Analysis of Stablecoin Market Prospects: Opportunities and Challenges Brought by the Passage of the Bill

Stablecoins have become an indispensable part of the Web3 industry. Recently, a stablecoin issuance company saw its stock price triple in just two weeks after going public, attracting widespread attention from the market. This phenomenon is closely related to the stablecoin bill recently passed by the U.S. Senate.

The main contents of the bill include:

1. Establish a dual-track regulatory system for federal and state levels.
2. Requirement: 1:1 reserve ratio, limited types of reserve assets.
3. Regularly disclose reserve status and undergo independent audits.
4. The issuer must apply for a license and accept regulation.
5. Comply with anti-money laundering and sanctions compliance requirements
6. Protect consumer rights and ensure priority compensation rights

A key point of the bill is that it requires stablecoin reserves to be backed by highly liquid, low-risk assets, such as US dollar cash and short-term government bonds. This regulation could significantly increase the demand for US treasuries and help lower government financing costs. At the same time, the global application of stablecoins may further consolidate the US dollar's status as a reserve currency.

Although the bill still requires review by the House of Representatives and presidential approval, the market generally expects it to be implemented eventually. This expectation has driven a significant rise in the stock prices of related companies. However, based solely on the current financial situation, the valuations of certain companies appear to be overly high. The market's favor may stem from optimistic expectations about the future growth potential of the stablecoin market. Some analysts believe that by 2028, the global stablecoin market value could reach $2 trillion.

The stablecoin industry chain includes multiple links such as issuance, channel distribution, application scenarios, and technical support. Currently, the issuance market has formed an oligopoly, and new entrants may face fierce competition. For startups, providing services in segmented application scenarios may offer more opportunities, such as solutions for small cross-border payments. Although technical support services have lower profit margins, they may be a choice for stable cash flow.

In the secondary market, in addition to companies directly involved in stablecoin issuance, some cryptocurrency trading platforms, payment companies, and fintech enterprises may also benefit from the expansion of the stablecoin market. Furthermore, as the scale of stablecoins grows, lending protocols and yield management platforms in the decentralized finance (DeFi) space may also encounter new development opportunities.

Overall, the rapid development of the stablecoin market has brought diverse opportunities for investors, but it is also accompanied by numerous challenges such as regulation and competition. Investors need to carefully assess the risks and potential of various segments to make informed investment decisions.