Bitcoin breaks through 110,000 to hit a new high, the stablecoin craze sweeps the market

This week, the crypto market welcomed multiple positive news. Bitcoin surged strongly, driven by institutions, breaking through the $110,000 mark on May 22, setting a new historical high. Ethereum, AI, and Meme sectors also saw a general rise. On the policy front, Hong Kong and the United States have successively laid out plans for the stablecoin industry, leading to fluctuations in related DeFi assets. The Texas Senate passed a Bitcoin reserve bill, which is expected to make it the third state to establish an official Bitcoin reserve.

A well-known family's USD1 stablecoin has become the market focus, and a large exchange has launched the USD1/USDT trading pair. With the advancement of related legislation, the narrative around stablecoin compliance is heating up. The integration of USD1 across multiple ecosystems is driving a price surge in related projects. Market trading volume has increased by 2.42%, investor confidence is high, and speculation centered around USD1 may dominate the short-term market trend. Various ecosystems' DeFi and RWA projects are worth paying attention to.

The Narrative of USD1 Warms Up

On May 22, a well-known family project announced an investment of $25,000 to purchase 636,961 $B tokens to encourage the use of $USD1 as the base trading pair. Following the news, the $B token quickly attracted market attention, with a single-day increase of 7 times. The prices of other project tokens that had previously collaborated with this project also generally rose. Subsequently, a large exchange immediately listed USD1 and opened the USD1/USDT trading pair, determining the market tone for the near to medium term as speculation on related assets centered around USD1.

Progress of Stablecoin Legislation

On May 20, the U.S. Senate passed a procedural motion, allowing the stablecoin bill to enter the formal review stage, marking an important step for compliant stablecoins. After the bill is passed, it will be a significant boost for public chains and DeFi products in the crypto market.

A well-known stablecoin issuer's annual net profit exceeded $13 billion in the fourth quarter of 2024, and the group's stock price soared to over $20 billion, demonstrating that the stablecoin direction has massive profit potential. Many RWA and on-chain activities are based on stablecoins as the foundational currency.

Currently, the market capitalization of USD1 is 2.139B, mainly issued on a certain public chain. Multiple DeFi projects have begun to integrate USD1, such as launching USD1 collateral, liquidity pools, etc. These projects have shown good market performance under the speculation of USD1.

Multi-chain Layout

In addition to the aforementioned public chains, another well-known public chain founder has also actively invested in a certain well-known family project and has become its advisor. This public chain may become one of the main issuance chains for USD1. Related ecological projects such as lending protocols, DEX, etc. are expected to benefit from the growth brought by USD1.

Core Content of the Stablecoin Bill

The bill stipulates that only approved issuing entities may issue payment stablecoins to U.S. users, including bank subsidiaries and federally or state-qualified non-bank issuing entities. Issuing entities may choose federal or state-level regulation, and large issuers must be subject to direct oversight by the Federal Reserve System or the OCC.

Stablecoins must hold reserve assets in a 1:1 ratio, such as US dollars or liquid assets. Issuers are required to hold equivalent cash or short-term U.S. Treasury securities as reserves. The bill also mandates the disclosure of redemption policies and the monthly disclosure of reserve details.

Foreign issuers must meet specific conditions to offer stablecoins in the United States. Payment stablecoins are not considered securities, but issuers must comply with anti-money laundering regulations.

The bill also restricts large tech companies from issuing stablecoins, preventing certain companies from issuing stablecoins and maintaining the separation of banks and commerce.

Impact of the stablecoin sector

The total market value of stablecoins has reached $245 billion, and it is expected to reach $400 billion by 2025. Major stablecoin issuers may adjust their reserve structures and disclosure policies according to legislative requirements. With the influx of various compliant stablecoins, market competition will become more intense.

Some emerging stablecoin projects such as USDtb are highly consistent with the requirements of the bill due to their fully collateralized model. DeFi projects providing stablecoin-related services will also benefit from the increased market trust brought by the bill.

Benefits of Public Chains

Public chains with high-frequency stablecoin use cases are also among the beneficiaries, currently mainly concentrated on Ethereum, Solana, and Tron. Due to the close relationship between USD1 and a certain public chain, that public chain may also become one of the potential public chains. RWA, PayFi, and DeFi products on each public chain are also worth paying special attention to.