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#Stablecoin Over the past two days, something very interesting happened: the video game and tech giant Sony Group plans to issue a USD-denominated stablecoin next year, to be used inside its digital ecosystem for buying games and anime. Leaving aside the fact that Japan already has a stablecoin regulatory framework, the question is whether it’s meaningful that Sony is not issuing a stablecoin in Japan, but is instead choosing the United States. But at the very least, Sony’s move shows one thing clearly: the stablecoin market is continuously expanding. Whether inside crypto or across the global financial landscape, this is a major trend. You should know that Sony as early as 2021 participated in the $30 million Series A of the NFT marketplace MakersPlace, kicking off early exploration of NFT technology applications in the music field. Afterwards, it expanded exploration across multiple areas including NFT issuance, game development, crypto trading service platforms, Layer2, Meme, and more. And even for a company that pioneered crypto exploration like this, it ultimately still moved into the stablecoin camp. Logically speaking, the accelerated global penetration of stablecoins is a good thing for the crypto industry — it can push the development of the crypto ecosystem. But another question follows: a professional issue that once existed only inside the crypto circle is now being repeatedly mentioned by the IMF, central banks, multinational corporations, and legislative bodies — will stablecoins weaken a country’s monetary sovereignty? In the past few years, stablecoins have gradually evolved from an “alternative payment tool” into infrastructure that cannot be ignored in the global financial system. Mobile internet and non-custodial wallets allow them to enter ordinary people’s lives in every country faster and at lower cost than any foreign currency. In many emerging economies and high-inflation countries, they have even become the primary driver of “shadow dollarization.” And when the IMF publicly warns in its latest report about the potential “currency substitution” risks of stablecoins, when multinational giants like Sony begin proactively issuing USD stablecoins, and when regulators in various countries rapidly propose restriction plans, a sharper question emerges: stablecoins are not tools of the crypto industry — they are a force reshaping the global financial order. Whoever controls stablecoins controls the next generation of international financial influence. So, will stablecoins really weaken monetary sovereignty? Or is this merely a technological migration that cannot be stopped? Stablecoins Are Accomplishing What Traditional Foreign Currencies Never Could: Entering Every Country at Internet Speed For monetary sovereignty to weaken, the prerequisite is that domestic currency usage shrinks while foreign currency substitution rises. In the traditional financial era, pushing substitution required extremely high barriers: ✔ bank FX accounts ✔ cross-border clearing systems ✔ custody of physical assets ✔ FX regulatory approvals But stablecoins flatten all of these barriers. Today, a user living in Latin America, Africa, the Middle East, or emerging Asian countries only needs: a smartphone a non-custodial wallet (such as MetaMask, Trust Wallet) a download entry to immediately use USD stablecoins — no bank, no review, no capital-control access approval. Do you know what this means? It means: the dollar enters the world as an internet protocol, not through banking systems. Therefore, it is no longer constrained by: local banking systems FX controls capital flow restrictions government monetary policy This “technology bypasses regulation” characteristic makes stablecoins naturally carry a “currency substitution effect,” especially strongly in the following regions: South America (Argentina, Venezuela): stablecoin substitution rates for local currencies rise rapidly Middle East / North Africa: high-inflation countries prefer using USDT as a store-of-value asset Southeast Asia: cross-border freelancer payments heavily use USDC, USDT Sub-Saharan Africa: mobile payments are widespread, and USDT becomes a savings asset for young people This is exactly why the IMF emphasizes in its report: stablecoins are even easier than the dollar itself to enter a country, and this phenomenon is the first of its kind in history — and that is the fundamental source of the monetary sovereignty dispute. The Success of Stablecoins Comes From the “Failure” of Traditional Financial Systems To discuss “whether sovereignty is weakened,” you must first answer: “why can stablecoins become so popular?” Fundamentally, what stablecoins replace is not fiat currency, but rather: outdated payment systems, expensive cross-border procedures, poor inflation management, and slow, inefficient monetary transmission mechanisms. Therefore, the rise of stablecoins has deep inevitability, rather than being “artificially pushed by crypto technology.” 1. They solve the most universal global pain point: cross-border payments Migrant workers, freelancers, outsourcing industries, esports industries, remote hiring — all are constrained by: high SWIFT fees long clearing times strict reviews small-value cross-border transfers being nearly impossible Stablecoins achieve: 24/7 settlement near-zero fees no threshold global reach For users, choosing stablecoins is not financial speculation — it is: a superior technical path. 2. They function as an “escape route” in high-inflation countries When a country’s inflation reaches double digits or higher, residents converting local currency into USD is instinctive, but in the past this required black markets or underground banks. Now? You only need an address. This naturally reduces demand for the local currency, and monetary sovereignty gets diluted. 3. They also respond to the need for storing value In most emerging countries, local currency is not a savings tool — it is a “container of rapidly shrinking purchasing power.” If the national situation is worse, you can even feel inflation viscerally. What does that mean? For example, you can still buy a cup of coffee with this 5 units of money in the morning, but by the afternoon you must spend 6 units — this is the importance of inflation resistance and devaluation resistance. Until stablecoins appeared, they allowed users in these emerging countries for the first time to have: an inflation-resistant, devaluation-resistant, freely transferable savings method that does not depend on banks — this is a reality that hardly any local currency can replace. Multinational Corporations Are Abandoning Local-Currency Ecosystems: The Logic Behind Sony Choosing Only a USD Stablecoin Let’s use Sony as an example to understand the broader trend of multinational corporations building stablecoin ecosystems. Sony’s choice carries symbolic meaning: Japan already has a stablecoin framework, but Sony does not choose JPY and instead goes to the U.S. to issue a USD stablecoin. Behind this action is the result of global companies voting with their feet: companies do not want to operate in highly restrictive local-currency stablecoin systems, but are willing to run global ecosystems under USD stablecoin regulation. Why? 1. JPY stablecoin restrictions are too heavy (limited use, must be 1:1 JPY) Japan’s regulation sets: can only peg to JPY can only be for domestic use for small payments cross-border and DeFi are not encouraged issuer eligibility is extremely restrictive This means: ✔ suitable for domestic banks ✘ not suitable for global corporations 2. USD stablecoins have stronger global scalability U.S. regulation may be strict, but the ecosystem is open: can be used for cross-border payments can be used for game assets can integrate deeply with the crypto ecosystem can be used within compliant trust structures can be pegged 1:1 to USD can be used for new business model design This is the core reason Sony chooses USD rather than JPY: it’s not that Sony abandoned the yen, but that a yen stablecoin cannot support its global strategy. 3. Stablecoins are not retail currency — they are an operating method for corporate assets Sony is not doing stablecoins to challenge national currency. Instead, it is: lowering payment costs building its own payment system building a user points system forming an ecosystem closed loop of games + film/TV + NFTs, moving away from the VISA fee system. This will become a trend for multinational corporations: any company with global users may issue its own stablecoin — and the impact on monetary sovereignty is deeper than crypto trading itself. You Must Classify the Sovereignty Debate: Impacts Differ Completely by Country Layer 1: High-inflation countries → sovereignty weakens quickly (highest risk) There are many such countries, mostly emerging economies, such as Argentina, Turkey, Venezuela, Lebanon, Zimbabwe, etc. In these countries: local currency purchasing power falls rapidly, residents’ savings flee into foreign currency, and stablecoins become substitute savings assets. Under the dual pressure of central banks struggling to control interest rates and local currency usage declining year by year, these regions may indeed see sovereignty weakening. The most typical example is Zimbabwe, one of the most representative high-inflation countries globally. In 2009, 1 USD could be exchanged for 250 trillion Zimbabwe dollars — more exaggerated than many Memecoin numbers. Even today, 1 USD can still be exchanged for 322 Zimbabwe dollars. In such countries, USD and stablecoins are almost the real currency. Layer 2: Mid-sized economies → sovereignty faces structural interference (controllable but serious) For example: Indonesia the Philippines Thailand India Brazil These countries’ currency systems are still functional, but cross-border demand is huge. The convenience and low fees that stablecoins bring to cross-border payments and settlement is essentially a dimension reduction strike against fiat settlement. But stablecoins can cause: part of FX flows shift on-chain, further causing central bank statistics distortion and partial interference with monetary policy transmission. However, in these countries, sovereignty will not collapse immediately, but it may be eroded. Layer 3: Developed economies → sovereignty is basically safe (stablecoins become infrastructure instead) These are strong countries and economic blocs such as the United States (issuer country), the EU, Japan, South Korea, Singapore. In these countries: strong local currency + stable financial system + controllable inflation, so stablecoins are more used for innovation and fintech. They will not be replaced; instead they benefit from stablecoin ecosystem expansion. The only exception is Europe, because the euro lacks a product comparable to USD stablecoins, and may face further squeeze from U.S. fintech power in the future. After Multi-dimensional Analysis, We Can Reach a Structured Conclusion Conclusion 1: Stablecoins are a technological force, not an active attempt to erode sovereignty — but the outcome will affect sovereignty Their essence is not foreign currency, but a more efficient “internet monetary protocol.” Weakening sovereignty is not their intention, but a side effect of natural technological evolution. Conclusion 2: What truly gets weakened is the sovereignty of “weak-currency countries”; strong-currency countries face limited impact If a country has: high inflation + fragile financial system + low currency internationalization + insufficient financial digitalization = stablecoins will become “substitutes.” But if: strong local currency + advanced financial system = stablecoins will only become “infrastructure supplements.” Conclusion 3: Stablecoins entering corporate systems (like Sony) is the real sovereignty threat The significance of enterprises issuing stablecoins is greater than financial institutions: direct reach to users ecosystem-scale closed-loop payment scenarios ability to bypass banking systems In the future, large enterprises and platform companies may become “currency issuers” — this is the core of monetary sovereignty risk. Conclusion 4: Stablecoins are unstoppable; the only strategy is “countries must issue their own digital currency and stablecoin systems” No country can stop technological change. The only realistic choice is: ✔ build national-level stablecoins ✔ improve regulatory frameworks ✔ build digital payment infrastructure ✔ cooperate with enterprises to co-build ecosystems Otherwise, they will lose voice and influence in global competition.

#EducationalSeries #Stablecoin Stablecoins are nothing unfamiliar to anyone. You could even say they are the financial pillar that supports “faith” across the entire crypto market. Without stablecoins, people’s understanding of crypto would probably still be stuck at the level of altcoins, air coins, and violent pumps and dumps. So yes — stablecoins are infrastructure in the crypto world, and also the easiest thing to ignore. Before policy tailwinds pushed stablecoins into the spotlight this year, this sector was long overshadowed by altcoin wealth myths and the spotlight of new narratives. Because stablecoins look “too stable,” too everyday, too ordinary — like water, soaking into every single trade. But you would never ignore water sources in war. And that is exactly what stablecoins are in crypto: the “water source.” When an industry’s “water source” — liquidity, unit of account, risk buffer, trading medium — gets attacked, the entire market often collapses instantly. Therefore, a stablecoin is not a simple financial product. It is: the “USD substitute” of crypto finance the anchor of market confidence the core channel of risk transmission the stabilizer and amplifier of the crypto system And precisely because of this, stablecoins have become one of the core battlefields for hackers, short-selling institutions, cross-border arbitrage players, and speculative capital. Today, we will systematically break down stablecoin attack types, and use a deeper lens to understand why stablecoins don’t just “de-peg,” but can also become the “detonator” that triggers cascading industry-wide crises. Why Are Stablecoin Attacks So Destructive? — Because this is not a single-point failure, but a system-wide systemic risk. Why does attacking one stablecoin often cause the whole market to stampede immediately? Do you still remember the USDe de-peg on October 11? As the world’s third-largest stablecoin, USDe’s de-pegging caused a massive shock across the crypto market. That is the terrifying part of stablecoins: they are usually tied to countless secondary trading pairs. 1. Stablecoins Carry the “Settlement Layer” Function They are not an asset — they are the “trading engine.” Attacking a stablecoin = draining the “fuel tank” of the financial system. USDT, USDC, and DAI matter because: all trading pairs are priced in them all capital flows settle through them all risk assets measure value through them all long/short positions use them as margin all CeFi/DeFi lending treats them as base assets Once confidence in a stablecoin breaks, it is not “one asset getting damaged” — it is the market’s tradability collapsing instantly. 2. Stablecoin Attacks Get “High-Speed Amplification” On-Chain Traditional finance has regulators, circuit breakers, market makers, and central bank backstops. But when a crypto stablecoin breaks: on-chain liquidation bots trigger automatically lending protocols begin forced liquidations AMM pools slip with instant slippage bridges get drained rapidly via arbitrage spreads short sellers further suppress stability the market enters a large-scale “de-peg” stampede So stablecoin attacks are the most typical exponential on-chain financial attacks: fast, heavy, broadly transmitted — almost no financial system can withstand the chain reaction. 3. Stablecoins Have Extreme Information Asymmetry Attackers can exploit: opaque reserve assets delayed disclosures vague custody banking information regulatory gray zones audits that cannot keep up with asset changes risk-asset exposure that outsiders cannot assess in real time This makes stablecoins the easiest financial products to be hit by “information warfare + capital warfare” simultaneously. The Seven Major Types of Stablecoin Attacks: From Shorting and Bank Runs to On-Chain Manipulation — Full Exposure of Systemic Risk Stablecoin attack methods are far more diverse than most people imagine — and they are becoming more hidden and more financialized. Based on difficulty, cost, and damage potential, we divide them into seven categories: Type 1: Market Attack A combined “information war + financial war” using short selling and narrative pressure. This is the most common, lowest-cost, and highest-return approach. Typical tactics include: shorting assets related to stablecoin reserves (such as reserve BTC, bonds, etc.) with large capital coordinating media or institutions to publish “insufficient reserves, de-peg, bankruptcy risk” narratives creating panic on social platforms and guiding panic-driven redemptions artificially creating slippage in AMM pools to push de-pegging probability even higher closing shorts for profit as panic sentiment amplifies This is a financial attack — not a technical one, but psychological warfare + capital warfare. A typical example is USDT being repeatedly short-attacked by financial institutions during 2018–2022, and even the well-known hedge fund Citadel was reportedly involved in planning. Type 2: On-chain Bank Run Attack Using AMM pools and lending protocols to “rapidly drain liquidity.” This is extremely brutal because on-chain liquidity is naturally fragile. Main steps: attackers pre-position large funds dump massive amounts of stablecoins into pools cause price slippage trigger arbitrageurs, bots, and algorithms to automatically sell eventually hollow out AMM pools bridges get squeezed on-chain protocols enter systemic liquidation In fact, no stablecoin can escape AMM bank run attacks — including USDT, USDC, DAI, FRAX, GUSD, etc. This is pure “whale-level capital warfare.” Type 3: Bridge-Based Attack Attacking through bridges to cause instant price de-pegging. Cross-chain bridges are hacker heaven — we explained bridge attacks in the previous lesson, and hopefully that’s still fresh. Attack methods include: directly attacking bridge contracts forging cross-chain messages by exploiting weak light-client verification creating de-pegging through bridge liquidity pool pricing mechanisms attacking the bridge’s oracle and tampering with exchange prices Once a bridge breaks, the stablecoin on one chain can de-peg from mainnet prices. Inter-chain arbitrageurs will rapidly drain liquidity, triggering an even worse effect: “local de-peg → network-wide de-peg.” The bridge problem is not “a bug” — it is that bridges inherently carry “single-point-of-failure” properties. Type 4: Oracle Manipulation A familiar concept — we covered it earlier. Oracle manipulation means tampering with price sources so the stablecoin gets a false price. This works because many stablecoin collateral systems depend on oracle feeds, such as: DAI (MakerDAO), FRAX, USDD, LUSD, and various on-chain stable pools. Attack flow: manipulate AMM prices feed false data through the oracle lending protocols misread collateral value stablecoins are massively minted collateral is drained stablecoin loses its peg This is a classic combined “on-chain quant attack + oracle-layer weakness” operation. Type 5: Reserve Attack A real-world financial offensive targeting centralized stablecoins, and it has become more common in recent years — especially against centralized stablecoins like USDT, USDC, TUSD, etc. Attackers may: short their reserve assets (Treasuries, BTC, gold, etc.) question reserve transparency expose internal compliance risks use rating agencies and regulatory pressure to create tension induce redemption runs The frightening part is: this is not an on-chain battlefield — it is a real-world financial battlefield. Attackers exploit sentiment and compliance pressure, not code vulnerabilities. Type 6: Audit & Information War An attack style that weaponizes information asymmetry to destroy a stablecoin through public opinion. Attackers may: forge “leaked audit reports” spread “reserve violations” narratives cite ambiguous regulatory statements to intimidate holders fabricate “bank accounts frozen” rumors mass-produce FUD (fear, uncertainty, doubt) narratives In the social media era, stablecoin holders are extremely sensitive. The slightest rumor can trigger dumping, allowing attackers to launch “psychological warfare” at extremely low cost. Type 7: Regulatory-Induced Attack Regulators are not attackers, but regulation can produce “attack effects.” Everyone should remember this sentence. A simple example: when a regulator proposes: stablecoins must have banking licenses reserves must be 100% cash high-risk assets are prohibited audits must be public custody banks must be disclosed These policies may be designed to protect users, but they can also become the spark that triggers: panic → on-chain bank runs → stablecoins becoming direct targets. Especially when regulators speak, short-selling institutions often move in sync — turning regulation into an “attack amplifier.” Three Trends Are Turning Stablecoins Into “High-Frequency Attack Targets” Trend 1: Stablecoins Are Now Large Enough to Affect the Global USD System USDT + USDC market cap exceeds $200 billion, and on-chain stablecoins like DAI account for more than 70% of DeFi stablecoin usage. This is large enough to influence cross-border flows. The more important something is, the more it becomes a target. Trend 2: Stablecoins Are Becoming a “Global Liquidity Black Hole” Stablecoins have already become: major overseas buyers of U.S. Treasuries the settlement layer of crypto markets capital refuge tools USD substitutes in emerging markets Assets with this profile have extremely high “attack value.” Trend 3: Traditional Financial Institutions Are Starting to Participate in Short Attacks Macro capital has realized: “stablecoins are not only attackable — attacking them can be profitable.” This will drive more institutions into the “stablecoin sniper market.” SuperEx Commentary and Recommendations: The Future of Stablecoins Will Enter an Era of “Strong Regulation + Strong Transparency + Strong Competition” From an exchange perspective, we believe future competition among stablecoins will no longer be just market cap competition, but: who is more transparent who is more attack-resistant whose reserve structure is more stable whose compliance system is stronger who can withstand institutional shorting who can maintain the peg under black swan conditions In crypto, whoever can defend the USD peg can defend liquidity and confidence. The stablecoin war will ultimately decide: who will become the “central bank” of future global crypto finance. Conclusion: Stablecoin Attacks Are Not Exceptions — They Are the Future Normal Stablecoins are the real “systemic risk source” of the crypto market. Over the next three years, stablecoin attacks will only become more frequent, more hidden, and more financialized. You must accept one reality: stablecoins are not stable. They are assets under continuous attack. What truly determines the market’s fate is whether stablecoins can survive the next round of attacks. For traders: do not worship any stablecoin diversify holdings check cross-chain bridge risk understand reserve structures track oracle mechanisms monitor on-chain pool depth at all times avoid large redemptions during panic This is not pessimism. This is maturity.

#Stablecoin #Circle #Ripple If 2021–2023 was the era of expansion for stablecoins, then post-2025 marks the era of belonging — belonging to a regulatory framework, a trust structure, a jurisdictional system. This is precisely why every major stablecoin issuer is now competing for one credential: the U.S. National Trust Bank Charter. From Regulatory Gray Zones to Institutional Legitimacy Following two landmark policy signals from the OCC (Office of the Comptroller of the Currency) in March and August 2025, the regulatory landscape shifted dramatically: Federal banks and savings associations are now authorized to engage in crypto asset custody, limited stablecoin issuance, and independent node validation. Community banks are encouraged to collaborate with crypto firms to co-develop financial products. This was not a “loosening” of policy — it was an institutional invitation. The OCC effectively opened a legal gateway to crypto banking: if you operate within the rules, the U.S. can recognize you as a bank. Circle Leads the Charge: From USDC to the “National Digital Currency Bank” Among all players, Circle made the boldest and most symbolic move. On June 30, 2025, it formally filed with the OCC to create “First National Digital Currency Bank, N.A.” This would be a digital asset bank — not accepting cash deposits or offering loans, but authorized to custody crypto assets and manage USDC reserves on behalf of institutional clients. This move redefines what a stablecoin issuer is. Previously, issuers were merely technical intermediaries: issuing tokens, managing reserves, and relying on the traditional banking system. Now, Circle seeks to become the banking node itself. That means: USDC reserves will be custodied by Circle’s own trust structure, not by partner banks. Trust management shifts from outsourced confidence to internal sovereignty. It also lays the foundation for Circle’s future in stock and bond custody. As CEO Jeremy Allaire put it:“We’re not trying to become a bank — we’re trying to make it safe for institutions to use digital dollars under a regulated framework.” That statement hits the core of this transformation: for a decade, crypto firms tried to avoid regulation; post-2025, they are competing to embrace it. Ripple: Bringing Stablecoins Into the Fed’s Master Account Long known for regulatory friction, Ripple has always excelled at navigating legal gray zones. On July 3, CEO Brad Garlinghouse confirmed on X that Ripple is applying for a National Trust Bank Charter and pursuing Federal Reserve Master Account access. This is a far more profound move than it appears. If approved, Ripple would not only custody reserves for its stablecoin RLUSD, but also gain direct access to the Fed’s payment system. That would make RLUSD not just an on-chain dollar, but a “dollar shadow” within the federal clearing network. Garlinghouse called this “a new benchmark for stablecoin trust” — in other words, he aims to make stablecoins bank-grade financial products. Strategically, Ripple’s goal isn’t merely to issue RLUSD — it’s to rebuild the cross-border settlement layer, creating a “bank-grade SWIFT” powered by crypto. If Circle is building the payment layer of the digital dollar, Ripple aims to build the settlement layer. Paxos and Coinbase: Rebuilding the Trust Architecture Paxos’ story feels like a homecoming. It had already received conditional OCC approval in 2020 but lost it in 2023 due to procedural lapses. Now, it’s reapplying — clearly intent on re-entering the mainstream regulatory framework. For Paxos, trust trumps innovation. After its experience with Binance’s BUSD, it learned the cost of regulatory friction. A National Trust Charter would free it from New York State’s limited jurisdiction and allow nationwide clearing operations. Coinbase, on the other hand, approaches this as strategic positioning. Already holding a digital asset custody license, Coinbase’s trust bank application isn’t about becoming a traditional bank — it’s about streamlining institutional settlement. VP Greg Tusar said this will enable Coinbase to “innovate continuously within a clear regulatory perimeter.” In essence, Coinbase is evolving from a trading platform to a regulated financial services conglomerate, building the legal foundation for ETF custody, crypto settlement, and on-chain payments. The Payment Giants’ Stablecoin Ambitions When Stripe acquired Bridge in 2024, most saw it as a Web3 infrastructure play. But when Bridge filed for a National Trust Bank Charter, the real strategy emerged: Stripe doesn’t just want to embrace crypto — it wants to control it. Co-founder Zach Abrams stated:“We’re turning stablecoins into regulated core financial primitives.” That means Stripe is building a new payment infrastructure model: Businesses issue their own stablecoins via Bridge. Reserves and settlements are custodied within Bridge’s banking framework. Stablecoins are natively integrated into Stripe’s payment network. This model aligns closer to traditional finance than to Circle’s or Ripple’s approaches. Stripe isn’t just issuing tokens — it’s rebuilding the middle layer of the U.S. dollar payment stack. That’s why Phantom’s CASH, MetaMask’s mUSD, and Hyperliquid’s USDH all chose Bridge as an issuance partner. Why Everyone Wants the Same Charter Because this charter is the OCC’s highest-level crypto financial license — a national trust bank designation that carries:Broader legal authority than state-level trust licenses, Wider service scope and interstate recognition, Direct access to federal payment and settlement networks. Without it, even the largest stablecoin firms remain “shadow banks. With it, they become participants in the U.S. financial system — able to clear, custody, and collaborate institutionally. This isn’t just about compliance — it’s about hierarchy. In the coming decade, the leading stablecoin won’t be the one with the biggest market cap, but the one that’s chartered. Revisiting the GENIUS Act Since the enactment of the GENIUS Act, U.S. regulators have, for the first time, defined stablecoins systematically: Only three types of entities may legally issue them: Federally chartered banks, Nonbank trust institutions regulated by the OCC, State-licensed issuers with circulation below $10 billion. This creates a three-tier regulatory architecture: Top tier: Federal license (Circle, Ripple, Paxos are applying) Middle tier: State-level oversight (e.g., NYDFS) Bottom tier: Restricted issuers (small projects) Law firm Winston & Strawn summarized it best:“The Act incentivizes stablecoin issuers to climb upward, because state licenses alone can’t support nationwide operations.” In other words, the GENIUS Act is pushing crypto companies from ‘quasi-banks’ to true banks. Beyond Compliance: A Structural Convergence This wave of applications marks more than regulatory adaptation — it’s the crypto industry’s active integration into the U.S. financial system. For a decade, decentralization was about resisting financial centralization. Now, stablecoin giants are pursuing reciprocal centralization — entering the system to achieve legitimacy. It’s a decentralization correction movement. The boundaries between DeFi, CeFi, and TradFi are fading. Circle becomes a licensed digital currency bank; Ripple connects to the Fed’s payment rail; Stripe’s Bridge powers on-chain payments. The crypto world is no longer a parallel financial system — it’s embedding itself into the core of mainstream finance. Who’s Most Likely to Get Approved First?From a compliance standpoint: Circle: clear business focus and strong regulatory record — most likely to be approved first. Ripple: strong technology but ongoing legal baggage — uncertain. Paxos: regulatory reconciliation experience — likely next phase approval. Coinbase: steady institutional custody play — low-risk, gradual approval. Bridge (Stripe): positioned more as a payment integrator, not an issuer. As Galaxy Digital’s Alex Thorn observed:“In the future, stablecoin issuers will look more like banks — and banks will look more like stablecoin issuers.” Conclusion: Bankification Is Not the End — It’s the Beginning This “charter race” isn’t just about meeting regulatory requirements — it’s the pathway to a systemic trust upgrade: Future stablecoins won’t rely on banks — they will be banks. Future crypto payments won’t exist outside finance — they’ll be embedded within it. The future U.S. dollar won’t be paper — it’ll be a regulated, trusted, and settled on-chain symbol. As the financial core shifts from bank accounts to smart contracts, and regulators evolve from rejecting innovation to designing it, the bankification of stablecoins may, in fact, be the true beginning of the U.S. dollar’s digital era.

#Citi #Stablecoin #BankToken Over the past few years, stablecoins have played an almost “leading role” in crypto: whether matching orders on exchanges or powering collateralized lending in DeFi, stablecoins are the core infrastructure. Citi’s newly released report, “Stablecoins 2030,” stretches the outlook much further: by 2030, outstanding stablecoin supply could surpass $1.9 trillion in its base case — and, in an optimistic scenario, race toward $4 trillion. What does that mean in practice? Today’s stablecoin market is only about $150 billion. A seven-year, 20–30x expansion deserves a careful unpacking of the logic behind it. A Detailed Reading of Citi’s Latest Report: “Stablecoins 2030” 1. Market Size: From “Exchange Settlement Tool” to “Global Payment Layer” Citi offers two projections in the report: Base case: stablecoin supply reaches $1.9 trillion by 2030. Optimistic case: up to $4 trillion. If you then layer in velocity — how many times a single stablecoin unit can “turn over” in a year — Citi assumes future stablecoin velocity could reach 50x (close to traditional payment systems). Under that assumption: In the base case, stablecoins could support $100 trillion in annual transaction volume. In the optimistic case, $200 trillion per year. This is no longer about “stablecoins within a small circle,” but points directly to the global payment layer, cross-border settlement, and international trade. 2. Growth Drivers: Three Engines at Work Citi believes future stablecoin growth won’t be driven by a single force, but by three engines operating simultaneously, together forming a massive demand base. These three engines are the crypto-native ecosystem, e-commerce and digital-native enterprises, and offshore/international dollar demand. 1）Crypto-native ecosystem: stablecoins’ “home market” If you break down the history of stablecoins, they were almost tailor-made for crypto. Early on, Bitcoin’s price volatility was severe, and users lacked a tool “anchored to value” for pricing assets. Stablecoins emerged to become the trading counterparty, the hedging instrument, and the on-chain settlement currency. In today’s DeFi world, stablecoins are even more important: In lending markets, stablecoins are both collateral and borrowable assets. Users pledge ETH or BTC to borrow USDT/USDC for working capital. In derivatives, nearly all contract margins and settlements are stablecoin-denominated. In NFT and GameFi, stablecoins are not only the secondary-market settlement currency, but often the “exchange bridge” between in-game economies and the real world. In other words, even if stablecoins never entered traditional payments, the natural growth of the crypto-native ecosystem alone could expand them to the trillion-dollar scale. Citi’s report emphasizes that this demand is a “base layer” — solid and persistent. More critically, stablecoin usage exhibits a flywheel effect within crypto: The more people use stablecoins, the more DeFi protocols support them; The more protocols and use cases there are, the higher the demand and the faster the velocity. This positive feedback loop underpins stablecoins’ sustained growth over the next decade. 2) E-commerce and digital-native enterprises: the “expansion market” Citi sees the second driver coming from e-commerce, gaming, and social platforms. This is closer to everyday users and might even be the catalyst for true stablecoin breakout. Why? Because stablecoins are naturally suited for internet payments: Borderless: cross-border payments don’t need bank intermediaries — no 3–5 day settlement cycles. 24/7: they operate around the clock; weekends don’t pause transfers. Low cost: compared with expensive SWIFT cross-border remittances, stablecoin transfers are near zero cost. Imagine a cross-border e-commerce platform — say Shopee in Southeast Asia or Noon in the Middle East — embedding stablecoins into its payment stack. It could bypass complex FX controls and bank networks, directly realizing a “local currency ⇋ stablecoin ⇋ USD asset” loop. That’s a huge win for merchants and users alike. The same logic applies to gaming and social apps: Gaming economies need a “hard currency” that’s redeemable; stablecoins beat any virtual voucher on real-world value. Social apps can enable tipping and paid content via stablecoins, connecting directly with global users. More importantly, stablecoins could become a “platform settlement currency,” much like Alipay or PayPal. Once that kind of scaled application appears, stablecoins will leap from “a crypto-only currency” to a global internet payment tool. 3) Offshore/international dollar demand: the “hidden market” Finally — and this is something Citi particularly stresses — stablecoins are becoming the easiest way to access “digital dollars” globally. In many emerging markets, opening a USD account isn’t easy. Local banking is inefficient and FX controls are strict. For residents in such countries, holding USD and moving assets is often hard. Stablecoins provide a direct solution: Open a wallet address — no KYC required — and you can hold stablecoins. Stablecoins are transferable anytime and largely outside local capital controls. Liquidity is ample; conversion back to local currency is fast. This is especially crucial in high-inflation countries. In Argentina, Venezuela, Nigeria, and elsewhere, many people convert their salaries into stablecoins as soon as they’re paid, to avoid domestic currency depreciation. Here, stablecoins aren’t an investment — they are a lifeline for wealth preservation. This is what people call digital dollarization. As stablecoins spread globally, the trend may become more pronounced. It will not only meet individual needs but could also influence national FX structures. Taken together, these three forces form an inside-out expansion path: The crypto-native ecosystem is the core, the soil in which stablecoins first took root. E-commerce and digital enterprises are the expansion layer, bringing stablecoins into mainstream internet applications. Offshore dollar demand is the hidden market, giving stablecoins “must-have users” in emerging nations. Stack these three and you get Citi’s 2030 vision of $1.9–4 trillion in stablecoins. 3. A Powerful Rival: The Rise of Bank Tokens Stablecoins won’t be alone. A key point in Citi’s report is that bank tokens (tokenized deposits) may overtake stablecoins in transaction volume by 2030. Stablecoins’ edge: open, flexible, ideal for individuals and SMEs — anyone can use them. Bank tokens’ edge: backed by bank credit and easier to embed in enterprise finance and at-scale supply-chain payments. Citi projects that bank tokens’ annual transaction volume could reach $100–140 trillion by 2030 — higher than stablecoins. In other words, stablecoins will likely power the “internet-native, decentralized” economy, while bank tokens will handle “institutional, large-ticket” flows. The future may look like this: Stablecoins = digital cash, better for individuals and decentralized ecosystems. Bank tokens = digital deposits, better for enterprises and institutions. The two are not “zero-sum,” but “parallel prosperity.” 4. Regulation and Institutions: Catalysts for Mainstreaming Whether stablecoins can reach $4 trillion hinges on regulation and openness of payment networks. United States: moving forward with the GENIUS Act, and the SEC has launched the “Project Crypto” regulatory initiative. Europe: MiCAR (Markets in Crypto-Assets Regulation) has gone live. Asia/Middle East: Hong Kong and the UAE are issuing stablecoin licenses to encourage compliant development. Perhaps most importantly, Visa and Mastercard have begun piloting stablecoin settlement on their networks. Once the payment giants truly open the pipes, stablecoin use cases could expand by orders of magnitude overnight. The Report’s Core Logic: Stablecoins Are About Fusion, Not Disruption Citi’s conclusion is clear: stablecoins won’t replace the dollar or disintermediate banks. Instead, together with bank tokens and CBDCs (central bank digital currencies) they will co-build a new digital-currency stack. For everyday users, stablecoins are “digital dollars you can use anytime. For enterprises, bank tokens may be more attractive, as they plug naturally into compliance, privacy, and existing finance systems. For regulators, a clear framework can move stablecoins from a “gray zone” to a compliant asset. In the end, the financial world of 2030 will likely be a three-pillar landscape: stablecoins + bank tokens + CBDC. Citi’s Outlook Is “Cautiously Optimistic” It recognizes that stablecoins will expand, while also underscoring the competitiveness of bank tokens. The trend suggests that the value of stablecoins is not to “replace the dollar,” but to supplement the dollar system. Put another way, the greatest significance of stablecoins isn’t to become a new currency, but to become the “lubricant” of global finance — appearing in cross-border payments, crypto finance, and e-commerce transactions. By 2030, whether you consider yourself a crypto user or not, you may well have used a stablecoin without realizing it. Conclusion Citi’s report effectively legitimizes stablecoins in the eyes of TradFi: they aren’t a fleeting speculative fad, but a class of infrastructure with a real shot at reaching the trillion-dollar level. The future of stablecoins is fusion, not replacement — not “disrupting the dollar,” but making the dollar more digital and more global.

#WebX2025 #Japan #Crypto At the end of summer in Tokyo, the WebX 2025 conference arrived as scheduled. Known as “Asia’s most important crypto summit,” the stage once again gathered global regulators, industry leaders, and policymakers. And the highlight this year was undoubtedly a roundtable on “Stablecoin Regulation and Applications in the U.S. and Japan.” On one side sat Heath Tarbert, former chairman of the U.S. CFTC and now Chief Legal Officer of Circle. On the other, Satsuki Katayama, Japanese Senator and Chair of the Budget Committee. Representing the world’s two most important economies, they engaged in a fiery dialogue on crypto regulation and stablecoin development. Some said this dialogue was like a “debate on the future of finance.” Others saw it as a microcosm of the battle between stablecoins and CBDCs. Either way, the signals revealed from this roundtable were enough to make the entire industry hold its breath. The U.S. Perspective: From “War” to “Embrace” If you remember the U.S. crypto environment just a year or two ago, the word was “winter.” Regulators and the industry were locked in confrontation, lawsuits were everywhere, and nearly every emerging project felt the heavy weight of uncertainty. Now, Heath Tarbert delivered a striking line on stage: “For the first time in history, the United States is truly embracing crypto assets.” 1. The Genius Act: Stablecoins Finally Gain Recognition At the core of this “embrace” is the passage of the Genius Act. The significance of this law lies in the fact that, for the first time, stablecoins were legally recognized as equivalent to cash. This means future U.S. dollar stablecoins must meet three requirements: 1:1 High-Quality Reserves: Each stablecoin must be backed by equivalent cash or Treasuries. Transparency and Auditing: Issuers must regularly disclose reserves and undergo third-party audits. Compliance-Only Issuance: Algorithmic stablecoins or those backed by risky collateral are strictly excluded. In short, the U.S. has finally given the industry a clear “moat”: compliance, transparency, and credibility. 2. America’s Dilemma: The Road Is Open, But Details Lag Behind However, Heath also admitted this is just the beginning. The U.S. still faces unresolved issues: Digital asset classification: Which are securities, which are commodities? Custody and exchange rules: Who takes responsibility, and how to protect users? Market structure legislation: How will digital assets be fully integrated into the mainstream financial system? More subtly, although the Genius Act has passed, its implementation rules are not yet in place. It’s like a building framework has been erected, but the wiring and plumbing are not finished. 3. Attitude Toward CBDCs: Cautious, Even Resistant On CBDCs, Heath was blunt: the U.S. is not in a rush. The main reason — privacy and surveillance concerns. In fact, the Genius Act explicitly prohibits the Fed from launching a CBDC in the near term, almost like “sealing off the exit in advance.” In Heath’s view, the future of the U.S. dollar is far more likely to exist in stablecoin form rather than as a CBDC. The Japanese Perspective: Stablecoins First, CBDCs Slowed Unlike the U.S.’s “legislative breakthrough,” Japan’s focus is more on practical applications. 1. Stablecoins vs. CBDCs: Japan Chooses the Former Satsuki Katayama stated firmly: “Japanese society harbors deep skepticism toward CBDCs, with privacy and decentralization being the main concerns.” She admitted that while the Bank of Japan is collaborating with the ECB and others on CBDC research, progress has been slow. Instead, Japan prefers to prioritize stablecoin development. 2. Tax Reform: Bringing Crypto Back to “Reasonable Rates” Another critical issue in Japan is taxation. Currently, crypto income is categorized as “miscellaneous income” with tax rates as high as 55%. This has driven away many young investors. Katayama revealed that Japan plans to reclassify crypto under the Financial Instruments and Exchange Act, reducing the tax rate to 20% — aligning it with stock trading and U.S. standards. The logic is simple: lower barriers → more youth participation → wider stablecoin adoption in daily payments. 3. Youth as the Driving Force In Japan, the crypto user profile is clear: young people. Katayama even pointed out that much of their information comes from “food and fashion idols.” It sounds lighthearted, but it reflects a fact: young people are embracing crypto in their own way. The Global Future of Stablecoin Applications During the roundtable, both U.S. and Japanese representatives emphasized the same point: Stablecoins are not just a crypto trading tool, but the new cornerstone of global finance. 1. Cross-Border Payments: As Simple as Email Currently, cross-border remittance fees average 6–7%, with settlement times of several days. Stablecoins flip this on its head: instant settlement, low cost, no forex fees. Heath even drew a vivid comparison: “Sending stablecoins across borders is like sending an email.” 2. Enterprise Adoption: A Potential B2B Revolution Imagine a Japanese automaker settling parts procurement with stablecoins. No bank settlement delays, no forex losses. The only obstacle is Japan’s current transaction size limits, restricting large-scale B2B adoption. But as Katayama noted, these rules are already under review. 3. Financial Inclusion: A “Dollar Alternative” for Non-G20 Nations In countries suffering severe currency depreciation, stablecoins could become the preferred savings tool. For citizens there, stablecoins = a portable U.S. dollar bank account. Hot Take: Stablecoins vs. CBDCs — The Strategic Divergence The biggest highlight of the roundtable was the strategic divergence between stablecoins and CBDCs. Japan: Skeptical of CBDCs, pragmatic in promoting stablecoin use. U.S.: Legally cementing stablecoins, even blocking short-term CBDC paths. In other words, both economic giants are tilting toward stablecoins — just with different approaches. For the industry, this implies: Clearer regulatory trends: Stablecoin compliance is inevitable. Improving tax environments: Especially in Japan, which may spark new adoption. Faster enterprise adoption: B2B payments and cross-border trade could lead the way. CBDCs left uncertain: Likely to remain “lab projects” rather than mainstream payment tools. Conclusion The WebX 2025 roundtable was not just a “U.S.–Japan dialogue,” but a global crypto regulatory weathervane. Japan showcased its pragmatism and caution: promoting adoption through tax reform and stablecoin use in daily life. The U.S. took a crucial legal step: granting stablecoins unprecedented recognition. Stablecoins and CBDCs may not be absolute opposites, but at least for the next five years, stablecoins will undoubtedly become the most practical and valuable cornerstone of blockchain finance. For investors, what does this mean? Spot the trend: Stablecoin compliance and applications will only grow. Watch the policies: Tax and trading rules directly shape market vitality. Position for the future: Whoever captures stablecoin applications will own the next gateway of financial internet. Tokyo’s discussion has already given us the answer. The rest is up to the market’s performance.

#FOMC #Stablecoin #Crypto At the beginning of August, the Federal Reserve (Fed) released the minutes of its July FOMC meeting. This set of minutes was somewhat unusual: if in past years the content was mostly the old themes of inflation, employment, and interest rate balance, then this time, a brand-new “protagonist” kept showing up again and again — stablecoins. According to the full text of the minutes, the term “stablecoin” appeared eight times, its level of attention even exceeding that of some traditional topics. For the Fed, this was not a casual mention, but rather a deliberately bolded signal. One must know, in the traditional central bank lexicon, any word that gets repeatedly mentioned is basically a variable that could potentially shake the financial system. This is not a coincidence. With the passing of the GENIUS Act, stablecoins have already leapt from being a marginal “crypto niche tool” to becoming a variable that could affect monetary policy, the banking system, and even U.S. fiscal policy. This means the Fed is no longer only watching inflation and the yield curve, but has begun turning its gaze toward that crypto field they once glossed over. In other words, stablecoins have now officially entered the Fed’s strategic horizon. So, what exactly did the Fed say? And what does this mean for banks, the crypto market, and ordinary investors? Let’s break it down step by step. Key Highlights of the Minutes: Three Core Themes This meeting’s minutes mainly revolved around three blocks: 1. Macroeconomy and Interest Rates Most members believe that inflation risks still outweigh employment risks. The interest rate level may be approaching neutral, but it is still not safe enough to relax. The effects of tariffs may show up with a lag, and companies could pass the costs onto consumers. In other words, the Fed still worries that “inflation might reignite.” 2. Asset Valuation and Market Bubbles The minutes mentioned “concerns about elevated asset valuations.” This line is quite telling. It reads like a reminder to the markets: don’t just stare at rate-cut expectations, the frenzied rise in asset prices is also entering the Fed’s “watch list.” 3. The Sudden Rise of Stablecoins A considerable portion of the minutes discussed payment stablecoins. Committee members believe stablecoins could improve payment efficiency and increase demand for U.S. Treasuries, but at the same time might also impact the banking system and monetary policy. More critically, they clearly pointed out that the passing of the GENIUS Act means the legitimate scope of stablecoin use is expanding. To sum it up in one sentence: the rate path remains cautious → concerns about asset bubbles are rising → stablecoins became the biggest “keyword” in crypto. If we carefully examine the language of the minutes, we can see the Fed’s attitude toward stablecoins shifting from “peripheral observation” to “core agenda.” Scenarios mentioned: payment systems, demand for supporting assets (U.S. Treasuries), financial stability, monetary policy implementation. Tone shift: no longer just “risk reminders,” but now beginning to analyze their systemic impact on the macro and financial system. This means stablecoins are no longer just a “toy of the crypto circle,” but have entered the central bank’s strategic vision. Fed Governor Waller, in his speech, even directly pointed out: AI + stablecoins = the future of payment innovation. He even used the phrase “technology-driven revolution.” In other words, in official language, stablecoins have upgraded from “potential threat” to “potential opportunity.” The “Subtext” of the Minutes: Who Wins, Who Loses? We can treat the Fed’s minutes like an “official dress rehearsal script.” What’s written isn’t just what the central bank plans to do, but also who might benefit and who might get hurt. 1. U.S. Treasuries: The Winners The minutes explicitly stated that with the possible increase in payment stablecoin usage, this will “boost demand for U.S. Treasuries and other safe assets.” Why is this key? Because stablecoins must have a “backing,” and that backing needs to be both safe and liquid. For global investors, assets that meet both conditions are few and far between, and U.S. Treasuries are almost the “only standard answer.” This means the expansion of stablecoins will naturally drive demand for Treasuries. The subtext of the minutes is: “Treasury Department, you don’t need to worry too much about debt issuance being absorbed, because stablecoins will become new buyers.” Against the backdrop of persistent fiscal deficits and huge debt levels, this is a signal not to be ignored. Stablecoins act like an “automatic augmenter,” quietly propping up U.S. debt. From the crypto perspective, this means stablecoins are no longer just “settlement tools in the crypto circle,” but are now deeply binding with the U.S. Treasury market. In other words, behind one USDC lies not just one dollar, but also one dollar plus the credit of the U.S. Treasury. 2. Banks: The Anxious Ones The minutes noted that stablecoins could impact banks and the broader financial system. On the surface this sounds bland, but it actually reveals the anxiety within the banking system. The traditional banking profit model relies on two core elements: Deposit sources: people’s money in banks enables lending and investing. Payment channels: banks act as the infrastructure for domestic and cross-border payments, earning fees and spreads. But once stablecoins gain traction, what happens? Consumers and businesses might no longer need bank transfers, instead settling directly with stablecoins. Deposits could partly migrate into the stablecoin ecosystem. A simple example: if a company’s supply chain partners all accept USDC settlements, then it doesn’t need to keep all its funds in bank accounts, and would instead choose to hold stablecoins. Over time, banks’ deposit pools get “hollowed out,” and payment revenues get “diverted.” This explains why the minutes, though not bluntly critical, contained a hidden concern: stablecoins might cut into banks’ bread and butter. So we see an interesting contrast: The U.S. Treasury market is “smiling” because of stablecoins; The banking system is “anxious” because of stablecoins; The Fed itself is the “conflicted one.” 3. The Fed: The Conflicted Arbiter Another concern embedded in the minutes is that stablecoins could have broader effects on monetary policy implementation. Why? Because the Fed’s main tool for adjusting the economy is interest rate policy, which transmits to markets through the banking system. If more and more funds bypass banks and flow directly into the stablecoin system, the Fed’s tools become blunter. Imagine this: the Fed raises rates, intending for higher bank loan rates to reduce corporate and consumer borrowing, cooling down the economy. But if companies’ funds are mostly circulating in the stablecoin system, the sensitivity to bank loans decreases, and the efficiency of rate policy transmission is reduced. That’s the Fed’s dilemma: stablecoins can improve payment efficiency and bring financial innovation, but at the same time might weaken monetary policy effectiveness, making “hikes” and “cuts” less effective. The emphasis in the minutes on “monitoring the assets backing stablecoins” is essentially the Fed leaving itself a back door. The meaning is: I don’t oppose you playing, but I must watch you closely to ensure the whole system remains within my control. Stablecoins = A Double-Edged Sword To summarize in one sentence: stablecoins are like a double-edged sword. On one side, they cut open payment efficiency, bringing new financial imagination. On the other, they cut into the nerves of banks and monetary policy, causing discomfort to vested interests. For the crypto market, this double-edged sword effect means stablecoins won’t be allowed to “grow wild and free,” but will instead “grow with shackles.” From an investment perspective, this isn’t a bad thing. Because as long as the Fed is willing to pull stablecoins into formal discussions, it means they can’t be easily “killed off.” The only question is, in what form will they continue to exist: As Wall Street and the Treasury’s “new tool”? Or as a “decentralized force” preserving the crypto spirit? The answer may slowly emerge over the coming years. Opportunities and Risks for the Crypto Market For the crypto market, the biggest significance of these minutes is that stablecoins have officially been included in the Fed’s core discussion circle. This brings several implications: 1. Legitimacy Enhancement, Wider Applications The passing of the GENIUS Act legitimizes stablecoins. In the future, compliant stablecoins may quickly penetrate U.S. payments and settlement. This is a major boon for projects like USDC. 2. Revaluation of the Assets Behind Stablecoins If stablecoin reserves increasingly allocate to U.S. Treasuries, it means the crypto world and traditional finance will bind more tightly. In a sense, stablecoins could become the “hidden bid” for Treasuries. 3. DeFi and Traditional Finance Interfaces The “monitoring” mentioned in the minutes is not only regulatory pressure, but also potential interface opportunities. If compliant stablecoins become mainstream, DeFi’s legitimacy will also be lifted, since the underlying assets it relies on are more transparent and safer. 4. Risk: Squeezed Space for Decentralized Stablecoins Compared with centralized projects like USDC and USDT, decentralized stablecoins (such as DAI, FRAX) face bigger policy risks. Because clearly, the Fed prefers stablecoins it can control. Conclusion On the surface, the minutes were about discussions of rates and inflation, but the real “Easter egg” this time was undoubtedly stablecoins. Imagine: ten years ago, how could Fed minutes ever mention Bitcoin? Twenty years ago, who could have thought “virtual currencies” would become a central bank research topic? Yet today, stablecoins are already written into FOMC’s official documents. This feels like a “historic freeze-frame”: the crypto world is no longer just a marginal player, but is gradually becoming part of the global financial system. So if you are a participant in the crypto market, whether in Bitcoin, Ethereum, or DeFi protocols, remember this set of minutes. Because it is not an isolated document, but the prelude to the trajectory of the crypto market over the next several years.