Brothers! I just saw big news! White House digital asset policy advisor Bo Hines said that once U.S. stablecoin legislation takes effect, the scale of the cryptocurrency space could soar to $15 - $20 trillion!
Old Y briefly discusses:
Let's first discuss the overall impact on our cryptocurrency space. Previously, everyone was worried about unclear policies and hesitant to invest freely. Now that stablecoins have regulations, it's like giving the market a reassuring pill; whether it’s ordinary investors, institutions, or traditional financial players, they will feel that risks have decreased and will be more confident in investing their money. Moreover, with stablecoins being regulated, they will be more stable and less likely to de-anchor; the market will be more reliable, attracting more capital inflows, and the entire cryptocurrency space will naturally expand.
Now let's look at stablecoins themselves. Stablecoins like USDC, which have been operating in compliance, are practically 'chosen ones.' They will be able to collaborate more smoothly with banks and payment institutions, expanding their business scope, such as cross-border payments and daily settlements, and their circulation and market share will definitely increase. However, USDT is facing some troubles; it hasn’t been under U.S. regulation much before, but now it has to quickly comply with the new rules, submitting reserve proofs and cooperating with audits. If they can’t manage it, they might be restricted by the U.S., and their market share could be taken away. Additionally, banks will also be able to issue stablecoins in the future, like JP Morgan, Citi, and fintech companies like PayPal, entering the competition. The stablecoin market will be even more lively than now.
On the trading platform side, leading compliant platforms like Coinbase have been worried about the non-compliance of stablecoin businesses. Now that policies are clear, they can operate confidently and boldly, and they can also expand their payment business with stablecoins. Users and institutions will trust them more, and their market share will further expand. However, this is not so friendly for smaller platforms, as compliance costs are too high. If they can't keep up, they will likely have to exit the market, and the entire industry will become more concentrated in the leading platforms.
Cryptocurrencies like Bitcoin and Ethereum will also be affected. Bitcoin, as 'digital gold,' will have its identity as a 'compliant hedging asset' become more prominent after the legalization of stablecoins, attracting more institutional investment, and its price is likely to rise.
Ethereum is even more powerful; it is the platform on which many stablecoins operate. The stablecoin market is thriving, and various activities based on Ethereum, such as DeFi lending, cross-chain bridges, and on-chain payments, will experience explosive growth. The network usage rate of Ethereum and its fee revenue will also increase, providing stronger value support. Although the DeFi sector may need to adjust some governance models due to compliance, it will also attract more liquidity and users because of stablecoins, bringing new development opportunities. Cross-border payments and Web3 payments will also become more convenient due to compliant stablecoins, making cryptocurrencies more common in everyday consumption scenarios.
Finally, from an international perspective, the United States took the lead in passing the stablecoin legislation, which is equivalent to gaining 'discourse power' in the global cryptocurrency and fintech field. Other countries and regions will either speed up the formulation or adjustment of their regulatory policies or strengthen cooperation with the United States to jointly regulate the cryptocurrency market. Moreover, the United States will attract more crypto projects and capital inflows, solidifying its leadership position in this field.
Overall, the effectiveness of U.S. stablecoin legislation represents a significant transformation for the cryptocurrency space, presenting both challenges and opportunities. The cryptocurrency market may become increasingly regulated and vibrant in the future. What do you think? Feel free to share your thoughts in the comments!
