The stablecoin revolution is not a surprise attack but rather a decade-long layout, with regulatory agencies in various countries responding slowly.
Written by: 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, local time.
The United States passes many laws every year, but this time the stablecoin legislation will certainly be regarded as one of the most important milestones in the history of modern currency, comparable to the Bretton Woods Conference and the Nixon Shock.
So far, discussions in the Chinese community regarding dollar stablecoins have mainly focused on the innovative opportunities and wealth dividends they bring, while attention to the challenges they pose is far from sufficient. Even fewer people are willing to point out clearly that China is already seriously lagging in this field and is in a very passive situation.
It is not just China; every non-dollar economy is facing severe challenges.
Due to the technical penetration of blockchain, the near-100% dominance of the dollar stablecoin, and the sudden reversal in U.S. stablecoin legislation, a proactive offensive has been launched, making a defense of monetary sovereignty unavoidable for almost all countries outside of the U.S. Some countries in Latin America and Africa, whether voluntarily or involuntarily, have already thrown open their doors, allowing dollar stablecoins to advance rapidly and integrate into the daily economic activities of the people. In Brazil and Argentina, dollar stablecoin payments have become deeply ingrained and extremely common. In Nigeria, reports indicate that as much as one-third of economic activities are conducted using USDT. At this stage, these countries have no ability to regulate this part of economic activity, let alone impose taxes. This means that this part of their economic activities has essentially detached from national control at the management and fiscal levels, effectively being incorporated into the broad dollar economy.
Most countries cannot sit idly by while this digital economic colonization spreads, but what should be done? Should we close the door and create our own system, or simply guard against it and prohibit stablecoins? Many countries have done just that in recent years, and the fact proves that this approach not only fails to work but also poses a more serious potential problem: falling behind in the long-term competition in finance, the internet, AI, and other technological fields, resulting in a complete lag. In a certain sense, the challenges many countries face today are a direct consequence of past negative attitudes.
Simple copy and paste is hardly effective. Recently, a large number of financial institutions and companies in various countries have announced ambitious plans for stablecoin issuance. However, I must say that the idea that one can obtain a stablecoin issuance license, hold a grand launch event, and then ride the rocket of the stablecoin economy to success, even gaining a foothold for their national currency in the on-chain economy, is rather naive. Issuing a stablecoin is easy; the real challenge is how to distribute it, spill out of your own ecosystem, and persuade millions or even billions of users to abandon their dollar-pegged stablecoins and use yours. How can you attract thousands of innovators to develop wallets, custody, payments, exchanges, 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 dollar in traditional finance is already extremely difficult, then competing with the dollar in the stablecoin space is at least ten times harder. To make even a little progress, one must invest unimaginably large costs and long-term efforts while maintaining an extremely clear judgment.
What should be done?
Before discussing countermeasures, I fear we should first ask a question: How did things come to this point?
Blockchain is not a sudden new technology, and dollar stablecoins did not achieve a market cap of $260 billion and a 99% market share overnight. The stablecoin revolution is not a surprise attack, nor is it a sneak attack; rather, it is a grand advance that was proclaimed in advance. Over the past decade, countless experts in the blockchain field have repeatedly warned that blockchain and digital currency technology have a dimensionality reduction advantage over traditional financial systems and represent a strategic technology that needs to be planned and laid out in advance to seize the initiative. Failing to respond actively will lead to a very passive situation in the future. However, regulatory authorities and the industry in so many countries have turned a blind eye to this and insisted on dragging things to the current passive situation. In contrast, why is there such high sensitivity and strong competitive awareness regarding the progress of AI technology, which also has disruptive potential and significant risks? Why can mainstream public opinion display such enthusiasm and an optimistic yet naive attitude? If only we could apply half the proactive approach we take toward AI to blockchain and stablecoins, then today we would not find ourselves in a situation where the dollar reigns supreme in the stablecoin field while other currencies are negligible. If today there were two or three non-dollar stablecoins that could stand up to the dollar, then the competition surrounding stablecoins in the coming years would surely have more variables and excitement.
What a pity! How lamentable!
What exactly went wrong?
Is it that we did not draw attention in time? No. Since 2014, research and discussion surrounding blockchain and digital assets in the country have gone through several ups and downs. Whether it is the forward-looking explorations in academia, the technological experiments in the industry, or even the periodic research by regulatory agencies, the relevant voices and efforts have never ceased. Various think tanks, research institutes, and university laboratories have produced in-depth analytical reports, and the financial industry has organized multiple closed-door meetings and sandbox exercises to a certain extent. It can be said that at least on the knowledge level, we were not unprepared; some viewpoints are even leading internationally in terms of depth and foresight.
Is it that the reasoning hasn't been clearly articulated? Not at all. When Facebook announced the 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 at that time, such as the reports compiled by the Digital Asset Research Institute, it should be noted that all the problems we can see and think of today were already seen and thought of back then. In fact, many discussions on various issues at that time were much more comprehensive and profound than those of today’s short video 'stablecoin experts' who learned in just three months.
Is it that the expression is unprofessional? No. Many professionals in the financial industry have long voiced their opinions strongly. For example, Dr. Xiao Feng, a PhD in finance, has been articulating the technical superiority of blockchain in very professional terms since 2016, especially emphasizing the integrated features of blockchain's distributed ledger payment, clearing, and settlement. He clearly pointed out that just this point alone will bring hundreds of times the efficiency and cost advantages, ultimately leading to an upgrade of financial infrastructure, an unstoppable trend. This logic cannot be considered unclear, and the argument cannot be deemed unprofessional, and it has gained widespread dissemination.
Is it the chaos in the cryptocurrency circle that led to people's misjudgment? Perhaps for the public, but for true professionals, such an excuse is untenable. As early as 2016, in domestic blockchain discussions, there was a clear distinction made between speculative digital currencies and blockchain technology. After 2019, as discussions on 'industrial blockchain' deepened, the industry had already studied the application boundaries and management principles for using blockchain for proof, rights confirmation, and value transfer. If these studies had been given due attention, the problem of throwing out the baby with the bathwater would never have occurred.
So what is the reason?
A few days ago, I heard a statement that at a high-level closed meeting, a financial official admitted that several years ago, there was already a full understanding of the disruptive potential of stablecoins and blockchain technology, but due to the Biden administration's rejection of blockchain, it was then judged that the technology had no future. Unexpectedly, after Trump took office, the attitude changed so quickly and pushed forward stablecoin legislation, catching everyone off guard and resulting in a very passive situation. He summarized that it seems that in the future, we must adopt a more proactive attitude towards technological innovation.
Coincidentally, I have recently frequently exchanged ideas with traditional finance experts on topics related to stablecoins and presented the solutions we developed for stablecoin smart payments and digital invoices. One Wall Street financial expert told me that if these applications are widely rolled out, they will inevitably have a disruptive impact on traditional banking-related businesses, reconnecting customers, funds, and business relationships. 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 feel that precisely because blockchain is highly disruptive, the regulatory authorities will inevitably suppress its development temporarily based on the need for stability, 'to maintain stability in the financial industry.' During the Biden administration, the authorities indeed maintained such a tacit understanding with Wall Street. If it were not for someone like Trump, who likes to overturn tables, taking office, and if it weren't for the unexpected changes in the relationship between the Federal Reserve, Wall Street, and the White House, it would be hard to imagine that the U.S. government would unleash the tiger of stablecoins at this time.
Other countries face similar situations. In Australia, we participated in the pilot of the central bank's CBDC at the beginning of 2023 and received a top ranking. The Reserve Bank of Australia highly praised the technological advantages shown by CBDC and stablecoins in this pilot, but after the evaluation, it decided to continue to hold back, indefinitely postponing the rollout 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 fated from the beginning to be merely an innovation showcase without any breakthrough impact. In Singapore, after years of a tolerant and supportive attitude towards blockchain and the digital asset industry, there have also been some changes following this year’s elections. Analysts believe that the new government is concerned about the potentially disruptive impact of stablecoins and digital assets on the financial industry.
As can be seen, everyone actually already knows the technological advantages of blockchain and stablecoins, and even agrees that this is an inevitable trend, but due to concerns about the risks they bring and the impact on existing interest patterns and institutional frameworks, they have made a deliberate numbness and sluggishness after careful consideration. Or to put it simply, everyone is consciously pretending to be asleep, hoping to prolong their sweet dreams.
Comparing with AI makes this even clearer. Seriously speaking, the disruptive potential of AI may surpass that of stablecoins and blockchain, with broader risks, deeper levels, greater potential destructiveness, and more unpredictable consequences. If suppressing blockchain development is to control risks and maintain stability, then the same applies even more to AI. However, in the AI competition, Silicon Valley naturally fired the first shot, so no one hesitated, no one was indecisive, and no one pondered deeply; everyone immediately armed themselves for the competition and went all out. Yet in the blockchain space, people have long formed a strange tacit understanding: the first shot that shatters the sweet dream must not be fired by me.
Now, Trump has decisively fired this shot, and he is very clear that during the time everyone was watching, shirking responsibility, and pretending to be asleep, dollar stablecoins have quietly completed their dominant deployment in the global on-chain space, covering users, scenarios, liquidity, and developer networks. It can be said that the chessboard has already been set up, just waiting for the pieces to be placed. What Trump has done is merely to ride the wave and play this already poised trump card, pushing a 'supra-sovereign dollar network' onto the historical stage with a piece of legislation, throwing down a blatant challenge to every non-dollar economy. Externally, it announces that the restructuring of the global monetary landscape has entered a substantive phase; internally, it redefines the collaboration between the U.S. national machinery, technology, finance, and capital markets. For the world, from now on, this will no longer be a topic that can be delayed, blurred, or treated as a 'pilot project while observing'; it will become an urgent matter pressing on the desks of the central banks, finance ministries, and regulators of most countries in the world, an unavoidable and inescapable reality challenge.
How to respond to this challenge is likely a question that will take many years to answer. But before we begin to solve the problem, we first need the courage to face reality, to dare to admit: we missed the opportunity, we misjudged the situation, and we blinded ourselves with an obsession with short-term stability and luck, ignoring the ironclad technological logic.
At this starting point of the reconstruction of the new global financial order, perhaps we should first put aside our arrogance and prejudice and say sorry to blockchain. This is not for emotional release, but to re-establish a starting point for understanding. We need to re-evaluate the revolutionary production relations 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 do we have a chance to win our place in the digital economy competition that concerns the future global landscape.
