Search the Community

#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.