When it comes to stablecoins, many people are still a bit confused. In fact, it's not complicated to understand — a stablecoin is a tokenized form of the US dollar, essentially the same as the digital RMB in your Alipay.

I transfer one yuan to your Alipay, and what you receive is a digital certificate. Similarly, when I transfer one dollar to a stablecoin platform, I get an additional USDT certificate in my wallet. The logic is completely the same.

Stablecoins indeed have a natural advantage in international transactions. By bypassing the banking systems of at least two countries, the transaction time is reduced from days to minutes, and the costs are lower. This is a game-changer for multinational business.

That said, why does the RMB stablecoin have little prospect? Because the RMB itself has limited recognition in the international market, making it even harder to promote a stablecoin version of the RMB. Other countries and regions will not embrace a currency that is only recognized within a small scope.

But there are risks hidden within. The credit foundation of stablecoins is the issuing company, not the US government. If a stablecoin company were to act maliciously, issuing an unlimited amount of coins without real reserves, it could swallow the liquidity of the entire cryptocurrency market, and the consequences would be unimaginable.

Why isn't anyone particularly worried in the market? Simply put, Tether (the issuer of USDT) can make money while lying down. You transfer one dollar to them, and they deposit that dollar in a bank or buy government bonds, earning stable income from interest every year. Currently, the scale of USDT issued by Tether is about 170 billion dollars, and they can earn over 10 billion just from interest every year. This business is even more comfortable than traditional banks; banks have to work hard to lend out money to earn interest spreads, while they don’t have to go through such trouble at all.

It is precisely because the profits are so substantial that damaging one's own credit is not worthwhile. Who would destroy this money-making tree out of momentary greed?

However, this potential risk always looms there.