Author: Wenser, Odaily
Editor: Hao Fangzhou
As BTC price approaches a new high of $112,000, the U.S. stablecoin regulatory bill "Genius Act" is also ready to go, and the crypto industry is further deeply coupled with the global economic system. People now realize that the payment system is the crown of the crypto industry, and BTC is the pearl on that crown. This is also one of the reasons why PayFi, U Card, and RWA have become the battlegrounds for exchanges and crypto projects to gather. In the future, independent payment solutions based on real-world subdivided industries may become possible.
Stablecoin Transformation: The Crypto Decade Originating from USDT (2014-2024)
In 2008, an article titled "Bitcoin: A Peer-to-Peer Electronic Cash System" appeared on the P2P Foundation website, authored by Satoshi Nakamoto, who was later revered as the godfather of the crypto industry. This was right after the 2008 subprime crisis caused by severe U.S. dollar inflation had come to an end, and the world economy was slowly rebuilding. Undoubtedly, the original intention of BTC was to solve the ills of centralized monetary supply systems and the lengthy, rigid, and inflexible global financial payment systems.
Unexpectedly to many crypto OGs, including Satoshi Nakamoto, it was not BTC, which held high the banner of decentralization, but various stablecoins strongly bound to the U.S. dollar and U.S. bonds that ultimately completed the "BTC peer-to-peer payment wish".
Tether's Rise: Surrounding the City from the Countryside, Capturing the Market with Use Cases
Looking at Tether's history, we can roughly classify its strategy as a "three-step approach":
(1) From Crypto Blood to Crypto Oil
In October 2014, Tether was founded, with its core product being a stablecoin USDT based on the Bitcoin Omni protocol;
In February 2015, USDT was listed on Bitfinex, the largest Bitcoin trading platform at the time. Tether CEO Paolo Ardoino is also Bitfinex's CTO, and the two companies have always been viewed as "brother companies" due to their highly overlapping team members;
In 2018, Tether issued USDT on Ethereum based on the ERC-20 standard, which was compatible with the original protocol and further enhanced its ease of use. From then on, Tether and USDT began to gradually penetrate the crypto ecosystem like crypto blood, riding the development of the Ethereum ecosystem.
In 2019, TRON and Tether successfully joined forces. Since then, TRON began to surge on the path of the stablecoin network's top ecology, becoming a heavyweight cooperative network that accounts for more than one-third of USDT's issuance. TRON founder Justin Sun also made TRON one of the crypto infrastructure through his early token distribution strategy.
It can be said that after the early redemption fee profit model was successfully verified, Tether had established its competitive barriers and business model through USDT, gradually becoming a trading equivalent like crude oil in the crypto ecosystem.
(2) From Crypto-Originated to Beyond Crypto
As 2020 arrived and DeFi Summer broke out, the market value of stablecoins soared. Naturally, Tether and USDT seized the first-mover advantage, and Tether's ambitions were no longer limited to the crypto world but gradually expanded to a larger range.
As we mentioned in our previous article "The 'First Stablecoin' USDT Reaches New Market Cap High, Unveiling Tether's Billion-Dollar Business Empire", USDT's use cases include crypto general equivalent, alternative currency in high-inflation regions, and primary payment tool for cross-border trade. Additionally, after obtaining massive profit returns, Tether further extended its reach into the entire world economic system through various investments, acquisitions, U.S. bond reserves, gold reserves, and BTC reserves, strengthening its connection with the world beyond crypto. This is also one of the important reasons why USDT is often accused of being a "money laundering accomplice". After all, money never sleeps, and neither does USDT.
(3) From Payment Means to Value Storage
In 2021, after reaching a settlement with the New York Attorney General's Office and paying a $41 million fine to the U.S. Commodity Futures Trading Commission, Tether cleared the biggest obstacle on its development path. Since then, USDT's value began to gradually upgrade from a payment means to a value storage. After experiencing previous de-pegging events and reserve asset FUD, USDT issued by Tether became one of the few hoarding objects in the high-risk, high-volatility crypto market - the other being BTC. Especially with its continuous U.S. bond purchases, market position tightly bound to the U.S. dollar 1:1, and brand recognition, it ultimately gained the crypto community's approval. The annual profit of tens of billions or even hundreds of billions of dollars further provided the confidence to claim the title of "dollar twin".
From a once wildly growing crypto project to today's stablecoin overlord, Tether and USDT staged a spectacular drama of "surrounding the city from the countryside and capturing the market through use cases".
USDC's Second Path: Centralized Development and Crypto IPO
Unlike USDT issued by Tether, Circle backed by Coinbase and its stablecoin USDC took a completely different path: everything built for compliance.
Apart from conventional U.S. bond reserves, Circle's profit model is undoubtedly more fragile, as partners like Coinbase and Binance can consume more than half of its profits. This is also one of the important reasons why it pushed for a crypto IPO during the Trump administration - only by seizing the existing compliance advantages and timely expanding its base from the crypto field to the traditional financial market can it gain stronger bargaining power and obtain stronger capital, resources, and policy support in subsequent market competition.
Besides the two market giants USDT and USDC, from early market players like TrueUSD (TUSD), Circle Coin (USDC), Gemini Dollar (GUSD), Paxos (PAX), to current market participants like DAI (MakerDAO), USDS (Sky), USDe (Ethena), PYUSD (PayPal), RLUSD (Ripple), USD1 (WLFI) and other stablecoin projects, the competition for this lucrative "cake" is undoubtedly becoming increasingly fierce. Who can truly stand undefeated or become the ultimate winner still remains to be tested by regulatory policies and time.
https://defillama.com/stablecoins
US "Genius Act" Sparks Stablecoin Regulatory Wave: Filling the Last Piece of Crypto Regulation
For all stablecoin projects, the recently Senate-approved stablecoin regulatory bill, the "Genius Act", is undoubtedly the Sword of Damocles hanging over their heads. After Bitcoin spot ETF and Ethereum spot ETF have become part of traditional institutional fund allocation, this bill will undoubtedly complete the last piece of crypto regulation under the Trump administration.
Specifically, in my personal view,the main purpose of the Genius Act is:
1. Ensure US dollar hegemony.As a loyal follower of "America First", the core purpose of Trump, his government members, and even Democratic members is still to ensure US political and economic hegemony, and the main medium to achieve this is the US dollar. Stablecoins pegged 1:1 to the US dollar are undoubtedly one of the best tools.
2. Ensure the stablecoin system operates within US jurisdiction.In the now-established crypto-friendly environment, the US is becoming a crypto hotspot again, which will help the US take the initiative in the stablecoin operating system and regulatory policy formulation. At that time, just like the previous trade regulations, the US will comprehensively suppress the global crypto economy and cross-border trade through the stablecoin system.
3. Ensure partial safety of the crypto financial system.This is also one of the important reasons why this "Genius Act" has received positive affirmation from many industry professionals and traditional financial industry representatives.Mandatory 1:1 full asset reserves with strict prohibition of misappropriation and re-pledging,high-frequency information disclosure with monthly reserve reports and external audit introduction,banking-level regulatory licenses after circulation market value exceeds $10 billion, andintroduction of custodian institutions will add layer after layer of insurance locks to the stablecoin track.Of course, whether the door behind the lock is solid is another matter.
4. Greatly opens up the imagination space of the RWA track, with closer integration of on-chain and off-chain worlds.It can be said that stablecoins are the earliest RWA products, with the real-world assets they are bound to being US dollars. With the gradual implementation of the "Genius Act", the introduction and implementation of RWA-related bills are believed to be not far away. Compared to the current crypto market of over $3 trillion, that will be an asset market worth tens of trillions of dollars.
In this regard, the "Genius Act" will provide policy dividends for the US government and US economic development of the digital economy, exploring digital asset potential, and encouraging crypto project development, giving birth to a batch of crypto projects and teams with excellent development prospects. The geniuses carrying the crypto future may be hidden within.
Crypto New Decade: Finance Remains the Main Theme, Crypto Concept Stocks and Stock Tokenization Have Great Potential
Looking from 2025, the crypto population's global proportion has reached a phased peak, and crypto currency investment is still a game for a minority;but on the other hand, in commercial society, everyone has a natural need for commodity exchange, where commodities can be tangible products, items, or intangible labor, virtual assets, digital IPs, etc. Therefore, based on this demand, more convenient, low-cost, and safer crypto payments will eventually penetrate everyone's daily life.
In the next decade (2025-2035), the crypto industry's main theme may gradually shrink from multiple previously market-falsified tracks and fields to the financial field. Thus, crypto concept stocks and stock tokenization arising from crypto IPOs will become the new frontline of the crypto industry.
In some aspects, the stocks of currently listed companies like Strategy, Sol Strategy, and Metaplanet have already become the "dual-nature carriers" of crypto concept stocks and stock tokenization. After BTC's value is recognized on a larger scale and at higher prices, their potential value will be further released.
Visibly, the ETH ecosystem and Solana ecosystem remain the mainstream choices in the industry today.
Conclusion: Satoshi Nakamoto's "Legacy" Finally Realized, but in a Completely Opposite Way
At the end of the article, we still cannot avoid the crypto giant Satoshi Nakamoto who has disappeared from the market view. The ultimate embodiment of his "BTC peer-to-peer payment system" is undoubtedly stablecoins.
However, ironically, he, who embraced the crypto punk spirit, might not have expected that BTC, born to counter the unbridled and increasingly inflated monetary issuance rights of authoritarian governments, would instead give birth to a stablecoin system that is even more "US dollar-centered and US debt-backed".
