On July 15, the well-known finance science popularization UP host 'Xiao Lin Says' released a video titled 'Understanding Stablecoins in One Go' on mainstream platforms such as YouTube, Bilibili, Douyin, and Toutiao, achieving over 'five million' views within 24 hours. This is the first time cryptocurrency content has entered the public eye in a professional and neutral manner, unfolding the background, significance, and related regulations of stablecoins, allowing more users to understand the intricacies in a science popularization format.
First, let’s review the key points summarized in Xiao Lin Says’ video
1. Dollar stablecoins still dominate, but value is crystallized at the 'reach' end
In 2024, stablecoin trading volume surpassed the annual payment total of Visa and Mastercard for the first time. Currently, mainstream dollar-pegged stablecoins (such as $USDT, $USDC) use dollars or US Treasuries as reserve assets, but their actual commercial value primarily crystallizes in the distribution stage. In 2024, the channel distribution fees paid by Circle to Coinbase alone reached $900 million, accounting for 54% of its total revenue. This data clearly illustrates the distribution characteristics of the industry value chain: true commercial dominance is held by platforms that have user reach capabilities.
2. Compliance becomes a watershed for the industry, bringing a 'trust premium'
The video points out that the early negative impressions of cryptocurrencies associated with money laundering and excessive speculation are becoming key barriers to mainstream acceptance. In this regard, Circle's compliance practices provide a successful template—successfully penetrating the mainstream US financial market. With the advancement of the Genius Act, Hong Kong Stablecoin Regulations, and the MiCA EU regulations, this 'compliance premium' is reshaping the competitive landscape of the industry.
3. The geopolitics behind stablecoins
The video points out that the US regulatory attitude toward stablecoins essentially represents an extension of dollar hegemony in the digital age. This competitive situation has led traditional financial institutions to enter the arena: banks are worried about their payment and settlement businesses being eroded, and tech giants are eyeing the financial infrastructure dividends. It is particularly noteworthy that regulators currently strictly limit stablecoins to the payment industry and remain highly vigilant about their derivative financial services; this policy direction will continue to influence the evolution path of the industry.
The significance of this boundary-breaking video lies precisely in providing us with a rare 'external perspective'—through the feedback of 5 million ordinary viewers and the high-frequency keywords in the comments section, we can see the mainstream market's true understanding and expectations of the cryptocurrency industry—compliance anxiety and practical utility doubts.
Cryptocurrency compliance and user asset safety
In Xiao Lin Says' video, the compliance of exchanges and user asset safety occupy significant portions, with a focus on OKX. For ordinary users, the core concern regarding cryptocurrency is not 'whether it can be profitable', but 'whether the funds are safe'. The numerous comments from non-crypto users in the video’s comment section also reflect their concerns about regulatory compliance, fund safety, and whether there is a risk of 'Ponzi schemes'. These concerns are the threshold the industry must cross to gain widespread acceptance.
After all, the lessons of history are vivid: in 2014, Japan's Mt. Gox lost 850,000 bitcoins due to hacking and mismanagement; in 2022, FTX collapsed due to misappropriation of user funds, with a market value of tens of billions of dollars dropping to zero overnight. These events not only severely impacted industry confidence but also had significant effects on the market:
At the beginning of 2023, the total market value of cryptocurrencies was approximately $800 billion, far below the peak in 2021 (3 trillion)
In 2023, the total amount of crypto financing was only $9.5 billion (according to Messari data), a 69% decrease compared to 2022 ($30.7 billion), marking a new low since 2020.
The 2023 banking crisis (closure of Silvergate, Signature) disrupted fiat channels: cryptocurrency companies faced increased difficulties in dollar inflows and outflows, leading to decreased liquidity, reduced financing, and retail investors exiting the market, entering a 'winter' period where the entire industry pays a painful price for regulatory shortcomings. Embracing cryptocurrency compliance is a more challenging path, as it entails high costs.
The video particularly emphasizes the concept of 'Proof of Reserves (PoR)'. Compared to the reserve models of traditional financial institutions and the multi-layered intermediary models of institutional custody, a clear proof of reserves (PoR) exists similarly to a listed company's balance sheet, and is even more immediate and transparent. There is a lot of hidden yet valuable information within, such as the proportion of mainstream assets, which can be equated to the proportion of core assets; the asset reserve ratio can be equated to an effective indicator of solvency.
Monthly proof of reserves is now a standard feature of mainstream trading platforms. Observing OKX's practices over the past two years, it has not only met basic disclosure requirements but also established an on-chain monitoring system, capable of real-time tracking of suspicious addresses and risk warning. From OKX's 'CEX + Wallet + Pay' integrated strategy, it is clear that this is their commitment to the safety of global users and product experience. Likewise, we can see that Circle's adherence to compliance has won recognition in the US market, which is a long-term credit certification and a response to investors, users, and regulators.
Global payment with stablecoins is just the starting point; application is the ultimate goal
When discussing the 'global payment system of stablecoins', Xiao Lin Says raised a key point in the current development of stablecoins: although regulatory agencies in various countries still focus on the payment attributes of stablecoins, their future potential goes far beyond this. As the legislative process for stablecoins accelerates, global giants are making moves:
PayPal launched $PYUSD in August 2023, becoming the first payment giant to issue a stablecoin
Ant Group, JD.com, and other internet companies are actively applying for stablecoin licenses in Hong Kong
Traditional financial institutions such as Standard Chartered Hong Kong and China Merchants Bank International are also exploring stablecoin business through joint ventures or sandbox testing
Currently, more than 40 companies have applied for stablecoin licenses in Hong Kong, and JPMorgan CEO Jamie Dimon has also stated that he does not understand the appeal of stablecoins, but he will not stand idly by. The industry is currently in a critical transformation period: although major institutions are scrambling to layout stablecoin issuance rights, there is still no unified understanding of the true value and development path of stablecoins in the entire market.
As the barriers to issuance lower, true differentiation will manifest in the ability to construct business scenarios. For example, in cross-border payments and e-commerce partnerships, using stablecoins to replace traditional bank remittances (saving 3-5% in handling fees); facilitating merchant access: promoting the use of stablecoins in scenarios such as travel, gaming, and e-commerce; expanding participation in DeFi, lowering barriers; and crucially, through compliant channels: enabling fiat currency exchange via licenses, allowing stablecoins to be truly 'usable'.
This is also why Meta plans to embed payment features through WhatsApp to create stablecoin applications in social scenarios; Coinbase focuses on building digital wallets with social and gaming attributes; OKX starts from user demand scenarios, emphasizing digital currency payments and on-chain connectivity.
OKX has established a compliant channel for real-time 1:1 exchange of US dollars and $USDC through collaboration with Circle, while optimizing the fiat currency in-and-out process in conjunction with banks. At the same time, users can complete stablecoin transfers through the OKX Pay app or make payments at POS terminals. The true commercial value of stablecoins can only be fully realized when users are able to make various scenario payments with stablecoins and conveniently exchange them with fiat currency.
It is evident that companies related to stablecoins are accelerating their collaboration to build an ecosystem, forming multi-synergistic partnerships in issuance technology, ecological applications, and distribution channels, leading to fierce competition. For example, Circle and Coinbase's collaboration established the issuance and distribution system for $USDC; the Global Dollar Network collaborates with over 30 top industry companies, including mainstream US trading platform Robinhood, cryptocurrency exchange Kraken, and crypto financial service company Galaxy Digital.
Recently, the Global Dollar Network (GDN) announced the issuance of the $USDG stablecoin in the European Union and declared OKX as a core partner. This is currently the 'only' stablecoin clearly recognized by regulators in both Singapore and the EU following $USDC, covering over 3 billion users across 450 countries/regions.
Image source: Xiao Lin Says
Conclusion: Long-termism behind breaking the boundary
Compliance is becoming the entry ticket, and application scenarios determine the ceiling: when ordinary users can easily use stablecoins for cross-border payments and daily consumption as shown in the video, cryptocurrencies can truly integrate into real life.
Every milestone in the industry's development has not come easily. Every moment of breaking through the cryptocurrency industry, every individual or brand that steps into the mainstream spotlight, reflects long-term persistence and effort. Each of their steps is a careful layout, a bold attempt, and a firm belief—this is what has brought them to where they are now, in front of us, and only in this way can they become representatives of cryptocurrency builders.
Xiao Lin Says' boundary-breaking video not only marks the start of a financial industry's innovation revolution led by stablecoins but also serves as a microcosm of the long-term efforts of cryptocurrency industry builders. I believe this is not merely a simple moment of being 'seen'.
This article is reproduced with permission from: (PANews)
Original title: ('Xiao Lin Says' focuses on stablecoins: 5 million views in a single day, the cryptocurrency industry is accelerating its breakthrough)
Original author: Pan Zhi Fou
'Internet celebrity Xiao Lin says popularizes stablecoins! 5 million views in a single day, has cryptocurrency broken through?' This article was first published in 'Crypto City'
