Asia's Great Counterattack: How the Rise of Our Stablecoin Will End the Dollar's Digital Hegemony

Dr. Jae S. Jeong, co-founder and Chief Technology Officer of Gurufin, published a deep analysis article stating that the current stablecoin market is overshadowed by the US dollar, with dollar-pegged stablecoins like USDT and USDC dominating global digital asset trading. However, a silent revolution is brewing among the Central Banks and financial regulatory agencies in various Asian countries, as they actively develop local currency stablecoins to break free from reliance on the US dollar and regain monetary sovereignty. This trend is not only set to reshape the financial landscape of Asia but may also disrupt the future development path of global digital currencies.

Myths and Realities of Dollar-Dominated Stablecoins

(Source: BIS)

There is a common misconception in the digital asset space that one digital currency will ultimately dominate global payments and commerce. For stablecoins, this misunderstanding supports the belief that the USD, with its strong liquidity and global standing, will become a natural stepping stone.

People generally believe that stablecoins pegged to the US dollar will inevitably become the main digital settlement layer globally. However, a closer look at the economic realities in Asia reveals a distinctly different future is taking shape: a future driven not by global ambitions, but by the actual urgent needs of local economies.

Three Major Concerns of USD Dominance

Currently, the digital asset ecosystem is indeed shrouded in the shadow of the USD. However, countries in Asia are seeking to break free from this dependence, primarily based on three key factors:

· The risk of U.S. debt is rising: With the fluctuations in trade and tariff policies, U.S. Treasury yields have soared. Non-U.S. companies and governments still hold U.S. Treasury bonds, but their assessment of the risks has changed, as evidenced by the increase in Central Bank gold reserves.

· Allies Reassessing: From Europe to Southeast Asia, America's allies are rethinking the benefits of linking their trade and monetary policies to the United States. The lessons of the Asian financial crisis remain vivid, when the crisis was triggered by a mismatch between Asian companies borrowing in USD and earning revenue in their local currencies.

· Monetary Policy Autonomy: Monetary policy must serve local economic growth. By adopting a USD stablecoin, central banks in emerging economies will lose the ability to use exchange rates as a tool to absorb external shocks, especially when external shocks are contrary to the U.S. economic cycle.

Asia Stablecoin Revolution: Case Studies from Various Countries

Emerging economies in Asia are actively leveraging the demand for stablecoins to strengthen their local currency. Multiple countries have begun to take concrete actions:

Singapore: Regulatory Pioneer

The Monetary Authority of Singapore has finalized a regulatory framework for single-currency stablecoins. This clear licensing pathway supports the issuance of stablecoins pegged to the Singapore Dollar, allowing corporate treasurers to:

· Conduct commercial payment settlements faster and cheaper.

· Simplify the cross-border payment process within the region

· Maintain control over the domestic financial system

Japan: Bank-led Innovation

Japan's latest "Payment Services Act" allows banks and licensed trust companies to issue yen-backed stablecoins. To this end:

· SBI, Circle, Ripple, and Startale recently announced plans to jointly launch a stablecoin backed by the Japanese yen.

· Monex and local fintech company JPYC are also planning to launch a local stablecoin.

Philippines: Addressing Real Pain Points

For the Philippines, stablecoins are a direct solution to the high costs and slow issues of the monthly $3 billion remittances:

· Small business owners can now accept payments from overseas clients using regulated stablecoins.

· Bypass card network fees immediately

· Receive funds in minutes instead of days.

The Strategic Value of This Stablecoin

By developing and regulating their own stablecoins, central banks in Asia can maintain control over their financial systems and actively shape a digital future rather than merely responding passively. This model can be replicated in the Asian deep trade corridor to establish an interconnected stablecoin network, accelerate settlement speed, and reduce dependence on the US dollar in intra-Asian trade.

For businesses of different scales, the benefits brought by this stablecoin include:

Large trading companies: Reduce friction in the flow of goods and capital between Asian enterprises.

Local merchants and small to medium-sized enterprises: Bypass the costs and settlement risks of traditional card networks.

Central Bank: Maintain the independence of monetary policy to better respond to local economic fluctuations.

The Diversified Future of Stablecoins

From Pakistan to South Korea, central bank governors and financial regulatory authorities in various countries are working hard to think about how to safely introduce the essence of stablecoin innovation into their national economies, while also preventing dollarization from becoming an inevitable result.

Innovation lies in building a more完善的system, rather than merely replicating old systems. Asian financial policymakers can:

· Separate the fast payment channel from reserve assets

· Reserve space for monetary policy formulation

· Focus on high-value intra-Asian payment corridors

The future of diversified stablecoins has not yet fully formed, but countries in Asia have already begun to take active steps to challenge the dominance of the US dollar in the digital currency realm. The result of this silent revolution could be a more diverse and resilient global digital financial system, rather than a unipolar world dominated by a single currency.