Author: Meng Yan's Thoughts on Blockchain
After the U.S. Congress passed the GENIUS Act, President Trump signed it into law on July 18, 2025.
The U.S. passes many laws every year, but this stablecoin legislation will undoubtedly be regarded as one of the most important milestones in modern monetary history, alongside the Bretton Woods Conference and the Nixon Shock.
So far, discussions in the Chinese community about US dollar stablecoins have mainly focused on the innovative opportunities and wealth dividends they bring, with far too little attention paid to the challenges they pose, and even fewer are willing to clearly point out that China is already seriously lagging behind in this field and is in a very passive position.
In fact, it’s not just China; every non-US dollar economy now faces severe challenges.
Due to the technical penetration of blockchain, the near 100% dominance of US dollar stablecoins, and the sudden policy reversal on stablecoin legislation in the U.S., a defensive battle for monetary sovereignty has become unavoidable for almost all countries outside the U.S. Some countries in Latin America and Africa, whether voluntarily or involuntarily, have opened their doors wide, and US dollar stablecoins are starting to penetrate deeply into the daily economic activities of the populace. In Brazil and Argentina, payments with US dollar stablecoins have become very common. In Nigeria, reports suggest that up to one-third of economic activity is conducted using USDT. At this stage, these countries have no capacity to regulate this part of economic activity, let alone tax it. This means that this part of their economic activity is effectively detached from national control on management and fiscal levels, and has been incorporated into the broad US dollar economy.
Most countries cannot sit idly by and watch this digital economic colonization spread, but what should be done? Should we close the door and create our own system, or simply guard against it strictly and prohibit stablecoins? Many countries have done this in the past few years, and it has been proven that this approach is not only ineffective but also poses a more serious potential problem: falling behind in the long-term competition in finance, the internet, AI, and other technological fields. In a sense, the challenges many countries face today are a direct consequence of past passive attitudes.
Simply copying and pasting will also be hard to work. Recently, a large number of financial institutions and enterprises from various countries have announced ambitious stablecoin issuance plans. However, I must say that the idea of obtaining a stablecoin issuance license and then holding a grand launch event, thinking that one can ride the rocket of the stablecoin economy and even secure a place for their national currency in the chain economy, is overly naive. Issuing a stablecoin is simple; the problem is how to distribute it, break out of one’s own ecosystem, and persuade tens of millions or even hundreds of millions of users to abandon their US dollar stablecoins for it. How can you attract thousands of innovators to develop wallets, custody, payment, exchange, lending, and other applications around your stablecoin? How can you get mainstream internet applications like e-commerce, gaming, live streaming, and social media to adopt your stablecoin? If competing with the US dollar in traditional finance is already extremely challenging, then competing with the US dollar in the stablecoin realm is at least ten times harder. To make even a little progress, one must invest unimaginably huge costs and long-term efforts while maintaining extremely clear judgment.
What to do?
Before discussing countermeasures, perhaps we should first ask a question: How did things come to this point?
Blockchain is not a new technology that suddenly emerged, and US dollar stablecoins did not achieve a market cap of $260 billion and 99% market share overnight. The stablecoin revolution is not a surprise attack but a large-scale advance that was announced in advance. Over the past decade, countless experts in the blockchain field have repeatedly reminded that blockchain and digital currency technologies have a dimensionality-reducing advantage over traditional financial systems, and are a strategic technology that requires early planning, layout, and seizing the opportunity. If not actively addressed, the future will be extremely passive. However, regulatory authorities and industries in so many countries have ignored this and have dragged the situation to the passive state it is in now. In contrast, why is there such high sensitivity and strong competition awareness regarding the equally disruptive and highly risky advancements in AI technology? Why can mainstream opinion display such enthusiasm and naive optimism? If we could treat blockchain and stablecoins with half the enthusiasm we have for AI, then today there would not be a scenario where the US dollar dominates the stablecoin space and other currencies can be disregarded. If today there were two or three non-US dollar stablecoins that could compete with the dollar, then in the coming years, the competition around stablecoins would certainly see more variables and excitement.
How unfortunate! How lamentable!
What exactly went wrong?
Was it a lack of timely attention? No. Since 2014, research and discussion around blockchain and digital assets in the country have gone through multiple fluctuations. Whether in academia's forward-looking exploration, the industry's technical experiments, or even including phased research by regulatory agencies, relevant voices and efforts have never ceased. Various think tanks, research institutes, and university laboratories have released in-depth analytical reports, and the financial industry has organized multiple closed-door meetings and simulated exercises within certain limits. It can be said that at least at the knowledge level, we were not unprepared; even the depth and foresight of certain viewpoints are leading internationally.
Was it that the reasoning was not clearly articulated? Not at all. By the time Facebook announced its Libra stablecoin plan in 2019, discussions in the industry regarding blockchain and stablecoins were already very deep. If someone were to go back and review some leading research institutions' reports from that time, such as those compiled by the Digital Asset Research Institute, they would find that all the issues we see and think about today were already identified and considered then. In fact, the discussions on many issues back then were far more comprehensive and profound than what today's short video 'stablecoin experts' present after a three-month crash course.
Was it that the expression was unprofessional? Not really. Many professionals in the financial industry have long voiced their opinions vigorously. For example, Dr. Xiao Feng, a PhD in finance, has been articulating the technical superiority of blockchain since 2016 in very professional language, especially emphasizing the integrated characteristics of blockchain distributed ledger payment, clearing, and settlement. He clearly pointed out that just this one point would bring a hundredfold efficiency and cost advantage, leading to an upgrade of financial infrastructure, an unstoppable trend. This logic is clear, the arguments are professional, and they have been widely disseminated.
Is it because of the chaos in the cryptocurrency market that people have made misjudgments? Perhaps for the public, but for true professionals, this excuse does not hold. As early as 2016, discussions on blockchain in the country clearly distinguished speculative digital currencies from blockchain technology. After 2019, as discussions on 'industrial blockchain' deepened, the industry had already researched the application boundaries and management principles of using blockchain for proof, confirmation of rights, and value transfer. If these studies had been taken seriously, the problem of throwing out the baby with the bathwater would not have occurred.
So why is that?
A few days ago, I heard a statement that at a high-level closed meeting, a financial official admitted that several years ago, they had fully understood the disruptive potential of stablecoins and blockchain technology, but due to the Biden administration's rejection of blockchain, they judged at that time that the technology had no future. They did not expect that after Trump took office, the attitude would change so quickly and push forward stablecoin legislation, leading to the current very passive situation. He concluded that it seems we must adopt a more proactive attitude towards technological innovation in the future.
Coincidentally, I have recently been frequently discussing stablecoin-related topics with traditional finance experts and showcasing the solutions for stablecoin smart payments and digital invoices we have developed. One Wall Street financial expert told me after reviewing them that if these applications were rolled out on a large scale, they would inevitably have a disruptive impact on traditional banking-related businesses, reconnecting the relationships between customers, funds, and business. However, Wall Street is not unaware of this; many large banks have been using blockchain internally for years and are very clear about its advantages and disruptive potential. But they believe that precisely because blockchain is highly disruptive, the regulatory authorities will temporarily suppress its development based on the need to maintain stability in the financial industry.
Other countries are in a similar situation. In Australia, we participated in a pilot program for the central bank's CBDC at the beginning of 2023 and achieved a top rank. The Reserve Bank of Australia highly praised the technical advantages demonstrated by CBDC and stablecoins in this pilot, but after the evaluation, it decided to indefinitely postpone the implementation plans for CBDC and stablecoins. In private communications with central bank officials, they told me that CBDC and stablecoins faced collective resistance from Australian commercial banks, and the entire pilot project was doomed from the start to be merely an innovation show without groundbreaking impact. In Singapore, after years of a tolerant and supportive attitude towards the blockchain and digital asset industry, there have been some changes after this year's election. Analysts have noted that the new government is worried about the potentially disruptive impact of stablecoins and digital assets on the financial industry.
As can be seen, everyone has actually long known the technical advantages of blockchain and stablecoins, and even acknowledged that this is an unstoppable trend. However, due to concerns about the risks they bring and the impact on existing interest structures and institutional frameworks, they have made a deliberate numbness and slowness after careful consideration. In other words, everyone is soberly pretending to be asleep, hoping to prolong the sweet dream a little longer.
Comparing it to AI makes this point even clearer. To be serious, the disruptiveness of AI is in fact equal to or even greater than that of stablecoins and blockchain, its risks are more comprehensive, deeper in degree, and potentially more destructive, with consequences that are less predictable. If suppressing blockchain development is to control risks and maintain stability, then the same should apply to AI. However, in the AI competition, Silicon Valley naturally fired the first shot, so no one hesitated or pondered deeply; everyone immediately armed themselves for the competition and rushed to engage. Yet in the blockchain domain, people have long formed a strange tacit agreement that the first shot to shatter the dream should definitely not be fired by me.
Okay, now Trump has indiscriminately fired this shot, and he is very clear that while everyone else is watching, shirking responsibility, and pretending to sleep, US dollar stablecoins have quietly completed their dominant deployment in the global chain space, covering users, scenarios, liquidity, and developer networks. It can be said that the chessboard is already set, just waiting for the pieces to be placed. What Trump has done is merely to ride the tide and play this already poised trump card, pushing a 'supra-sovereign US dollar network' onto the historical stage with a piece of legislation, throwing down a naked declaration of war before every non-US dollar economy. Externally, it announces that the restructuring of the global monetary landscape has entered a substantial phase; internally, it redefines the collaborative relationship between the US state machinery and technology, finance, and capital markets. For the world, from now on, this will no longer be a topic that can be delayed, blurred, or 'pilot while observing.' It will become an urgent challenge pressing on the desks of the central banks, ministries of finance, and regulators of most countries in the world, an unavoidable reality.
How to respond to this challenge is likely a question that will take many years to answer. But before diving into solutions, we first need to have the courage to face reality and dare to admit: we missed the opportunity, we misjudged the situation, we covered our eyes with our obsession with short-term stability and luck, ignoring the ironclad technological logic.
At the starting point of this new global financial order reconstruction, we may need to set aside arrogance and prejudice and say sorry to blockchain. Not for emotional release, but to re-establish a starting point for understanding. We need to re-recognize the innovative production relationships represented by this technology, to re-embrace the institutional experiments driven by this generation of developers, and to re-plan our position in the global digital value network. Perhaps only in this way can we have a chance to win our place in the digital economy competition that concerns the future global landscape.