The milestone moment for stablecoins is approaching! Mastercard will add a "stablecoin settlement" option for merchants

According to the Zhitong Finance APP, Mastercard (MA.US), one of the largest credit card issuers and payment processors in the world, announced that it will soon provide merchants with the option to accept payments and settlements in "stablecoins," given the increasing clarity of global regulations regarding digital assets such as cryptocurrencies that are typically pegged to fiat currencies. This new initiative by Mastercard marks a milestone for stablecoins, which hold significant market value in the cryptocurrency space, indicating that stablecoins are expected to become the most mainstream payment and settlement option in global transactions in the near future.

In a recently released press release, Mastercard stated that it is collaborating with payment processor Nuvei, as well as stablecoin issuers Circle and Paxos, to facilitate payments using cryptocurrency protocols.

Earlier this year, U.S. lawmakers introduced a bipartisan bill, the "American Stablecoin Innovation and Establishment Act" (GENIUS Act), aiming to establish a regulatory framework for the U.S. stablecoin payment system. The bill was passed by a vote in the U.S. Senate committee in March and is moving forward in the legislative process. Standard Chartered Bank, in a recent report, predicted that if the bill passes, the global stablecoin market could surge to $2 trillion in the next three years.

Mastercard's press release stated, "As the global regulatory framework becomes clearer, stablecoins are evolving from purely cryptocurrency trading tools to key solutions that significantly enhance the efficiency of payments, fund disbursements, remittances, and programmability-related initiatives."

At the same time, Mastercard also announced that it is collaborating with cryptocurrency exchange OKX to launch a new electronic credit card. Mastercard has partnered with several cryptocurrency companies, including MetaMask, to provide debit cards that support cryptocurrency transactions.

Stablecoins are an extremely important category of cryptocurrency designed to maintain a long-term price consistency with fiat currencies (usually the U.S. dollar). In recent times, their primary use has been as a channel for traders to move funds in and out of other cryptocurrencies. However, an increasing number of cryptocurrency investors are optimistically believing that with the strong support for cryptocurrency development from Trump’s return to the White House, stablecoins may soon play a more significant role in the global business and trade system, particularly as a stable payment tool for cross-border payments.

Stablecoins are typically pegged to mainstream assets such as the U.S. dollar or euro, making them a key tool for cryptocurrency traders to enter and exit positions or transfer funds between platforms. For major companies seeking to transfer funds across borders and facilitate faster and cheaper digital payments, as well as for investors looking to trade and settle traditional assets like bonds using blockchain technology, stablecoins have become increasingly useful.

In just five years, the market capitalization of dollar-pegged stablecoins (such as USDT and USDC) has skyrocketed from less than $30 billion to $220 billion, with their share of the U.S. dollar M2 exceeding 0.8% for the first time; of this, approximately 85%-90% of reserves are expected to be directly allocated to short-term U.S. Treasury bonds, repurchase agreements, and cash assets, with the incremental growth comparable to the annual net purchases by foreign official sectors. Therefore, some investment institutions believe that the strong rise of stablecoins in the future may become a "hidden driver" influencing the bond market landscape Some observers of U.S. Treasury bonds indicate that stablecoins (a type of cryptocurrency pegged to the U.S. dollar) may become an important source of short-term demand for U.S. Treasuries. JP Morgan estimates that by the end of last year, approximately $114 billion of U.S. Treasuries were used as reserves for stablecoins, which, although accounting for less than 2% of the total circulating U.S. Treasuries, is growing at an astonishing rate.

Following the establishment of a compliance framework under the "GENIUS Act" and the opening of stablecoin settlements by payment giants like Mastercard, institutions such as Standard & Poor's and Standard Chartered expect the overall market value of stablecoins to potentially surge to $2 trillion within the next three years. If the current allocation ratio of over 70% in T-Bills (short-term U.S. Treasuries) continues, this would translate to an additional $1.4 trillion in structural demand for U.S. Treasuries with maturities of one year or less—approximately 40% of the U.S. Treasury's short-term bond issuance in 2023.

For U.S. Treasury Secretary Janet Yellen, who is seeking to support U.S. government debt, the rapid growth of stablecoins presents a potential solution. The strategist team at TD Securities points out that the fast growth of the stablecoin industry could become an "important player" in the U.S. money market and fixed income market