--- title: "The Reshaping of Cross-Border Payment Systems Under the Full Penetration Hypothesis of USD Stablecoins" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/30421940.md" description: "Premise: The United States has passed the "Payment Stablecoin Regulation and Custody Act" (hypothetical name), providing comprehensive requirements for dollar stablecoin pegged assets, issuer capital, and bankruptcy isolation mechanisms. As a result, the market has formed a high consensus on the credit and convertibility of mainstream dollar stablecoins (hereinafter referred to as USD-S), which far surpass traditional wire transfers and credit card networks in terms of fees, speed, programmability, and other experiential dimensions. For the sake of discussion, dollar-denominated tokens pegged at 1 USD-S≃1 USD with 100% reserves are uniformly referred to as "dollar stablecoins"..." datetime: "2025-06-06T05:10:34.000Z" locales: - [en](https://longbridge.com/en/topics/30421940.md) - [zh-CN](https://longbridge.com/zh-CN/topics/30421940.md) - [zh-HK](https://longbridge.com/zh-HK/topics/30421940.md) author: "[老板的老板 AI Exec](https://longbridge.com/en/profiles/123.md)" --- # The Reshaping of Cross-Border Payment Systems Under the Full Penetration Hypothesis of USD Stablecoins > **Premise**: The United States has passed the 'Stablecoin Regulation and Custody Act' (assumed name), providing complete requirements for the anchoring assets of USD stablecoins, the capital of issuing institutions, and bankruptcy isolation mechanisms. As a result, the market has formed a high consensus on the credit and convertibility of mainstream USD stablecoins (hereinafter referred to as **USD-S**), and in terms of fees, speed, and programmability, it far surpasses traditional wire transfers and credit card networks. For the sake of discussion, the following will uniformly refer to USD-denominated tokens anchored at 1 USD-S≃1 USD with 100% reserves as 'USD stablecoins'. Reminder: The most important conclusion of this article is in the last sentence! * * * ## **1\. Legal and Financial Structure: How USD Stablecoins 'Lock' Underlying USD** **Link** **Traditional USD** **USD-S under the Stablecoin Act Framework** **Issuance End** Commercial banks issue deposits or monetize US Treasuries led by the Federal Reserve Issuer receives customer USD → Custody in **qualified reserve accounts** (Fed Master Account or FDIC-insured commercial banks) → Simultaneously minting on-chain **Reserve Ownership** Deposits can be re-loaned, M2 multiplier expansion Reserves **100% entrusted isolation** cannot be re-loaned, can be invested in T-Bill, RRP, and other extremely low-risk assets **Redemption Process** Interbank clearing or CHIPS / Fedwire Burn USD-S → Issuer instructs custodian bank/money market account to wire USD to user **Key Points**: **USD base currency** always remains within the US regulatory vision; what circulates on-chain is merely USD debt certificates. Any offshore entity wishing to exchange USD-S back to physical USD must **reverse flow** back to the issuer's custodian bank account. * * * ## **2\. User Experience Driven 'Full Stablecoinization' Scenario** **Fees and Speed**: Typical wire transfer (SWIFT + CHIPS) charges 25–50 USD+, takes 1–2 days to arrive; USD-S on-chain fee <0.001 USD (Layer-2 or sidechain) + instant arrival. **Programmable**: Supports smart contract automatic settlement, trade finance pledging, real-time debt management. **Network Effect**: When leading payment service providers, cross-border e-commerce, and shipping platforms all default to accepting USD-S settlement, currency network externalities drive **on-chain channels to become the main route**. **Assumption**: By 2030, over 80% of global USD-denominated B2B/B2C online transactions will adopt USD-S, with traditional fiat wire transfers becoming a niche backup channel. * * * ## **3\. Migration of Payment Channels for Chinese Foreign Trade Enterprises** ### **3.1 Current Model** `graph LR Buyer (USD account) -->|SWIFT/Card | Overseas Bank --> Chinese Receiving Bank -->| Settlement and Sale | PBOC/Foreign Reserves` **USD Clearing** falls on **CHIPS** & **FEDWIRE**; Chinese banking industry obtains USD positions through correspondent banks and foreign exchange bureau approved quotas; After corporate settlement, the central bank increases **official foreign exchange reserves**. ### **3.2 USD-S Model** `graph LR Buyer--> | On-chain Payment | Exporter Wallet Exporter --> |OTC/Platform Exchange | Chinese Financial Institution --> | Off-chain Redemption or Secondary Circulation | Stablecoin Issuer Custodian Account` **USD base currency** remains locked in the custodian account; If Chinese domestic financial institutions cannot or do not wish to redeem, **domestic USD fiat inflow will significantly decrease**; If exporters need RMB, there are three paths: **Domestic OTC merchants/banks** purchase USD-S with RMB → they hold stablecoins; **Overseas peers** purchase USD-S with USD fiat → pay RMB to exporters (cross-border payment license), essentially still bypassing traditional USD flow; **Secondary market** (DeFi, exchanges) sell to exchange USDT/USDC-RMB counterparties, then withdraw. > **Core Difference**: USD cash positions no longer necessarily flow into the Chinese banking system; instead, they are replaced by on-chain tokens suspended in domestic wallets. * * * ## **4\. Potential Impact on China's Foreign Exchange Reserves and Banking System** **Dimension** **Traditional Model** **Changes after Full Stablecoinization** **Impact Intensity** **Official Foreign Exchange Reserves** Goods surplus + capital inflow converted to reserves through settlement and sale Export USD-S **does not increase** reserves unless redeemed ★★★★ **Commercial Bank USD Positions** Funds pool from exporter settlement and sale, foreign capital deposits Decrease. If banks do not hold USD-S / have no redemption channels, USD sources shrink ★★★ **Exchange Rate Formation** Interbank foreign exchange market + CFETS USD-S-CNY OTC market may emerge → **onshore/offshore/on-chain** three prices coexist ★★★ **Capital Control Effectiveness** Regulate 'funds entry and exit gates' + bank reporting On-chain point-to-point transfers difficult to completely block; need on-chain address regulation ★★★★ **Money Multiplier** Foreign exchange settlement → base currency → M2 If foreign exchange settlement decreases, PBOC base currency issuance mechanism needs adjustment ★★☆ * * * ## **5\. Response Loop: RMB and USD-S Exchange Mechanism** **Domestic Compliance 'Stablecoin Settlement Bank'** Approved to open **USD-S redemption agency account**; Holding coins is a custody certificate, can be exchanged for USD from the issuer and sold to the central bank or enterprises through the interbank market. Need **US side** to provide KYC/AML exemption or mutual recognition agreement, realistic political feasibility is questionable. **Central Bank Digital Currency (e-CNY) x Stablecoin Bridge** Design **inter-chain atomic exchange protocol**: Exporters directly exchange USD-S with domestic institutions on-chain for e-CNY; US reserve funds still remain in the issuer's custodian account, but **e-CNY is injected into domestic circulation**; PBOC's USD reserves also have no increment, need to supplement through other channels (foreign debt, investment income). **Offshore Clearing Center** Allow Chinese banks to establish USD-S clearing pools in **Hong Kong/Singapore**; Complete redemption through the regulatory bridge between the Hong Kong Monetary Authority and the Federal Reserve, and then adjust onshore USD positions. * * * ## **6\. Global Financial System Linkage Effect** **Participants** **Profit / Loss** **US Treasury & Federal Reserve** Issuers reserve large amounts of T-Bill → **low-cost financing expansion**; foreign reserves 'return flow lock-in' consolidates USD hegemony **Stablecoin Issuers** Earn reserve interest spread + on-chain network effect, becoming 'shadow bill stable pool' **Emerging Market Central Banks** If export settlement is dollarized → reserve growth slows; monetary policy **independence challenge** intensifies **International Payment Giants** VISA, Mastercard compete to go on-chain; profit structure shifts from interchange fees → on-chain gateway fees **Cross-border Underground Banks** On-chain anonymous P2P usage rate rises; AML/KYC impacts regulatory gray areas * * * ## **7\. China's Policy Options and Strategic Considerations** ### **7.1 Regulatory Level** **On-chain USD Stablecoin Identification and Graded Management** Introduce **'permission whitelist'**: Only allow compliant stablecoins to enter the onshore secondary market. Implement **address labeling + real-time monitoring**, referring to FATF 'Travel Rule'. **Mandatory Settlement and Sale New Rules** Require **export enterprises** to declare & choose settlement or custody within a certain period after receiving USD-S; Unsettled USD-S can be listed as **foreign debt or offshore assets**, improving cross-cycle regulation transparency. **Cross-border Data and Payment License Linkage** Any domestic node operating USD-S/DeFi corresponding front-end needs to obtain **cross-border payment pilot license**; Connect to the central bank's anti-money laundering system, included in the foreign exchange bureau's capital project management. ### **7.2 Market-oriented Countermeasures** **Goal** **Possible Measures** **Expected Effect** **Stabilize Foreign Reserves** \- Increase **settlement incentives**: foreign exchange swaps, tax and fee reductions - Encourage exporters to use USD-S to purchase overseas stocks and bonds → central bank hedging Incremental transfer back to official reserves or enhance the diversity of offshore assets **Expand RMB Usage** Promote **CNY pricing + e-CNY settlement** in foreign trade contracts; counter USD-S with **cross-border e-CNY** convenience Reduce dependence on the USD system **Strengthen Local Technology Stack** Develop **alliance chain + smart contract** clearing network, support multi-currency atomic swaps Form a parallel 'East Data West Calculation' payment track with USD-S * * * ## **8\. Conclusion** **The experiential advantages of USD stablecoins** may pull a large amount of global USD-denominated trade from SWIFT/CHIPS to public chains/custody chains; For China, **sharp reduction in USD fiat inflow** means weak growth in official foreign reserves, shrinking bank USD liability pools, and consequently impacting RMB exchange rate management and base currency issuance logic; **Capital control and AML systems face new technological challenges**, need to compensate through on-chain address regulation, permission whitelists, mandatory settlement and sale reporting; The long-term strategy is to **enhance the network effect of RMB and e-CNY**, build compliant exchange hubs for USD-S domestically and abroad, and strive for discourse power in the global multi-polar clearing pattern. > **Key Judgment**: Stablecoins have locked the 'anchor' of USD assets, amplifying USD financial potential; if the digitalization and clearing convenience of the local currency are not simultaneously enhanced, **China's trade surplus may still 'earn USD but not touch USD'.** Therefore, 'digital RMB + compliant stablecoin exchange' and 'strengthening foreign exchange cross-cycle regulation' will become unavoidable policy tools. ### Related Stocks - [CRCL.US](https://longbridge.com/en/quote/CRCL.US.md) ## Comments (9) - **丁真！寄 · 2025-06-06T05:29:11.000Z · 👍 1**: The advantage is that the local currency does not need to flow out, while maintaining its liquidity🤔 - **老板的老板 AI Exec** (2025-06-06T06:52:36.000Z): You're right!!! This is truly killing two birds with one stone. - **韩跑跑的交易员Luka** (2025-06-07T15:40:48.000Z): Great for the US dollar, but not so good for the Chinese yuan. - **丁真！寄 · 2025-06-06T05:20:24.000Z · 👍 1**: Hong Kong's stablecoins are the most distinctive ✓😂 - **小陈同学爆赚 · 2025-06-06T05:16:19.000Z · 👍 1**: Boss, did you manage to get it yesterday? I stayed up late refreshing but it was still suspended. - **老板的老板 AI Exec** (2025-06-06T05:17:21.000Z): No. Too sleepy. Going to sleep. I bought some altcoins about stablecoins on bn. Hmph. - **小陈同学爆赚** (2025-06-06T05:18:12.000Z): 👍👍👍 Boss is awesome, I went to sleep when the trading halt was still at 1.30, just not meant to be. - **yyj421** (2025-06-06T06:35:02.000Z): I saw it at around 1:00, and it was already around 88, so I didn't buy it.