Risks and Development of Stablecoins for Settlement

DOI: https://doi.org/10.62517/jel.202614420

Author(s)

Xinyi An

Affiliation(s)

School of Management, Wuhan Textile University, Accounting, Wuhan, Hubei, China

Abstract

Stablecoins are a type of digital currency that can be pegged to a stable asset in the real economy, such as gold, the euro, or the US dollar, in the virtual world, thus having a certain purchasing power. Due to the high cross-border transaction fees and low efficiency of actual currencies in the increasingly emerging cross-border trade and offshore finance, stablecoins emerged as a solution to these problems. As a key link between traditional finance and decentralized finance, stablecoins have higher cross-border circulation efficiency in cross-border trade, can better adapt to the digital economy, and have traceable transfer trajectories. Although stablecoins have shown great advantages in the above aspects, their dependence on blockchain and other technologies, the mismatch with the existing regulatory framework, coupled with the increased likelihood of implementation, has significantly hindered its adoption in China. Therefore, this paper studies the development space of stablecoins in China from aspects such as policy and application scenarios. By comparing the regulatory approaches and operational models of the United States and Australia, it constructs a stablecoin risk prevention and control system that suits China's national conditions, from improving the regulatory mechanism and promoting the pilot process of stablecoins in the real economy, providing ideas for the use of stablecoins in settlement risks, development, and countering the hegemony of US dollar stablecoins.

Keywords

Stablecoin; Regulatory Approach; Cross-Border Trade; US Dollar Hegemony

References

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