Stablecoin Issuers on Polygon: How Emerging Markets Are Reshaping Global Liquidity

Introduction to Stablecoin Issuers and Polygon's Role

Stablecoins have become a cornerstone of the cryptocurrency ecosystem, offering price stability and bridging the gap between traditional finance and blockchain technology. As the demand for stablecoins grows, issuers are adopting innovative strategies to meet regulatory requirements, enhance scalability, and address global liquidity challenges. Polygon, a leading blockchain platform, is emerging as a critical infrastructure provider for stablecoin projects, enabling low-cost transactions, deep liquidity integration, and scalability for issuers worldwide.

The Rise of Stablecoins in Emerging Markets

Countering Dollar-Backed Stablecoins

Emerging markets are actively reducing reliance on dollar-denominated stablecoins by developing region-specific alternatives. India, for example, is set to launch its first fully collateralized rupee-backed stablecoin, ARC, by early 2026. Developed by Polygon and Anq, ARC aims to retain domestic liquidity while countering the dominance of dollar-backed stablecoins.

Key Features of ARC Stablecoin

• Collateralization: ARC tokens will be backed 1:1 by Indian Government Securities or Treasury Bills, ensuring transparency and compliance.

• Integration with CBDC: ARC complements the Reserve Bank of India's digital rupee, creating a "twin-rupee framework" where the digital rupee handles settlement and ARC enables programmable commercial applications.

• Economic Impact: By leveraging domestic debt instruments, ARC is expected to drive demand for Indian Government Securities and strengthen monetary sovereignty.

Japan’s JPYC Stablecoin

Japan has introduced JPYC, its first yen-denominated stablecoin, backed by bank deposits and government bonds. This initiative aims to modernize Japan’s financial system, reduce foreign exchange costs, and promote stablecoin adoption in domestic payments.

Hong Kong’s Licensing Framework

Hong Kong is inviting stablecoin issuers to apply for licenses under new regulations requiring full backing by high-quality liquid assets. These measures prioritize consumer protection and financial stability, with initial licenses expected by 2026.

Stablecoin Reserve Structures and Regulatory Compliance

Evolving Regulatory Frameworks

Global regulations like the GENIUS Act in the US and MiCA in Europe are reshaping the stablecoin landscape. These frameworks emphasize full collateralization with high-quality liquid assets, pushing issuers to adopt more transparent reserve structures.

Institutional Diversification Strategies

• Tether’s Strategy: Tether has reduced its US Treasury purchases by 89% in Q2 2025, shifting reserves into Bitcoin, gold, and corporate investments.

• Regional Approaches: Japan’s JPYC stablecoin, backed by bank deposits and government bonds, offers a unique prepaid payment structure compared to dollar-backed stablecoins.

Role of Polygon in Stablecoin Infrastructure and Scalability

Polygon has emerged as a preferred blockchain for stablecoin issuers due to its scalability, low transaction fees, and robust liquidity integration. By leveraging Polygon’s infrastructure, issuers can:

• Enhance Transaction Efficiency: Polygon’s high throughput ensures seamless stablecoin transactions, even during peak network activity.

• Reduce Costs: Low fees make Polygon an attractive option for stablecoin applications in payments, remittances, and DeFi.

• Support Interoperability: Polygon’s compatibility with Ethereum enables issuers to integrate with existing DeFi ecosystems while maintaining scalability.

Dedicated Blockchains for Stablecoin Issuers

Stablecoin issuers are increasingly building dedicated blockchains to control settlement, compliance, and transaction fees. While this trend enhances operational efficiency, it may fragment activity away from established networks like Ethereum and Tron.

Impact on Ethereum

The shift toward dedicated blockchains could reduce transaction volume on Ethereum, potentially impacting its dominance in the DeFi space. However, interoperability solutions like Ubyx’s clearing system aim to bridge these gaps, enabling fiat redemption at par value and fostering stablecoin adoption.

Clearing Systems and Interoperability for Stablecoins

Ubyx, a stablecoin clearing system, is addressing barriers to mass adoption by connecting issuers with banks and fintechs. This system facilitates fiat redemption at par value, ensuring seamless integration between stablecoins and traditional banking systems.

Stablecoin Adoption in Payments, Remittances, and DeFi

Stablecoins are revolutionizing payments, remittances, and DeFi by offering faster transactions, lower fees, and enhanced programmability. Key use cases include:

• Cross-Border Payments: Stablecoins enable instant, low-cost international transfers, reducing reliance on traditional banking systems.

• DeFi Applications: Programmable stablecoins are unlocking new opportunities in lending, borrowing, and yield farming.

• Remittances: Stablecoins provide a secure and efficient alternative for sending money across borders, particularly in regions with limited banking infrastructure.

Conclusion: The Future of Stablecoin Issuers on Polygon

As stablecoin adoption continues to grow, issuers are leveraging platforms like Polygon to address scalability, compliance, and liquidity challenges. Regional initiatives, such as India’s ARC and Japan’s JPYC, highlight the transformative potential of stablecoins in modernizing financial systems and promoting monetary sovereignty. With dedicated blockchains, regulatory frameworks, and clearing systems driving innovation, the stablecoin ecosystem is poised for significant growth and global impact.