jakiro
Author: Alex
If you stand on the streets of Buenos Aires or the electronic market of Lagos, you will notice a strange phenomenon:Local people’s trust in their own currency has dropped to freezing point, and the App that displays the balance of “USDT” or “USDC” on their mobile phones has become the last line of defense for their asset security.
At the same time, financial elites around the world are staring at the thrilling K-line chart on the screen——It’s not the sudden rise and fall of Bitcoin, but the stablecoin that is said to be “always equal to 1 US dollar” and returns to zero in an instant..
This is the true portrayal of the stablecoin market in 2025:Extreme prosperity coexists with extreme fragility.
According to statistics, the on-chain settlement volume of stablecoins throughout 2024 hasBreaking through 27 trillion U.S. dollars, this number even exceeds the sum of the two major card organizations, Visa and Mastercard.Stablecoins are no longer an accessory to cryptocurrency transactions. They have quietly become the “shadow blood vessels” of global finance.However, the serial thunderstorms of xUSD and deUSD, as well as the iron-fisted supervision of the US GENIUS Act, are pushing the industry into a period of violent reshuffle.
01When “stability” becomes a lie
In the crypto world, “stability” is often the most expensive illusion.The Stream Finance (xUSD) and Elixir (deUSD) crises that broke out in the second half of 2025 have taught all those who are superstitious about “DeFi Lego bricks” a painful risk lesson.
xUSD vs. deUSD: A $93 Million Black Box Game
If the collapse of Terra in 2022 was due to the ego of the algorithm, then the destruction of xUSD in 2025 was due to the greed of human nature.
xUSD claims to be an “income-based stablecoin”, and its selling points are very attractive:When you hold it, not only the currency value is stable, but you can also earn high interest.But where does the interest come from?Stream Finance claims to earn through complex arbitrage strategies.However, it was not until November 2025 that the fig leaf was pulled off – the protocol entrusted a large amount of user funds to an off-chain external fund manager for trading, and the manager lost a full $93 million in OTC transactions.
The investigation showed that Stream Finance quadrupled the principal amount of US$160 million through revolving lending.When losses occurred, there was no cushion and the xUSD price plummeted from $1 to $0.24 in 24 hours.
The disaster didn’t stop there.deUSD issued by the Elixir protocol was instantly dragged into the abyss because it accepted xUSD as core collateral.It was like a domino, and when the first card fell, the whole system made a shattering sound.The market value of deUSD evaporated by US$100 million, and the savings of countless investors were wiped out.
Ethena (USDe): Dancing on a tightrope
Compared with the brutal collapse of xUSD, the USDe issued by Ethena showed another kind of “exquisite fragility”.USDe does not rely on bank deposits, but maintains its value through a “delta neutral strategy” (buying spot ETH while shorting an equal amount of futures).
This design is a perfect money printer in a bull market because shorting can earn funding rates.However, during the market adjustment period of 2024-2025, the funding rate frequently turned negative, which meant that Ethena not only failed to make money, but also had to pay for it to its opponents.To maintain that attractive yield, the protocol had to burn through reserves.
Although USDe has not yet collapsed, it is always facing the threat of a “death spiral”:Once there is a liquidity crisis on the trading platform, or the fee rate is negative for a long time, the mathematical balance of this synthetic dollar will be broken..It reminds the market again:There is no free lunch in the world. Behind high returns, there must be high-risk pricing..
02The Iron Curtain of Regulation: Farewell to the Era of Recklessness
If the era before 2024 is the reckless era of stablecoins, then 2025 is the first year of “recruitment” and “discipline”.With stablecoins becoming too big to ignore, the government finally took action.
In July 2025, the “GENIUS Act” signed by US President Trump was a watershed in the history of global stablecoins.The core logic of this bill is very clear:Recognize the legal status of stablecoins, but they must be included in the system of US dollar hegemony.
The most destructive provision in the bill is“Interest Prohibition”.Simply put, payment stablecoins like USDC are prohibited from paying interest directly to users.
The purpose is to protect banks. If stablecoins are as easy to use as cash and have 5% interest like treasury bonds, who will keep money in banks?This will trigger a big move in bank deposits.
What are the consequences?This clause directly kills the living space of some stablecoins that focus on “native interest-bearing” in the United States.The market is forced to differentiate:Compliant stablecoins must return to the essence of “digital cash” – zero interest, safe, and used for payment.
03invisible infrastructure
Although regulations are tightening, and although some coins are returning to zero, in the real world, the adoption rate of stablecoins is skyrocketing.The root of this contrast lies in:For many people,Stablecoins are not an option, but a survival necessity.
Noah’s Ark under high inflation
In Argentina, the annualized inflation rate once exceeded 200%.This means that if you hold pesos, your wealth is shrinking every day.For freelancers in Buenos Aires, the first thing to do when receiving their salary is to exchange it for USDT or USDC.This is no longer “investment”, but “stopping bleeding”.
In Nigeria, importers are fed up with the cumbersome and long waits (sometimes taking weeks) to apply for U.S. dollars from banks.They found that using stable currency to pay for goods can arrive in the account in a few minutes, and the handling fee is 80% cheaper than that of banks.From 2024 to 2025, Nigeria’s stablecoin transaction volume will be close to US$22 billion. Behind this is the “self-dollarization” of countless small and medium-sized enterprises in order to survive.
Payment giant’s defection
The most ironic thing is that traditional finance (TradFi), which was once the most resistant to cryptocurrencies, is now the most active promoter.
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Visa:A new feature of Visa Direct has been launched, allowing creators around the world to receive USDC wages directly in their digital wallets.
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Stripe:Acquired stablecoin infrastructure company Bridge for US$1.1 billion and fully restored crypto payments.
These giants finally saw the reality clearly:Instead of fighting a more advanced technology, make it your own underlying pipeline.They don’t care whether users believe in decentralization, what they care about is that this system is faster and cheaper than SWIFT.
04Summary
2025 marks the end of stablecoins moving from “reckless” to “orthodox”.The collapse of xUSD proved that financial innovation without transparency is ultimately a castle in the air, and the implementation of the “GENIUS Act” announced the full advent of the era of compliance.
The market is undergoing profound species evolution:High-risk algorithmic games will be marginalized and replaced by zero-interest, transparent, and regulated games like USDC“Digital cash”.They will serve as the underlying facilities for giants such as Visa and Stripe, not only serving crypto transactions, but also becoming a financial lifeboat for hundreds of millions of ordinary people in Argentina, Nigeria and other countries.
This change illustrates:The dollar is not disrupted, it simply renews itself through code.For investors, stay away from “Risk-free and high returns“The illusion of embracing real payment utility is the ticket to the future.
