From Technical Patches to Disruptors of the Global Financial Order: A Decade of Evolution of Stablecoins

Introduction: The Millennial Leap of Currency Forms

The history of currency is humanity's eternal pursuit and game of "efficiency" and "trust". From the shell money of the Neolithic era to bronze coins, from the half tael coins of the Qin and Han dynasties to the Jiaozi of the Tang and Song dynasties, each transformation in the form of currency has been accompanied by technological breakthroughs and institutional innovations.

During the Northern Song Dynasty, the Jiaozhi replaced iron coins with paper money, pioneering the era of credit currency. In the Ming and Qing Dynasties, silver became the main currency. After the collapse of the Bretton Woods system in the 20th century, the US dollar reconstructed the global financial order as a pure credit currency. The emergence of Bitcoin marks the beginning of the shift of monetary power from sovereign states to algorithms and consensus.

The rise of stablecoins has further driven this transformation. It not only enhances payment efficiency but also reshapes the logic of currency power distribution. In the digital age, code is becoming a more solid foundation of trust than gold. Stablecoins are pushing the millennium-old currency game to a new peak: when code begins to write the rules of currency, trust is no longer scarce, but becomes programmable, divisible, and a digital power that can be gamed.

Chapter 1 Origins and Budding (2014-2017): The "Dollar Stand-in" of the Crypto World

In 2008, Satoshi Nakamoto published the Bitcoin white paper, marking the beginning of the era of decentralized digital currency. Early Bitcoin transactions relied on a peer-to-peer network, which was inefficient. The first Bitcoin exchange, Mt. Gox, was established in 2010, but the inefficiency of bank transfers still limited the circulation of Bitcoin.

In 2014, Tether launched USDT, promising a 1:1 peg to the US dollar. It broke down the barriers between fiat and cryptocurrency, becoming the "dollar substitute" in the crypto world. USDT quickly captured 90% of trading pairs on exchanges, sparking a wave of cross-platform arbitrage, providing payroll channels for mining companies in Africa, and even becoming "digital gold" for countries like Argentina to combat inflation.

However, the "1:1 peg" of USDT has always been questioned. The lack of transparency in reserve assets, combined with the abuse of anonymity for illegal transactions, has led to a crisis of trust. This exposes the contradiction between the "efficiency-first" approach of stablecoins and the "rigidity of trust": the coded commitment attempts to replace sovereign credit, but falls into the "trust paradox" due to centralized operations.

Chapter 2: Barbaric Growth and Trust Crisis (2018-2022): Dark Web, Terrorism, and Algorithm Collapse

Stablecoins have transformed from a payment tool into a carrier of "dark finance." After 2018, their anonymity and cross-border characteristics were exploited by criminals. North Korean hackers laundered money through USDT, and ISIS raised funds using stablecoins. The lag in regulation has given rise to more complex evasion methods.

The rise and fall of algorithmic stablecoins has pushed the trust crisis to its peak. In May 2022, the collapse of the Terra ecosystem and the depegging of UST led to a market valuation loss of approximately $18.7 billion, triggering the collapse of multiple institutions. This exposed the fragile dependence of algorithmic stablecoins on market confidence.

Centralized stablecoins have not been spared either. Tether's reserve asset controversies are ongoing, and USDC temporarily depegged due to the Silicon Valley Bank incident, revealing the deep binding risks between traditional finance and the crypto ecosystem.

In the face of a systemic trust crisis, the industry is starting to save itself. DAI builds a multi-asset collateral system, and USDC implements a "glass box" strategy to improve transparency. This self-rescue movement is essentially a compromise of cryptocurrencies with traditional financial regulatory frameworks, indicating that stablecoins will seek a balance between regulatory certainty and innovation uncertainty in the future.

Chapter 3 Regulatory Integration and Sovereign Competition (2023-2025): Global Legislative Competition

In June 2025, the United States passed the GENIUS Act, requiring stablecoins to be pegged to dollar assets and brought under regulation. A few days later, Hong Kong passed the Stablecoin Ordinance, becoming the first region in the world to fully regulate fiat stablecoins. This legislative race reflects the competition among countries for monetary dominance in the digital financial era.

The EU MiCA legislation, Singapore's Payment Services Act, and Japan's revised Fund Settlement Act, among others, showcase differentiated regulatory approaches across regions. Meanwhile, China has completely banned virtual currency trading, Russia allows USDT for cross-border trade, and African countries encourage the use of stablecoins due to a shortage of US dollars.

The deepening regulation of global stablecoins is reshaping the pattern of the financial system. It challenges the traditional settlement system represented by SWIFT, intensifies the struggle for monetary sovereignty, and enhances the risk transmission of the financial system. In the future, stablecoins may become an alternative infrastructure for CBDCs, but their long-term impact still needs to be observed.

Chapter Four: Now and the Future: Deconstruction, Reconstruction, and Redefinition

Looking back at the ten-year journey of stablecoins, we have witnessed a transformation of technological breakthroughs, trust games, and power restructuring. It has evolved from a "technical patch" addressing the liquidity issues of the crypto market to a "financial order disruptor" challenging the status of sovereign currencies.

The development of stablecoins is essentially a redefinition of the "nature of currency." From physical credit to sovereign credit, and then to code credit, humanity's understanding of value carriers is shifting from "reliable physical objects" to "verifiable rules."

The controversy over stablecoins reflects the deep contradictions of the digital age: the trade-off between efficiency and security, the struggle between innovation and regulation, and the conflict between the ideals of globalization and the realities of sovereignty. It has become a mirror reflecting the possibilities of digital finance and humanity's yearning for trust and order.

Looking ahead, stablecoins will continue to evolve between regulation and innovation, potentially becoming the cornerstone of a "new monetary system" in the digital economy era, while also facing reconstruction. Regardless, it has profoundly rewritten the logic of monetary history: currency is no longer just a symbol of national credit, but a symbiotic entity of technology, consensus, and power. Stablecoins are opening a new chapter in humanity's exploration of a more efficient, fair, and inclusive monetary order.