On July 18, the GENIUS Act was officially signed into law by President Trump, triggering widespread attention to stablecoins around the world. After some pioneers in the blockchain industry called for ten years, and the mainstream media's attitude towards this field changed repeatedly, related discussions finally broke out of the circle. For a time, whether in the Internet industry, the traditional financial industry, or the macro policy discussion circle, stablecoins have become the hottest topic. People are beginning to rethink the impact and impact of large-scale applications of digital currencies on the Internet, artificial intelligence, finance, and even the geopolitical economic situation. However, under the heat, a large number of cognitive confusion, information distortion, and even misleading views have emerged, and are widely spread through self-media, causing some cognitive misunderstandings. The root cause is that these discussions are too broad and do not take into account that stablecoins are one of the products of blockchain technology innovation, and do not discuss the nature and application of stablecoins from a technical logic perspective. For this reason, I once again had a conversation with Dr. Xiao Feng to discuss this issue.
Meng Yan: Dr. Xiao, since our last conversation, the situation has progressed rapidly as expected. Now that the GENIUS Act has been passed, I have observed that attention to stablecoins in the Chinese community has risen rapidly, almost to the level of national discussion. A friend of mine just came back from Hong Kong and told me that everyone in Hong Kong is talking about stablecoins, which is really 'a situation that has never been seen before'. You are in Hong Kong, so you must feel it more deeply.
Xiao Feng: It is indeed a situation that has not been seen for many years. Not only is there discussion, but also action is very active. Hundreds of companies and institutions are lining up to participate in stablecoins, and news about RWA-related actions is updated every day. We now receive many cooperation intentions every day. The significance of the GENIUS Act is not only to clearly establish the legality and sovereign attributes of 'US dollar stablecoins' in the US legal system, but also to convey a clear signal that blockchain and crypto assets are beginning to move from the gray area to the mainstream financial system, and a new revolution in financial infrastructure has officially started. It is not surprising that Hong Kong, as a global financial center, has shown such sensitivity in this new trend.
Seeing this situation, I do have some feelings. As a historical experience, being actively enterprising and boldly trying in the face of new technologies can almost always obtain huge returns. History almost always stands on the side of those who are optimistic and enterprising about new technologies.
Meng Yan: But I also see some hidden worries - this wave of stablecoin opportunities came very suddenly, and many people were not prepared at all before, and there is a gap in cognition. Many people even heard about stablecoins for the first time three months ago, swallowed them whole, heard them by chance, and were half-knowledgeable. They began to claim to be experts on self-media and amplified their voices to spread many views. Some of these views, I am afraid, are misleading.
Xiao Feng: I have recently seen a large amount of self-media content, and I feel the same. Of course, first of all, I am very happy with the current discussion atmosphere. Isn't such a situation where the whole society is hotly discussing stablecoins exactly what we have been seeking for so many years? Looking at it now, this industry is ushering in a great era. In the next few years, stablecoins, RWA, token economy, coin-stock linkage, and the integration of crypto and AI will be very lively and exciting.
However, at this time, we should be calmer and turn around to consolidate our understanding. According to past experience, once spring arrives and the temperature rises, it is easy to breed various specious cognitions and concepts, and some sensational and wrong views are easily popularized, planting the seeds of risk in the market. Cognition and concepts are very important. The ups and downs of the crypto market in the past and the diversions and emotional ups and downs of the industry are actually the result of wrong concepts.
First of all, we must have an appropriate estimate of the environment. Many people think that the United States has passed the legislation, and the crypto industry in Hong Kong and even China will be fully liberalized immediately, and they have even begun to lay out the plan based on this premise. This is definitely unrealistic. There are still many problems to be solved in regulation, and this takes time. The final landing plan will inevitably be in accordance with the rules, and it is impossible to let go. I will give a simple example. Will stablecoins lead to more convenient money laundering after leaving the banking system? Therefore, any responsible regulator will put forward very strict requirements for anti-money laundering of stablecoins.
In addition, there are relatively large misunderstandings, or even errors, in the understanding of stablecoins, RWA, and blockchain. This incident happened suddenly, and indeed many people 'stood on the cusp of the storm as soon as they entered the industry', with enthusiasm and traffic, but with a deficit in cognition and no time to make up for it, so their judgments are relatively rough. We also have a responsibility to point out this situation.
Discussing stablecoins cannot be separated from their technical attributes
Meng Yan: I see that most of the discussions about stablecoins now only talk about the financial narrative of stablecoins, and rarely mention technology. Does everyone think that the technology of stablecoins and blockchain has matured to the point where it can be ignored? In the process of communicating with many traditional financial people, I found that most of them have little or no basic blockchain product usage experience, are unfamiliar with DeFi, and have even less experience in losing keys or suffering from hacker attacks. However, when it comes to building stablecoin applications and systems, they show super confidence in their words, as if blockchain is already a tool that they can manipulate, control, and use freely. Many people walk into a dark forest that they are actually completely unfamiliar with with an arrogance of 'regular army', full of familiar processes, models, and regulatory frameworks from traditional finance, thinking that they can 'migrate' to the chain. But they ignore the fact that blockchain is a completely new computing paradigm, and its operating logic, system boundaries, risk structure, and user behavior are completely different from traditional finance. They seem to be completely unaware that blockchain is far from mature in technology, and still faces many challenges in terms of user experience, security, and compliance support. The chain is full of crises, from private key management, smart contract vulnerabilities, to phishing attacks, cross-chain bridge attacks, Oracle manipulation, to regulatory arbitrage and gray fund flows, any link may become the trigger for systemic risks. If you don't understand these technical details and don't master the real on-chain operation logic, your beautiful business strategies and imagined ecological closed loops are likely to be defeated by the tide of user complaints, compliance incidents, and security incidents once they enter practice.
More importantly, blockchain technology itself is still in a period of rapid evolution. The leading protocols and products of today may be subverted by a new generation of architecture tomorrow. Modular blockchain, zero-knowledge proof, account abstraction, on-chain governance, re-staking economy, MEV management... These key technical routes and mechanism designs are still constantly refreshing the original understanding. We people who have been working hard in the industry for more than ten years, if we don't study for a period of time, our knowledge may be outdated, and the solutions we design may be backward. If you don't fully understand and track technological progress, it is impossible to win in such a fierce global competition.
Xiao Feng: Your reminder is very important. Recently, I have seen many biased or completely wrong comments on stablecoins and RWA tokenization. The root cause lies in deviating from the underlying technical logic. Everyone should understand that there is blockchain technology, distributed ledgers, and new financial infrastructure first, and then there are various tokens, including stablecoins, and then there are RWA and DeFi.
I am a typical financial person, a PhD in economics trained after China's reform and opening up, and I have been engaged in the financial industry as soon as I started working. Therefore, I can give some sincere advice to my colleagues in the financial industry, that is, we must attach importance to the research of technology. Discussing stablecoins cannot be separated from their technical attributes, otherwise it is easy to become castles in the air.
I first came into contact with blockchain in 2013. What really attracted me was that after in-depth research, I found that there was an extremely subtle and powerful fit between the innovation in the underlying technical architecture of blockchain and the deep structure of the financial system. In the past ten years of practice, I have realized more deeply that this industry is a technology-led industry at this stage. You can have financial intuition, but if you don't understand technology, you will soon get stuck in practice. So in these ten years, I have spent a lot of time learning the underlying principles and cutting-edge technologies of blockchain.
I am still learning today. I also constantly remind the entrepreneurs around me that you may not write code, but you must have technical judgment. Especially in the field of DeFi, the future competition is not between licenses, nor between brands, but between protocols, architectures, and system efficiency. Whoever can continuously iterate in terms of account system, cross-chain capabilities, clearing and settlement efficiency, privacy protection, on-chain compliance, and risk control modules will occupy a stronger market position. Conversely, if you don't understand blockchain technology and don't keep up with the pace of technological evolution, then your strategy may be castles in the air. This is not an exaggeration, but a true reflection of today's industry competition. In this context, technology is not only a competitive advantage, it is a lifeline. If you don't see this underlying logic, you may seriously misallocate resources in commercial practice. Your seemingly beautiful ideas will definitely stumble and run into obstacles everywhere in practice.
Meng Yan: Yes, the nature of stablecoins is determined by their technical attributes.
Xiao Feng: In fact, the nature of every currency in history has been strongly influenced by its technical attributes. There have been three crucial property changes in the history of currency development. The first is natural attribute currency, which has thousands of years of history. Whether it is shells, silver, or gold, its value is rooted in the scarcity and natural endowment of its physical existence. The second is legal attribute currency, which has hundreds of years of history. Its value is given mandatory force by national legislation and relies on national credit endorsement. The third, which is now rising, is digital currency with Bitcoin and stablecoins as its banner, which is technical attribute currency, and its value is guaranteed and endorsed by digital technology systems such as cryptography, blockchain (distributed ledger), digital wallets, and smart contracts.
Therefore, when we study stablecoins, we should always remember its origin and not put the cart before the horse. First is the innovation of blockchain technology, second is the innovation of distributed accounting methods, and third is the emergence of new financial market infrastructure based on blockchain and distributed ledgers, and then there are stablecoins, RWA, and token economics. This does not depend on human will. The United States just saw this trend and followed it, and the United States legislation gave crypto legality and compliance endorsement. Next year will be the first year that traditional financial institutions, traditional funds (including pensions), and traditional investors begin to enter the crypto market through legitimate channels.
Doing stablecoins without understanding blockchain will 'wear new shoes and walk the old road'
Meng Yan: It is precisely because there is such an obvious major trend that many traditional institutions are now highly enthusiastic. However, I have recently participated in many discussions on stablecoin payment and RWA projects, and I feel that many people underestimate the disruptive nature of stablecoins and blockchain at the financial model level. Their designs basically do not take into account the characteristics of blockchain as a new infrastructure. I am not polite to say that it is 'wearing new shoes and walking the old road'. In their minds, stablecoins are just a tool. The people are still the same people, the things are still the same things, the model is still the same model, the process is still the same process, and the entire system is still doing the same things in the original way. They are just using stablecoins and blockchain in a specific link to improve efficiency and reduce costs.
This reminds me of the early days of Internet e-commerce. At the end of the 1990s, when the Internet was just emerging, people's biggest question about the Internet was 'no business model', and e-commerce was one of the few Internet business models that people could understand at the time, so many companies wanted to do e-commerce. However, their understanding of e-commerce was to regard the Internet as a tool, a new sales channel, an improved and efficient telephone sales, simply adding a 'shopping mall' channel to the portal website, and adding an e-commerce department, thinking that this was doing e-commerce. The business process remains unchanged, the organizational structure remains unchanged, and the way of thinking remains unchanged. It was not until the rise of platforms such as Amazon and Taobao that people realized that the Internet is not a tool, e-commerce is not a tool, and that the entire consumer behavior, inventory logic, fulfillment system, and traffic distribution have changed. Then in the following ten years, the traditional retail model was suppressed by e-commerce, and it was subverted piece by piece, with almost no power to fight back. I remember in 2013 and 2014, many bosses complained and regretted not understanding e-commerce in those years.
It's the same today, stablecoins are definitely just tools at first, but they are by no means just tools. Once a billion users install digital wallets and start using stablecoins, they will gradually discover that stablecoins are not just for payment, they are connected to a whole set of on-chain financial systems and economic structures. This structure does not require a complex account system. The user entry point is a 'wallet', not an 'account'; the interaction method is smart contracts, not manual approval; the connection method is on-chain protocols, not intermediary matchmaking. Under this model, many of the 'intermediary powers' that traditional institutions have in the original system will become invalid, and new entry points and hubs will rapidly rise. The stablecoin economy is not just about using new tools to transform old systems, but about using new systems to eliminate old systems, absorb old systems, and ultimately reconstruct the operating logic of the entire financial industry. This is the deep change that we must truly value.
I feel that many people seriously underestimate this point. Many people overestimate the short-term impact of AI. For example, some companies hurriedly laid off employees last year and used AI to replace work, and even ran to the media to publicize it. As a result, they had to call the employees back after a few months. However, when facing stablecoins, they easily underestimate their disruptive nature. When they see stablecoins, they will think in their minds that my process can use stablecoins in this way, and my business can increase support for stablecoins in that way, but it is difficult to recognize that after the deep application of stablecoins, his process, his business, and even his department and his own role may be superfluous.
Xiao Feng: In my opinion, the crux of the situation you mentioned is still the lack of understanding of the underlying technology of blockchain, or distributed ledger. Because distributed ledger actually changes the underlying infrastructure on which we run the financial system. Many people seriously underestimate the impact of this matter. They feel that no matter how you change underneath, I will do what I should do on top. But blockchain is not a technology that can be 'painlessly upgraded'. It is a technological change that affects the whole body, and all superstructures must be reconsidered. This is called disruption.
To truly understand stablecoins, it is necessary to first sort out their development background. Stablecoins are built on the basis of distributed ledger technology. Distributed ledger technology is the third iteration of human accounting methods in thousands of years.
The first was single-entry bookkeeping. Judging from the currently discovered clay tablet accounts in the Sumerian region, single-entry bookkeeping was used, which only recorded income and expenditure.
Around 1300 AD, double-entry bookkeeping appeared in Italy. This method not only recorded income and expenditure, but also recorded assets and liabilities. In the subsequent 700 years, the calculation method was only optimized, and no new iterative version appeared.
It was not until the emergence of the Bitcoin blockchain in 2009 that a new calculation method, namely distributed accounting, first appeared. The biggest difference between distributed accounting and previous accounting methods is that previous accounting methods were all about recording their own accounts, which belonged to private ledgers. For example, a remittance from Beijing to New York involves multiple institutions, and all the information on these institutions' private ledgers needs to be aligned, which takes a certain amount of time and cost. However, a distributed ledger is a public ledger, and institutions and individuals around the world record transactions on the same ledger, so there is no need for many institutions to align information, and both parties can directly complete payment in a peer-to-peer manner, which is the biggest difference between the two calculation methods.
After the emergence of the Bitcoin blockchain, stablecoins began to appear in 2014. In the process of continuous engineering experiments, continuous maturity, and continuous optimization of distributed ledger technology, two trends have emerged: on the one hand, since 2009, people have created Bitcoin, Ethereum, etc. 'out of nothing' on the blockchain, which are called 'digital natives'. On the other hand, since 2014, the emergence of stablecoins represented by USDT marks the emergence of another trend, namely 'digital twins'. The so-called digital twin refers to an asset that already exists in the real world, such as the US dollar, which is introduced into the blockchain and tokenized, that is, mapping the existing asset to the chain in a digital way.
At the same time, with the approval of the launch of Bitcoin ETFs in the United States and Hong Kong last year, a new phenomenon has emerged: digital native assets are transferred from on-chain to off-chain, that is, the asset body is still on-chain, but its financial expression such as ETF shares has entered the trading system of the traditional financial system. Bitcoin ETFs are listed on the New York Stock Exchange (NYSE) and the Hong Kong Stock Exchange (HKEx). Investors can invest and trade them according to the stock trading mechanism. Bitcoin itself exists on-chain, while Bitcoin ETFs exist off-chain. Therefore, this process involves the conversion of On-Chain and Off-Chain, as well as the interaction of digital twins and digital natives.
In the past ten years of practice of distributed ledger technology, if it is regarded as a social engineering experiment, you can see the changes and gradually prove the value of these technologies.
Based on distributed ledger technology, financial market infrastructure has also undergone significant changes since 2009. These changes are based on the transformation of distributed accounting methods. Financial market infrastructure mainly includes a series of mechanisms such as payment, transaction, clearing, and settlement. So what is new compared to the old mechanism? What are the characteristics of the old and new mechanisms?
Currently, the financial infrastructure assets we rely on adopt a central registration, central custody, central counterparty trading, and central clearing model, requiring the collaboration of at least 3 institutions to complete the clearing and settlement of a transaction. However, on a distributed ledger, because all participants record transactions on the same ledger, the transaction model is transformed into peer-to-peer transactions, where any two people can directly complete transactions without the need for intermediaries.
The current settlement model of financial market infrastructure is net settlement, while the settlement model on the distributed ledger is gross settlement. That is to say, once the transaction is confirmed, the settlement is completed, and the money and goods are delivered. From the perspective of the stock market, the New York Stock Exchange will launch a 5x23-hour trading model by the end of this year, reserving one hour for clearing after the end of the trading hours; while Nasdaq will launch a 5x24-hour trading model in the future. However, Nasdaq cannot achieve this goal within this year because under the old financial infrastructure, the trading process must be suspended for a period of time for clearing. In contrast, Hong Kong's virtual currency exchanges have achieved 7x24-hour trading without holidays, which is precisely because their ledger types are different, resulting in different financial market infrastructures. This is also one of the backgrounds of stablecoins, that is, they are built on new financial market infrastructure.
Since the launch of the Bitcoin blockchain mainnet in January 2009, this system based on distributed ledgers has been running stably and continuously for more than sixteen years. Even if viewed solely from the perspective of large-scale engineering practice, it can be called a new generation of financial market infrastructure (FMI) that has undergone countless rigorous 'destructive tests' and is fully qualified to be put into a production environment.
Many people think that whether you are a new FMI or an old FMI, don't you have to support efficient, safe, and credible rules, systems, architectures, and regulatory frameworks for payment, transaction, clearing, and settlement? What impact does it have on my business model?
The impact is very big! The reason why FMI based on distributed ledgers is crowned with the name 'new generation' is that it disruptively reconstructs three core rules.
First, decentralized exchange, eliminating central counterparty (CCP) and achieving true peer-to-peer (P2P) transactions.
Second, gross settlement, abandoning net settlement, adopts a gross settlement model.
Third, Delivery versus Payment (DvP), no longer relying on netting, achieves atomic synchronous transfer of assets (such as tokens) and funds (such as stablecoins) through smart contracts, ensuring instant achievement of transaction finality.
This architectural revolution brings significant advantages, with a significant reduction in links, a significant reduction in fees, and a geometric increase in efficiency. Reality confirms this efficiency gap: currently, the intraday trading volume of the New York Stock Exchange (NYSE) and Nasdaq (Nasdaq) accounts for less than 50% of the total US stock trading volume. Emerging channels such as after-hours trading and dark pool trading continue to erode the share of traditional exchanges. Although the two major exchanges have announced extensions of trading hours to meet the challenges, due to the clearing and settlement system of the traditional FMI (such as the current T+2 clearing system in the United States), NYSE's stock clearing can only be close to 5x23 hours no matter how optimized (approximately 1 hour of clearing window must still be reserved every day), otherwise the system will fall into chaos. In contrast, crypto asset exchanges have already achieved 7x24-hour all-weather, global non-stop trading capabilities relying on the new generation of FMI. This is a vivid embodiment of the difference between the new and old financial market infrastructures.
But it's not just that. Blockchain brings to the financial industry the same thing that the Internet brings to the publishing, media, communications, film, education and retail industries. It is not a simple efficiency tool, but will change the entry point for users to access financial services, change business processes, reconnect the relationships between markets and various roles in the industry, change the value chain of the financial industry, and lead to major changes in the way we do finance. Now the stablecoin economy is no longer 'replacing one link in the old system', but is building a new system, a new market, and a new industry network. This structural change will make some institutions completely lose their value, and will also breed a batch of new platform-level organizations and new financial applications. At least four have emerged:
First, Bitcoin, as a new type of asset allocation tool, its application scenarios are expanding from family wealth allocation to corporate cash management, and even rising to national strategic reserves.
Second, stablecoins, as revolutionary payment and settlement tools, have been legalized. In 2024, the annual on-chain transaction volume will exceed 16 trillion US dollars and is still growing rapidly. China's cross-border e-commerce is an important beneficiary of the cross-border payment dividend of stablecoins. The proportion of overseas buyers using stablecoin payments continues to rise, and the number of stablecoins received by Chinese merchants has also surged.
Third, DeFi (decentralized finance), an efficient financial investment tool. As of the end of 2024, the total value locked (TVL) in DeFi protocols is approximately US$190 billion. The DeFi lending market is active, for example, the annualized interest rate for on-chain lending of USDT is stable at around 8%. Its revolutionary nature lies in the fact that lending behavior on the blockchain is automatically executed by smart contracts, eliminating the intermediary links of traditional finance. This not only greatly reduces trust costs and operational risks, but also increases the efficiency of capital turnover by more than 10 times compared to traditional lending models, and the efficiency of clearing and settlement has achieved a qualitative leap.
Fourth, asset tokenization (RWA), that is, the recent market craze of 'real world asset tokenization', aims to map traditional financial assets and even physical assets to the blockchain.
I think no matter who it is, no matter what kind of stablecoin system he designs, if he deviates from these perspectives, it is very likely that it will be backward as soon as it comes out, or even impossible to do.
The programmability of stablecoins brings huge complexity
Meng Yan: People who have just joined the stablecoin discussion in the past few months probably have not had time to understand the already very rich on-chain ecosystem, have not had time to understand DeFi, have not had time to understand the so-called 'composability', have not had time to understand the token economy, and have not had time to understand the extremely complex and dangerous security environment on the chain. Therefore, they may still find it difficult to understand how many possibilities will be immediately opened once stablecoins and RWA assets are on the chain, whether positive or negative.
Xiao Feng: To address the problems you mentioned, the key is to start from the technology and pay special attention to understanding the opportunities and challenges brought by the openness and programmability of stablecoins. Because stablecoins and other tokens, including future RWAs, have openness and programmability.
Many people now talk about stablecoins and RWA by putting them on an 'island', as if stablecoins are just more efficient payment tools, and RWA is just a registration system for putting offline assets on the chain, as if as long as it is technically feasible and compliant, they can 'keep the horses running and the dances dancing'. But they may not realize that these assets are programmable. Once these assets and currencies are on the chain, they do not exist there statically, but will immediately be deeply coupled with the entire on-chain ecosystem through programs and get involved in a highly automated dynamic system that is far more complex than traditional finance.
From the perspective of DeFi, once a stablecoin is on the chain, it will almost immediately be used to participate in lending, market making, re-staking, liquidity mining, leverage operations, and even complex derivative designs. If a stablecoin does not have a sufficient risk model, does not establish reasonable boundary conditions with DeFi protocols, and does not have contingency plans for extreme events such as flash loans, it may be manipulated, exploited, or even trigger systemic risks in a short period of time. Similarly, once RWA is used as collateral on the chain, it may also become part of the on-chain financial game. If the basic data is not transparent, the valuation is not clear, the ownership is disputed, and the compliance is problematic, then this 'sick entry' asset will not only fail to create liquidity, but will pollute the entire ecosystem and become a potential source of risk.
From the perspective of token economics, stablecoins and RWA are not neutral. They will generate complex dynamic coupling with functional tokens, governance tokens, incentive tokens, etc. In the past few years, on-chain projects have developed a whole set of operating logic based on token design, including liquidity incentives, user growth, governance incentives, and so on. Many new people joining the discussion do not understand this model at all, nor have they seen the amplifying effect of the market on incentive mechanisms - it can quickly detonate an application, or it can quickly overwhelm a system. If RWA and stablecoins are not well designed, once a crisis of confidence occurs in such a system, the entire value chain will be broken at an extremely fast speed, bringing huge losses to participants.
From the perspective of security environment, the on-chain security environment can be said to be extremely harsh. Yu Xian, the founder of SlowMist, compares the world on the public chain to a dark forest. I think everyone who has been attacked and lost assets has a deep understanding of this, but many people in traditional finance do not have personal feelings about this. Some of them have had experience with alliance chains or private chains in the past few years, but they lack understanding of the complexity of public chain systems. In fact, their stablecoins, RWA assets, and smart contracts will face various attacks once they are on the public chain, such as smart contract attacks, cross-chain bridge vulnerabilities, oracle manipulation, wallet phishing, MEV extraction, and other attack methods. This is not a theoretical possibility, but a reality that happens every day. On-chain security is not as simple as code auditing, it involves the entire operating logic of the protocol, data interaction with external systems, and unexpected feedback from all user behaviors. Once a risk event occurs, there is no customer service, no stop loss, no rollback, and the only guarantee is to design it robustly enough in advance. Every security vulnerability may have to pay an unbearable huge price to discover and compensate.
From a compliance perspective, the programmability of stablecoins and RWA is both a major opportunity and a new challenge. Compliance in traditional financial systems mainly relies on ex-post audits, manual processes, and centralized control, but when assets and transactions are all on-chain, these methods are difficult to adapt to the highly automated, cross-chain collaborative, and globally circulating on-chain ecosystem. Programmable assets may complete complex behaviors such as on-chain lending, re-staking, and leverage operations in a few seconds, and traditional compliance processes simply do not have time to respond. What is even more troublesome is that compliance requirements vary from jurisdiction to jurisdiction, which means that globally circulating stablecoins and RWA must face multiple regulatory conflicts. But challenges also breed change. The so-called 'Programmable Compliance' is to embed compliance requirements into smart contracts through code to achieve rule pre-positioning, real-time verification, and automatic execution. This provides the possibility for designing a new regulatory architecture compatible with the on-chain ecosystem in the future. As long as the regulatory logic is clear and the data is available on-chain, the 'code is regulation' model can be realized, laying the foundation for the safe and efficient compliant circulation of stablecoins and RWA globally. Future regulation is likely to shift from 'visible hands' to 'rules written into code'.
So I want to say that once stablecoins are truly connected to the on-chain ecosystem, things will become very complicated, far from simply talking about a few application scenarios on paper. The aspects we talked about today are actually just a drop in the bucket. In the future, new problems and challenges will continue to emerge around the technology, security, economic incentives, and compliance adaptation of stablecoins. This must be a continuous exploration process that requires the entire industry to learn together, constantly try and err, and evolve together.
Cognitive upgrade must be driven by innovation
Meng Yan: I think that your summary of the cognitive problems of stablecoins and blockchain from a technical perspective has grasped the key. But I also have a concern. The large-scale application of stablecoins is unfolding rapidly, and a large number of new problems and new phenomena that we have not anticipated will definitely emerge in this process, exceeding our current range of cognition. Relying solely on existing theoretical preparations may not be enough.
Xiao Feng: I completely agree. Cognition is never achieved overnight, especially in a new system as complex and rapidly evolving as blockchain. Many problems can only be revealed in a real environment. We cannot exhaust all variables in advance through discussion. We must rely on the practice cycle of 'cognition - innovation - cognitive feedback - re-innovation' to constantly refresh our understanding. This is actually a once-in-a-lifetime opportunity for Chinese entrepreneurs. We have sufficient technical accumulation and global vision. As long as we seize this paradigm shift opportunity of stablecoins, organize ourselves, work together to start businesses, and work together to practice, it is entirely possible to open up our voice and dominance in the global stablecoin economic system. Cognition can only take root and deepen in practice, and truly become the productive force for promoting the evolution of the new financial system.
