The second wave of stablecoins: 5 new common sense we need to know

Stablecoins are digital tokens pegged to fiat currencies (primarily the USD), functioning as standardized smart contracts, distinct from CBDCs (central bank digital currencies).
The Trump administration opposes CBDCs, viewing them as a threat to individual freedom, while supporting stablecoins for reinforcing USD hegemony; the EU and China favor CBDCs and regulate stablecoins skeptically.
The U.S. regulatory framework integrates stablecoins into the existing dollar system, intensifying market competition, with major players like World Liberty Financial and Fidelity Funds entering the space.
Stablecoins excel in cross-border transactions due to speed and programmability, surpassing traditional systems like SWIFT, with annual settlement volumes now double Visa's network.
The first wave (2018–2019) saw most stablecoin projects fail (except USDC) due to neglect of liquidity networks and user experience; the second wave prioritizes these alongside regulatory clarity.
New projects like USD1 (World Liberty Financial) and Fidelity's upcoming stablecoin will dominate, alongside emerging opportunities in decentralized yield farming (YT) and infrastructure investments.
Infrastructure projects include liquidity support (e.g., Curve Finance, Perena) and new use-case platforms (e.g., Huma Finance), with the latter being more accessible for retail investors.

Stablecoins are tokens whose prices are anchored to legal tender (basically the US dollar). Their essence is a set of standardized smart contracts. Stablecoins are not legal tender, let alone CBDC (central digital currency).

The Trump administration explicitly opposes CBDC, believing that CBDC will strengthen public power and undermine the integrity of individual freedom, while it is friendly to stablecoin policies and believes that stablecoins are conducive to strengthening and consolidating the hegemony of the US dollar. The EU and China support CDBD and are unfriendly to stablecoin regulation.

Under the US stablecoin regulatory framework, the stablecoin network will be deeply integrated into the existing US dollar system. This will lead to an unprecedented fierce market competition in the stablecoin track. World Liberty Financial and Fidelity Funds have already entered the game.

At present, the main functions of stablecoins are value storage, transaction medium, and payment. The effectiveness of these functions is basically inherited from the legal currency to which they are anchored. The characteristics of stablecoins, such as fast confirmation and programmability, make the efficiency of stablecoins in cross-border circulation/clearing and settlement far exceed the SWIFT system of legal currency. The total annual settlement scale of stablecoins is now twice that of the Visa payment network.

During the first wave of stablecoins from 2018 to 2019, project developers focused on licenses and assets, while ignoring the liquidity network effects and user experience of stablecoins, resulting in the failure of almost all stablecoin projects except USDC.

In the second wave, as the regulatory framework for stablecoins in the United States is about to be clarified, licenses are no longer the highest priority. Naturally, the priority of asset scale, liquidity network effect and user experience has increased.

In addition to stablecoin projects of the "child of destiny" level such as World Liberty Financial's stablecoin USD1 and the stablecoin to be launched by Fidelity Fund, a large number of new stablecoin projects will emerge.

This second wave of stablecoins provides ordinary people with two main investment opportunities: one is the YT Yield Farming of the decentralized CDP stablecoin protocol, and the other is an ambush stablecoin infrastructure project.

The former is relatively professional, while the latter is relatively brainless. Therefore, it is more suitable for everyone to ambush stablecoin infrastructure projects.

Stablecoin infrastructure projects are divided into two categories, one is liquidity support projects @CurveFinance and @Perena, and the other is new application scenario projects for stablecoins @humafinance