Guotai Haitong: Six Misunderstandings of Stablecoins, Their Value is Not Absolute Stability

BlockBeats News: On June 20th, Guotai Haitong Securities Research recently released a report titled "Stablecoins: How to Reshape Global Currencies and Assets", which provides a detailed analysis of the current development status, prospects, and impact of the stablecoin market on major asset classes. At the same time, it points out that stablecoins have six "misconceptions" and their value is not absolutely stable. Misconception 1: The value of stablecoins is absolutely stable. The essence of stablecoins is the credit extension of anchored assets, and their value is subject to both technical risks of detachment and fluctuations in anchored assets. Therefore, the value of stablecoins is not absolutely stable, but relatively stable. Misconception 2: All fiat currencies can issue large quantities of stablecoins. Not all currencies can issue a large number of stablecoins, and the ultimate development of different fiat stablecoins depends on the acceptance of the fiat currency itself. The fiat stablecoin that gains the widest trust will have a "winner takes all" situation. Misconception 3: Stablecoins in the US dollar will weaken the credit of the US dollar. The rapid development of US dollar stablecoins will not impact the US dollar system, but will further strengthen the position of the US dollar, as it expands the functionality and scope of use of the US dollar. However, the stablecoin of the US dollar has a greater impact on the legal tender of other countries, especially economies with large exchange rate fluctuations. Misconception 4: US dollar stablecoins are the "life-saving straw" for US bonds. The US dollar stablecoin market can only slightly alleviate the pressure on US short-term bonds, but the short-term bond market is ultimately dominated by the Federal Reserve. The stablecoin of the US dollar cannot alleviate the pressure on US long-term bonds. Overall, the impact of the stablecoin on the US bond market is relatively small. Misconception 5: US dollar stablecoins will significantly increase the supply of US dollar currency. The emergence of stablecoins in the US dollar will indeed delegate some of the issuance authority of the US dollar from the Federal Reserve to issuing companies. But as the main participant in the money supply, the Federal Reserve can still regulate the overall liquidity of the US dollar. Just like an economy with a linked exchange rate system, although there are multiple note issuing banks, monetary regulatory agencies can still regulate the money supply based on market conditions. Misconception 6: Stablecoins will drive the rapid development of the RWA market. The support of stablecoins for RWA is more reflected at the trading level, and the development of the RWA market ultimately depends on the quality of underlying assets. Currently, RWA is still in the early stages of development, and its path selection may exhibit characteristics of "credit priority" and "liquidity priority".