issuers to retain interest, it encourages institutional participation in stock trading issuance (e.g., JPMorgan Chase and Bank of America have plans to enter the market), while maintaining the positioning of stock trading as a "payment tool" rather than an investment product.29

Exception: Third-party platforms (such as stock trading or DeFi protocols) may still indirectly provide returns to holders through other means (such as liquidity mining), but issuers themselves are prohibited from engaging in this activity.7

2. Stock Trading Market Growth: Total Market Cap Reaches $264 Billion, $4 Billion Weekly Increase

Scale and Structure: The total market capitalization of stock trading currently exceeds $264 billion, of which fiat-collateralized (e.g., USDT, USDC) accounts for 85%, cryptocurrency-collateralized (e.g., DAI) accounts for 6.5%, and the remainder is algorithmic and commodity-backed.

Growth Drivers:

Regulatory Clarity: Following the implementation of stock trading, institutional capital inflows accelerated. The $4 billion in July additions primarily came from traditional financial institutions (e.g., WisdomTree's launch of USDW and Anchorage Digital's partnership with Ethena Labs to issue stock trading).

Demand for U.S. Treasuries: The bill requires reserve assets to be U.S. dollars or U.S. Treasuries maturing within 93 days, indirectly boosting liquidity in the short-term U.S. Treasury market.

Intensifying Head-to-Head Effect: USDT (market cap: $156 billion) and USDC ($71 billion) together account for over 85%, and new entrants face strict compliance requirements. 3. Bidirectional Impact of Policy and Markets

For Issuers:

Shifting Profit Models: Interest income may become a significant source of profit (e.g., Tether's net profit reached $4.2 billion in Q2 2024, approaching Goldman Sachs' level7), but this will incur high compliance costs (e.g., monthly audits and redemption guarantees).

Competitive Landscape: Large banks (e.g., JPMorgan Chase) may dominate the market with low-cost funding and regulatory resources, squeezing out small and medium-sized issuers.9

For Coin Holders:

Improved Security: The bill requires 100% reserve transparency and bankruptcy priority, reducing the risk of decoupling (e.g., the Silicon Valley Bank incident in 2023 caused USDC to briefly plummet to $0.88).3

Limited Returns: The interest-free design may reduce retail investors' willingness to hold, but institutional users are more concerned with compliance and liquidity.7

4. Global Regulatory Trends and Strengthening US Dollar Hegemony

US Dominance: US dollar stock trading accounts for 99% of global trading. The bill consolidates its monetary hegemony through a "dollar-US Treasury-stock trading" cycle (similar to the Eurodollar system).37

Responses from other regions:

Hong Kong: Passed the "Stock Trading Bill," allowing Ant Group and others to apply for licenses and promoting the linkage between Hong Kong dollar stock trading and the digital RMB.

EU: The MiCA Act requires stock trading to hold a portion of its reserves in cash, but does not mandate a binding of US dollar assets, resulting in differentiated regulation.

5. Future Outlook and Risks

Growth Forecast: Citigroup estimates the stock trading market could reach $3.7 trillion by 2030, but JPMorgan Chase believes the $2 trillion target is overly optimistic.

Potential Risks:

Regulatory arbitrage: Non-compliant stock trading (such as some algorithmic cryptocurrencies) may shift to offshore markets.

Sovereign currency shock: Emerging markets (such as Argentina and Turkey) face the risk of US dollar stock trading replacing their local currencies.

Conclusion: Stock trading is reshaping the industry's profit model through interest distribution rules, driving market expansion in the short term, but facing long-term competition and regulatory challenges. The global stock trading game has risen to the level of monetary sovereignty, and the US dollar system may become the biggest winner.