> ## Content Index > Fetch the complete content index at: https://www.aboutdefi.asia/llms.txt > Use this file to discover other available public pages before exploring further. # Stablecoins Explained - URL: https://www.aboutdefi.asia/stablecoins-explained/ - Published: 2026-08-12T02:40:07.000Z - Updated: 2026-08-12T02:40:07.000Z - Author: Kendrick - Tags: Asia Lens, Explainers, Regulation A nurse in Manila sends money home from Dubai. A designer in Ho Chi Minh City invoices a client in California. A shop owner in Jakarta wants to keep some savings in dollars, because the rupiah has a rough decade every so often. Ten years ago, all three moved money the same slow, costly way: through a bank or a remittance counter, two to five days, losing 3 to 7 percent in fees along the way. Today a growing number of them do it in under a minute, for cents, using a stablecoin. Most of them couldn't tell you what one is. Let's fix that, and end on the one rule that keeps you safe no matter which coin you hold. --- ## If you only read this - **A stablecoin is a digital token meant to always be worth one dollar, because a real dollar sits in a reserve backing it.** A dollar you can email, in seconds, for cents, at any hour. - **It got huge quietly.** Roughly $290 to $300 billion is now in circulation, about 99% of it dollars, and nearly 90% controlled by just two coins. That concentration is the biggest risk in the whole system. - **Every stablecoin is an IOU from a private company.** For the giants, that company keeps the interest on your money. Who's behind the token, and under which licence, is the entire game. --- ## What a stablecoin actually is **A dollar you can email, issued by a company you have to trust.** Think of a cloakroom ticket. You hand over your coat, you get a numbered tag. The tag is not the coat. It's a claim on the coat. You can hand that tag to a friend, and now they can collect the coat instead of you. The tag moves easily. The coat never leaves the room. A stablecoin works the same way. A company takes one of your dollars, puts it in a reserve, and gives you a digital token that says "worth one dollar, redeemable." You can send that token to anyone in the world in seconds. The real dollar never moves. Only the claim does. Hand the token back in, and you get the dollar. Two things make this different from the number already in your banking app. It runs on a blockchain, a shared public ledger no single bank owns and that never closes, which is why it can move at 2am on a Sunday, across borders, without asking a bank if it's open. And it's only as safe as the reserve behind it and the honesty of the issuer. --- ## Not Bitcoin, and not your bank **It's the exact opposite of Bitcoin, and it isn't quite your bank account either.** Bitcoin's whole point is that its price floats. People buy it hoping it climbs. It's a bet. A stablecoin's whole point is that its price doesn't move at all: one coin is meant to be one dollar today, next month, and in five years. It's a container for not making a bet. Same rails, opposite purpose. And unlike your bank balance, which is a promise from a licensed, insured institution with a regulator behind it, a stablecoin is a promise from a private company that may have neither. Same shape, different guarantee. Hold that line, because everything below comes back to it. --- ## How big it got while nobody was looking **A thing most people can't define is already bigger than the Bank of England's reserves.** As of early August 2026 there's roughly $290 to $300 billion of stablecoins in circulation, about double two years ago, and around 99% of it is dollars. That total now exceeds the foreign-exchange reserves of 95 countries, including the UK and Canada. Remember that 99% figure. It's the key to the whole story at the end. One honest caveat, because credibility depends on it. You'll read that stablecoins moved $33 trillion in 2025, more than Visa. True, and deeply misleading. Most of that "volume" is trading bots and the same dollars bouncing around inside crypto. Genuine real-economy payments were about $350 to $550 billion. Real, but two orders of magnitude smaller than the scary headline. When someone tells you stablecoins already beat Visa, they're quoting the wrong number. --- ## Basically a two-name market **There are 382 stablecoins. Two of them are nearly 90% of the market.** Tether's USDT holds about 64% (roughly $183 billion), and Circle's USDC about 24% (roughly $72 billion). Everything else is a long tail. The two giants split by audience: USDT is the money of the emerging world, dominant across Asia, Africa and Latin America and cheap to send. USDC is the money of regulated institutions, cleaner disclosures, the token banks reach for first. Paid by a freelancer in Vietnam? Probably USDT. Settling a trade for a fund in Singapore? Probably USDC. But a few of the smaller names aren't trying to win on size. They're trying to change the rule the two giants got rich on. One of them is worth watching for reasons that have nothing to do with its market cap, and we'll come back to it once you see where the money actually goes. Concentration isn't a footnote, it's the risk. Because a handful of coins are almost the entire market, one reserve scandal at the top wouldn't be one company's problem. It would be everyone's. --- ## How it changes life on the ground **This is where the theory turns into real money in real pockets.** **Remittances stop being a tax on the poor.** The biggest real-world use of stablecoins is sending money home, and Asia is the largest receiving region on earth. The Philippines alone takes in $36 to $38 billion a year from workers abroad. The old way costs 2 to 7 percent and takes days. On a $500 remittance, cutting the fee from 6% to under 1% puts about $25 back in the recipient's pocket, every month. That's a real raise for the poorest link in the chain. **A dollar bank account, without the bank.** Where the local currency is unreliable, a stablecoin is a dollar savings account anyone with a phone can open. No branch, no minimum, no bank. It isn't speculation, it's a hedge against your own currency, which is why adoption in emerging markets is bottom-up rather than top-down. **Business payments that clear on a Sunday.** For companies, the win is settlement that doesn't stop for weekends, holidays or time zones. Money that used to sit trapped in transit for days now clears in minutes, on a Saturday, while your competitor waits for Monday. --- ## The catch, and who actually gets paid **A stablecoin is an IOU, and for most of them, the issuer keeps the interest on your money.** When you hold a stablecoin, the issuer holds your actual dollar and invests it, mostly in short-term US government debt. Issuers now sit on around $155 billion of US Treasuries. Those Treasuries pay interest. With the two market leaders, that interest goes to the issuer, not to you. You take the risk of holding the token. They collect the return on the float. It's one of the best business models in finance, which is precisely why every large payments company on earth is now building one. **This is the rule a newer group of coins is trying to rewrite.** Instead of the issuer pocketing all the reserve income, they share it back with the exchanges, wallets and platforms that actually put the coin in people's hands. USDG, the Global Dollar, is the clearest example. It's issued out of Singapore by Paxos under the oversight of the Monetary Authority of Singapore, and in Europe under the EU's MiCA regime, and it's built around one idea: route the reward to the network that distributes the coin rather than keeping the lot. It's small next to USDT and USDC, and it doesn't change the basic rule you should live by. But it tells you where the model is heading. Reserve income is becoming something issuers compete on, not something they quietly keep. If you hold stablecoins in size, that shift is the difference between your float earning for someone else and your float earning for you. The risk, for every one of them, sits in that reserve. If the dollars behind the token are real, liquid and audited, the peg holds. If they're not, it breaks, and holders find out their "dollar" is worth 90 cents in a panic. That isn't hypothetical, it's the entire history of failed stablecoins. The issuer's licence, jurisdiction and reserve attestations are the actual product. The token is just the wrapper. --- ## Why "licensed" finally means something **The most useful development of this era is that "regulated stablecoin" stopped being a slogan and became a checkable fact.** For years, anyone could stamp the word "backed" on a token. Now, in the places that matter, a licence dictates what can sit behind it. The US passed the GENIUS Act in July 2025, its first federal framework, requiring full one-to-one backing with high-quality liquid assets and taking full effect by early 2027\. Europe folded stablecoins into MiCA. And Singapore built one of the cleaner rulebooks: a licensed single-currency issuer can only issue stablecoins, must ring-fence customer funds, and has its reserves constrained to safe, liquid assets. That last point is where the abstract turns concrete. It's why a coin issued under the Singapore framework, USDG among them, has its reserves limited to cash and short-dated government paper rather than whatever the issuer fancies. The licence decides what can back the token. That's the whole value of "regulated": not a badge, but a rule about what your dollar is actually sitting on, enforced by someone whose job is to check. Not everyone is playing the same game. Hong Kong turned its framework live in 2025, then granted just two licences out of 36 applicants, a deliberate signal that this is a bank's game, not a startup's. Japan let its banks lead. China banned private stablecoins outright and is building a state digital currency instead. The pattern is clear: the serious jurisdictions aren't slow, they're selective. They've decided this infrastructure is too important to hand to whoever moves fastest. --- ## Our read: the dollar goes everywhere without a passport Here's the thing underneath all of it. Ninety-nine percent of stablecoins are dollars, every one backed by US Treasuries. So each time someone in Manila, Lagos or Jakarta chooses to hold digital dollars instead of their own currency, two things happen at once. They help fund the US government by adding to demand for its debt. And they deepen the dollar's grip on a corner of the world America never had to send a diplomat to. The Greeks understood this move. You don't need to breach the walls if the city carries you in itself. The dollar stablecoin is the wooden horse: a genuinely useful gift, a faster and cheaper way to move money, that also happens to plant American monetary influence inside economies that spent decades trying to build their own. It's a quiet, voluntary, phone-shaped expansion of the dollar, winning precisely because it's useful. Here's the twist worth sitting with. The rails for that dollar increasingly run through Asian and European licences, not American ones. Some of the newest regulated dollar coins are issued out of Singapore, under Singapore's regulator. The dollar is going global, but the rulebook it travels on is being written in Singapore, Brussels and Tokyo as much as in Washington. Whoever writes that rulebook shapes how the next trillion dollars of digital money behaves, and that's a quieter kind of power than issuing the currency itself. My position, and I'll hold it: the winners of the next decade won't be the fastest issuers or the flashiest chains. They'll be the ones that pair a currency people actually want to hold with a licence people can actually trust. The dollar got a ten-year head start on demand. Trust is the axis still being contested. Everything else is noise. --- ## What to actually do with this **Treat the coin as an IOU, and check who's behind it before you park anything real.** Before you hold a stablecoin worth more than lunch money, confirm three things. Who issues it, and under which licence. Where the reserves sit, and whether there's a real, recent attestation of them. And whether the issuer is on an official register you can check yourself, like a monetary authority's licensed-issuer list. If you can't answer those three, you're not holding a dollar. You're holding a promise from a stranger, and the history of stablecoins is a graveyard of strangers' promises. The token is easy. The trust is the whole game. For the first time, "licensed" now means something you can verify. Use it. --- *Disclosure: I work on the infrastructure side of this industry, building custody and settlement rails across Asia, and that work touches USDG's issuer. I flag it because you should know it, and because it's the same reason I can tell you how the plumbing actually works. I've held USDG here to public facts and to the same bar as every other coin named. Judge the argument, not the badge.*