Challenges and Opportunities for Forex Stablecoins Amid Tether and Circle Dominance

PANews posted on X (formerly Twitter). Forex stablecoins are currently facing challenges such as poor liquidity and susceptibility to de-pegging. Instead of focusing solely on spot issuance, a potential solution could be to emulate traditional finance by constructing 'synthetic forex' based on non-deliverable forwards (NDF) of USDT/USDC. This model, which involves holding USD stablecoins at the base while displaying local fiat currencies at the front end, retains the deep liquidity and returns of dollar stablecoins while unlocking three major commercial scenarios: 1. Empowering new stablecoin banks to create genuine multi-currency accounts. 2. Opening up large market capacity for on-chain forex arbitrage vaults, such as going long on the yen against the real. 3. Meeting the hedging needs of enterprise-level global seamless payments.