Amid pressure from Tether and Circle, how can foreign exchange stablecoins break through? Foreign exchange stablecoins currently face widespread challenges such as low liquidity and de-pegging risks. Rather than competing directly on spot issuance, they should emulate traditional finance by building “synthetic foreign exchange” based on non-deliverable forwards (NDFs) tied to USDT/USDC. This “underlying USD holdings + front-end display of local fiat” model preserves the deep liquidity and yield of USD stablecoins while unlocking three major commercial use cases: - Empowering new stablecoin banks to offer true multi-currency accounts. - Enabling large-scale on-chain foreign exchange arbitrage vaults (e.g., long JPY vs. short BRL). - Meeting enterprise-grade global payment hedging needs. Recommended reading👇