Stablecoin Wars 2025: The Era of Digital Dollars Threatening Physical Currency

As of July 2025, Bitcoin is worth approx.$117,250, which is the highest this month. $122,852It is close to that level.
The market conditions, where prices fluctuate by thousands of dollars in a short period of time, are yet another reminder that cryptocurrencies still experience extreme volatility.

While traditional cryptocurrencies, including Bitcoin, are still providing investors with both great profits and anxiety, On the one hand, new digital assets that pursue opposite values are quickly gaining attention.
That's right, it's a *'stablecoin'*, designed with the goal of *maintaining a stable value.

Unlike Bitcoin, which has a volatile price, stablecoins are pegged to a *fiat currency (usually the US dollar)*.
It enables stable transactions without volatility and is emerging as the *'digital dollar'* of the cryptocurrency ecosystem.

And now, in 2025, we are witnessing a new trend.
*In the contrasting structure of 'unstable cryptocurrency vs. stable stablecoin'* A *hegemony battle* between stablecoins that are growing fast enough to threaten fiat currencies is in full swing.

1. Why Stablecoin Now?

By mid-2025, the cryptocurrency market is hot again.
Bitcoin is attracting the attention of investors around the world as it hits a high of over $110,000, but on the other hand, it is emerging as a stable asset with low volatility. StablecoinThis started a quiet war.

In real-world usage environments such as blockchain-based services, DeFi, games, and global remittances, A coin with a fixed 1:1 value like fiat currencyThe demand for is growing explosively.

Stablecoins are no longer just “auxiliary currencies”. A key component of the global financial infrastructureis evolving.

2. Cryptocurrency surge and physical currency instability

Bitcoin’s recent surge is not just a market phenomenon.
In July 2025, the US Congress is discussing cryptocurrency-friendly legislation such as the 'Genius Act', and the Trump camp is stimulating the market by putting forward the expansion of cryptocurrency acceptance as a presidential election promise.

As a result, Bitcoin High above $122,000As the market takes a hit, market participants are weighing the prospect that “this is now the era of the digital dollar.”

On the other hand, there are also worrying signs in the traditional financial system.
Central banks of each country CBDC (Central Bank Digital Currency) Development is in full swing, with testing completed or deployment underway in Korea, Japan, Europe, Australia, and even Brazil and Nigeria.

This reflects a sense of crisis about the reliability of real money, Future possibilities of stablecoinsIt is also a trend that supports this.

👉 Next Stablecoins that are emerging nowLet's find out what they are and what technology and philosophy they are using to enter the market, in addition to the existing USDT and USDC.

3. Emerging stablecoins

As of 2025, the stablecoin market is rapidly expanding with various projects emerging in addition to existing powerhouses such as USDT and USDC.
As new stablecoins with different purposes and technical characteristics emerge, the range of choices for users expands.

Below are some notable new and mid-sized stablecoins as of 2025.

• PYUSD (PayPal USD)
  – A stablecoin issued by PayPal, optimized for global e-commerce and remittances.
  – It is closely integrated with the PayPal platform, providing excellent user accessibility.
  – It maintains a 1:1 USD peg and is gaining attention as a payment method linked to real currency.
• SG-FORGE USD
  – A regulation-friendly stablecoin developed by French financial conglomerate Société Générale.
  – A model that combines the stability of traditional financial institutions with the transparency of blockchain, making it suitable for financial products targeting institutional investors.
  – Boasts strict compliance with the regulatory environment within Europe.
• Ethena USDe
  – An Ethereum-based stablecoin that boasts fully decentralized governance and smart contract transparency.
  – It is rapidly gaining popularity in the decentralized finance (DeFi) community and supports full on-chain auditing.
  – Primarily used in DeFi protocols and NFT marketplaces.
• FEI Protocol (FEI)
  – An algorithm-based stablecoin that maintains price stability through protocol design without collateral.
  – It regulates liquidity according to market demand in a decentralized manner and is linked to its own governance token.
  – Although it has a somewhat high volatility risk, it is attracting attention as an innovative model.
• TerraUSD Classic (USTC)
  – The former version of TerraUSD (UST) after the foundation rebranding.
  – Designed as an algorithmic stablecoin, but is being reorganized following the 2022 crash.
  – Restoring investor confidence and stabilizing the network are emerging as key tasks.
• FRAX
  – Partially collateralized and algorithmic hybrid stablecoins.
  – We pursue price stability by adjusting the collateral ratio according to market conditions.
  – It is based on the Ethereum network and is widely used in DeFi.
• TUSD (TrueUSD)
  – A stablecoin that is regulated and regularly audited to ensure it holds 1:1 fiat currency reserves in the United States.
  – Listed on various exchanges and DeFi platforms, prioritizing transparency and reliability.
• BUSD (Binance USD)
  – A stablecoin jointly issued by Binance and Paxos, two of the world’s largest exchanges.
  – Fully pegged to the US dollar and works with regulators to ensure transparency.
  – Actively used as a means of payment and trading within the Binance ecosystem.
• USDN (Neutrino USD)
  – An algorithmic stablecoin that operates on the Waves platform.
  – It uses WAVES tokens as collateral and attracts investors by offering a profit sharing model.
  – It is attracting attention as a model that emphasizes profitability despite the risk of volatility.
• USDP (Pax Dollar)
  – A fiat currency-collateralized stablecoin issued by Paxos.
  – We ensure transparency of reserves through regular external audits and are trusted by both institutional and individual investors.
  – Widely adopted in financial institutions and cryptocurrency exchanges.

In this way, the stablecoin ecosystem is becoming more specialized beyond simple “dollar peg” based on the issuer of each coin, its technical structure, regulatory compliance, and how it is used within the ecosystem.
Users now have a variety of choices to suit their purposes and environments.

Next, we will look at how central banks and traditional financial institutions around the world are responding to the proliferation of these stablecoins.

4. Responses of central banks and existing banks in each country

The rapid growth of stablecoins and digital assets poses significant challenges to central banks and traditional financial institutions.
In response, many central banks have CBDC (Central Bank Digital Currency) We are promoting issuance and accelerating the digitalization of the existing financial system.

The U.S. Federal Reserve is deepening its research on the digital dollar and conducting various tests with the goal of piloting a CBDC by 2025. In addition, the Fed is also moving to strengthen regulations on stablecoins.
We strive to enhance market stability and financial system security.

The European Central Bank (ECB) has also begun full-scale preparations for the issuance of a digital euro, with a large-scale pilot program planned for the second half of 2025.
This is expected to significantly transform digital payment infrastructure in Europe.

In Asia, the Bank of Korea is consistently conducting CBDC experiments, pursuing financial innovation and stability at the same time. Japan, Singapore, and Hong Kong are also showing similar movements, and international cooperation is also strengthening due to the introduction of CBDC.

Traditional commercial banks are also stepping up to strengthen their digital financial services amid the wave of change.
Banks are accelerating the development of stablecoin-linked financial products and digital asset custody services.
We aim to serve as a bridge between traditional finance and the cryptocurrency ecosystem.

In this way, central banks and traditional banks are responding to the digital financial era. Collaboration, regulation and innovationBalancing the
We strive to maintain a stable financial system.

5. Responses of the central bank and existing financial institutions

The rapid growth of stablecoins and the expansion of digital currencies are also requiring major changes in traditional finance.
Central banks around the world are accelerating the issuance of 'Central Bank Digital Currency (CBDC)', and existing banks are also actively adopting digital assets and blockchain technology.

For example, the U.S. Federal Reserve (Fed) is starting full-scale research on digital dollars, with the goal of increasing the efficiency of digital payment systems and blocking illegal financial transactions.
As of 2025, there are a number of digital dollar pilot projects and pilots underway, creating a competitive landscape with stablecoins while also exploring ways to coexist.

In addition, the European Central Bank (ECB) is also accelerating the development of a 'digital euro', and the People's Bank of China (PBOC) has already brought the digital yuan (e-CNY) to the commercialization stage, increasing the number of cases in which it is used for real-life payments and international trade.

Traditional commercial banks are also jumping into building blockchain-based payment networks, including JP Morgan’s JPM Coin, Goldman Sachs’ digital asset service, and Citibank’s digital payment platform.
They are trying to take the lead in the market by developing customized financial products between stablecoins and CBDCs.

In this way, the responses of central banks and existing financial institutions have become key variables in the changes in the financial ecosystem due to the spread of stablecoins.
In the future digital dollar era, cooperation and competition between these entities will coexist and create a new financial paradigm.

6. Trends in Korea’s Stablecoins and Financial Authorities’ Policies

Korea is also actively preparing policies related to stablecoins and CBDCs in line with digital financial innovation.
The Bank of Korea will begin full-scale research on digital won in 2024, and is currently conducting verification tests through pilot projects in 2025.
The issuance of the digital won aims to increase financial inclusion, payment efficiency, and block illegal financial transactions.

In particular, Korean financial authorities are classifying stablecoins as “virtual assets” and strictly enforcing regulatory systems such as strengthening transparency, anti-money laundering (AML), and mandating know-your-customer (KYC) verification.
Recently, through the revision of the Act on Reporting and Use of Specific Financial Transaction Information (Special Financial Transaction Information Act), regulations on stablecoin issuers and exchanges have been strengthened.

Global stablecoins such as USDT and USDC are actively traded in Korea, but obtaining approval and securing trust for domestically issued stablecoins is emerging as a key issue.
Accordingly, many fintech companies are seeking to enter the domestic market while striving to secure transparent collateral and technological capabilities in compliance with regulations.

In addition, Korea is accelerating the establishment of a digital asset ecosystem by supporting research and development of blockchain technology and cooperating with the financial sector.
With this policy support and active participation from financial institutions, the stablecoin market in Korea is expected to grow rapidly.

If you are curious about a more detailed comparison of the speed, safety, and usage of the representative stablecoins, USDT and USDC, check out the in-depth analysis and usage methods at the link below!
Stablecoin USDC vs USDT Comparison and Usage It will be easier to understand if you read it together with this article!