Compilation: chiancatcher
Circle (CRCL) had a strong first day of listing, with multiple circuit breakers triggered, and the stock price once soared to $103, becoming the first stablecoin issuer to successfully knock on Wall Street's door. This not only marks Circle's capital leap but also means that stablecoins are accelerating their entry into the mainstream financial system.
Meanwhile, the global regulatory landscape is rapidly evolving: Hong Kong has officially launched a stablecoin licensing system, the U.S. Genius Bill is accelerating, and the regulatory landscape is becoming clearer. On-chain data shows that stablecoin transaction volume has surpassed Visa and Mastercard, and the power structure in the payment field is quietly changing.
In this Space "Circle IPO - Global Crypto New Landscape Changes", we invited six guests: Kiwi, Research Head of OKX Ventures, Bruce, Investment Head of Summer Ventures, Kevin, Chinese Language Head of Frax Finance, Vava, Market Head of Infini, Claudio, Founder of KODO, and Levis, CMO of APACX, to engage in an in-depth dialogue around Circle's business model, stablecoin regulatory game, and the competitive logic of USDC and USDT, to see the real opportunities and challenges.
Full version can be listened to and replayed at: https://x.com/i/spaces/1RDGlzWoveqxL
[The rest of the translation follows the same professional and accurate approach, maintaining the specific terms as instructed.]Bruce:The implementation of the Genius Act marks a new stage of stablecoin regulation, with core requirements mandating that large issuers must be licensed and maintain 100% USD/US Treasury reserves, which will enhance industry transparency and prevent risks similar to the Silicon Valley Bank incident. Compliant Circle will significantly benefit, with traditional financial institutions more likely to choose compliant stablecoins like USDC, expanding their institutional user base.
The act poses challenges for non-US projects like USDT, whose lack of transparent reserves and registration qualifications may face securities classification risks, affecting their US market operations. The innovative models of decentralized stablecoins may also be hindered. Under increasingly strict global regulation, compliant entities will gain development dividends, but this may suppress innovation and increase market concentration.
Vava:The core purpose of the US Genius Act in regulating stablecoins is to maintain the dollar's dominant position and curb the influence of "on-chain Federal Reserves" like USDT. The act forces non-US stablecoins to either become compliant or exit the market, giving policy dividends to US-supported compliant projects like USDC.
As practitioners, we find that stablecoin implementation still relies on traditional banking settlement systems, revealing the contradiction between regulation and innovation: providing compliance pathways for innovations like RWA while potentially limiting native chain innovations. This dual effect will continue to impact the mainstreaming process of stablecoins.
Claudio:The Genius Act's core is to strengthen stablecoins' payment function positioning, led by the US Comptroller of the Currency, integrating them into existing banking regulatory frameworks. Long-term compliant Circle becomes the biggest beneficiary, matching its years of investment.
The act produces differentiated impacts on stablecoins: payment-type stablecoins like USDC gain institutional dividends, while algorithmic financial stablecoins like USDE face compliance barriers. USDT is at a strategic turning point where comprehensive compliance will consolidate mainstream market presence but potentially sacrifice gray-area businesses. Its adjustment strategy will be an important case for observing regulatory effectiveness. This differentiation reflects market natural selection, not regulatory defects.
KiWi:The Genius Act clears obstacles for compliant projects like USDC through full reserve and foreign investment restriction clauses, while creating conditions for financial giants like BlackRock to enter.
This regulatory clarification will trigger a chain reaction of "rule establishment - resource aggregation - competition escalation", meaning that while Circle enjoys short-term policy dividends, it will face strong challenges from traditional financial giants in the medium to long term. The current market landscape still has huge variables, and the ultimate winner remains uncertain.
[The rest of the translation follows the same professional and accurate approach, maintaining the specific terminology and context.]Changes in US regulatory policies bring new opportunities. Although the Genius bill vetoed the provisions for tech companies to issue stablecoins, if US tech giants (such as PayPal) choose to establish a compliant system in Hong Kong, similar to Tesla's factory setup in China, this could create new competitive variables for the Eastern market. Such fundamental transformation, rather than incremental improvement, could truly challenge the dominance of USD stablecoins.
4: What is the actual implementation of stablecoins in on-chain payment scenarios? Can applications like PayFi break through existing limitations? What are the key driving forces for the next breakthrough?
Kevin:Stablecoin payment development has entered a critical period. Although on-chain transaction volume has exceeded the total of Visa and Mastercard, daily consumer scenario applications remain limited. Applications like PayFi show enormous potential, but achieving large-scale implementation requires building a complete commercial ecosystem.
Taking FlexNet as an example, by connecting issuers, payment channels, and commercial scenarios, embedding stablecoins in actual transactions, and utilizing US Treasury yields to appreciate idle funds, forming a unique advantage of "payment+yield". In the future, with more licensed institutions joining and scenario expansion, cross-border e-commerce and cross-border remittances may be the first to break through. The true breakthrough lies in finding a killer application that simultaneously satisfies merchant efficiency and user returns.
Levis:PayFi shows differentiated development globally, especially in regions with weak financial infrastructure. In Venezuela, for example, local users have started using stablecoins to pay for digital service subscriptions, reflecting how 1.4 billion unbanked people are establishing alternative financial channels through stablecoins. The current PayFi ecosystem presents diverse development, including cross-border acquiring and on-chain forex innovations. Notably, in regions with severe inflation, the combination of "stablecoin payment + RWA yield" (7-10% annual) demonstrates a unique advantage.
As global debt increases (growing by 12 trillion dollars in the past 5 years), bringing currency devaluation pressure, this development model based on actual needs is more sustainable than regulatory promotion and is likely to become a key turning point for stablecoin payment popularization.
Claudio:Stablecoin payments show unique advantages in cross-border payments and financially underdeveloped regions. On one hand, they are breaking through the efficiency bottlenecks of traditional cross-border payment systems like Swift; on the other hand, in countries with severe inflation like Venezuela, they have become an important channel for residents to acquire US dollar assets.
However, in markets with mature payment systems (like Alipay in China), stablecoins struggle to replace existing local payment methods. Therefore, enterprise cross-border payments and specific regional personal remittances become the most promising breakthrough points. The entry of large tech enterprises might be key to driving popularization, as they both possess ready-made user scenarios and can enhance stablecoin credibility through corporate credit. This "application scenario+credit endorsement" model is more market-breaking than pure technological innovation.
5: Under the trend of stablecoin financial infrastructure, what kind of competitive and cooperative relationship will traditional banks and compliant stablecoin issuers (like Circle) present? Is it possible to give birth to a new form of "digital bank"?
Claudio:Stablecoins are upgrading to financial infrastructure, reshaping the relationship between banks and issuers. Circle's cross-chain clearing and merchant service modules challenge bank intermediary business, achieving "disintermediation". Their relationship might go through three stages: short-term cooperation (banks accessing USDC liquidity pools), mid-term competition (banks building their own stablecoins), and ultimately mergers (banks acquiring stablecoin technology). This will give birth to a "hybrid bank" that combines DeFi efficiency with traditional compliance, reshaping banking services through algorithmic management and smart contracts.
Industry mergers confirm this trend: Visa's investment in BBNK, Stripe's acquisition of Bridge, and other cases show two-way integration of traditional finance and Web3 payments. Circle Payment Network targets Swift's pain points, achieving global fund movement through on-chain settlement. Compared to multi-country fund pool models like Airwallex, USDC on-chain transfer + fiat cash-out avoids fund fragmentation while maintaining compliance, possessing a structural substitution advantage.
Bruce:Compliant stablecoin issuers like Circle are giving rise to a new digital bank model, focusing on payment clearing infrastructure rather than traditional lending and deposit business. Development shows three major characteristics: complementary cooperation with traditional banks, facing competition from large institutions building their own systems, and potential disruption by decentralized projects.
This will reshape the industry landscape, forming a three-layer competitive architecture of "traditional banks - compliant stablecoins - decentralized protocols", with all parties engaging in competition across regulatory, technological, and user dimensions, driving the digital transformation of financial infrastructure.
