Author: Master from Down Under
Original Title: On the Eve of a Major Stablecoin Revolution — Circle's Crazy Surge and Potential Opportunities
If recently there's anything that could spark discussion among global financial practitioners, whether in web2 or web3, it would be Circle, which has been skyrocketing after its US stock listing. Besides Web3 players generally being pessimistic and even shorting without getting on board, Web2 players are bullish and FOMO-buying. This terrifying explosive power has already made many traditional financial giants restless, forcing them to directly face the potentially revolutionary impact of stablecoins globally. This makes me feel like I'm sitting on the wheels of history rolling forward again, with a bit of a "great era" feeling.
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First, let's look at the scenario @CryptoHayes wrote in his article 'Libra: Zuck Me Gently': "I recently discussed stablecoins with a board member of a large bank, and they said 'we're doomed'. They believe stablecoins are unstoppable, using Nigeria as proof. I previously didn't know the extent of USDT's penetration in the country, but they told me that one-third of Nigeria's GDP is transacted in USDT, even though the central bank seriously tried to ban cryptocurrencies."
Based on my travel experiences and understanding in multiple countries with poor monetary sovereignty, Nigeria likely represents a typical case. Wherever there's high inflation and exchange rate volatility, stablecoins, blockchain wallets, and U cards will be the first to make an impact, and administrative measures cannot prevent this.
Compared to previous underground black markets, stablecoins and blockchain characteristics dramatically increase regulatory difficulty. Stablecoins will become a "financial Starlink system" — funds can be settled freely without the domestic central bank. This is no longer just a financial reform, but a tug-of-war between national sovereignty and open markets.
Many small countries' "coinage rights" will be further stripped away. I feel that one of the most exciting dreams during the DeFi Summer — global financial flattening — is gradually becoming reality. Imagine a scenario: Users from Nigeria, Namibia, Philippines, even India and China, after converting their local currencies to stablecoins and storing them in wallets, simultaneously choose a DeFi protocol (like USDe) to enjoy not just non-depreciation, but annual yields close to 10%.
What a feeling? A unified financial world! For asset managers, stablecoin developers, RWA builders, wallet creators — what a massive new user base! It's like how we could only make local calls because long-distance was too expensive, and international calls were unimaginable. Then the internet arrived, suddenly enabling global communication, even video calls almost for free, flattening communication, drastically reducing global communication costs, turning the earth into an accessible global village.
This is a major transformation, a financial revolution that might change the behavioral patterns of a large global population, and we are on the eve of this revolution.
Even greater changes will come from traditionally monetarily stable countries, including the US itself and even China. After the stablecoin bill passes and USD stablecoins become legal, mainstream finance will massively enter. Banks and payment giants (Visa, PayPal) will directly issue stablecoins (like PYUSD, USDC bank version), while current early players like Circle, Paxos, Fidelity, and BlackRock will accelerate on-chain USD business expansion.
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I have no doubt we'll see stablecoin total market value potentially rapidly break through from the current ~$160 billion to $500 billion, becoming the main on-chain USD highway. Stablecoin-based payment settlement/AI/gaming/DePIN ecosystems will quickly become compliant. With policy shifts, media exposure, stablecoin issuers' market subsidies, and even presidential marketing, the number of stablecoin holders will first make a significant breakthrough in developed countries, especially the US. The proportion of people owning crypto digital wallets will extremely increase, which is the breeding ground for future Web3 explosion. USDC/USDT becoming compliant and entering more countries' financial apps will bring hundreds of millions of new users.
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Defi OGs all know that DeFi is like a financial game/stacking game, which can create many variations based on US Treasury underlying yields to improve stablecoin returns. Besides the current leader AAVE, others like Ethena, Pendle, and even Frax have opportunities to benefit. But I'm more looking forward to stimulating the market with more DeFi innovations, including fixed-income business projects that were tried in the last summer. New projects mean many opportunities, such as early participation in short airdrops/earning tokens by providing funds/becoming contributors/secondary holding, etc.
3、RWA Track
The fusion of yield-bearing stablecoins (with interest) and RWA (real-world assets) protocols will become a major trend, with on-chain bonds and asset pools directly supporting stablecoins. Now even @coinbase is trying to directly support stock tokenization, RWA is truly emerging. RWA series tokens - old and new - will have more opportunities compared to other traditional crypto tracks. Currently, I'm most focused on $ONDO$Plume, and I have good feelings about some new ones, which I'll update later.
Final Summary:
Stablecoin compliance is a major event of reconciliation/integration between cryptocurrency and the real world, potentially affecting hundreds of millions of ordinary people. Within this, there are also enormous opportunities, with $CRCL's surge beyond crypto expectations being just one sign. We may have been in the small web3 world for too long, unable to place ourselves in a larger pool or stage to assess outsiders' expectations of financial innovation (including myself, who previously saw at most 100). But let's seize more opportunities together; the new world has just begun.
