Google officially announced its native blockchain network GCUL, aiming to address the challenges posed by the rise of stablecoins and traditional payment systems, providing financial institutions with efficient and reliable solutions to lead the next wave of fintech. This article is derived from a piece written by Google, organized, translated, and authored by blockbeat. (Background: Google’s self-developed L1 chain 'Google Cloud Universal Ledger (GCUL)' makes its debut: targeting financial applications, supporting Python smart contracts) (Additional background: Apple considers integrating Gemini to create a new version of Siri AI, making Google the biggest winner?) The internet giant Google has officially unveiled its native blockchain network GCUL (Google Cloud Universal Ledger). From the introduction, we can roughly see Google’s thoughts: due to the explosion of stablecoins and the potential trillion-dollar prospects, Google does not want to miss this next generation of fintech wave, so it created GCUL, a network more akin to a stablecoin alliance chain. Rich Widmann, head of Google Web3, stated that this is the result of years of research and development by Google, which can provide financial institutions with a network that is high-performing, trusted, and supports Python smart contracts. Google has also written an article to elaborate on its thoughts about GCUL, as follows: Stablecoins experienced significant growth in 2024, with transaction volumes three times the original volume, organic transaction amounts reaching 5 trillion dollars, and total transaction volumes reaching 30 trillion dollars (data source: Visa, Artemis). In contrast, PayPal's annual transaction volume is approximately 1.6 trillion dollars, and Visa's annual transaction volume is about 13 trillion dollars. The supply of stablecoins pegged to the US dollar has increased to over 1% of the total supply of dollars (M2) (data source: rwa.xyz). This surge clearly indicates that stablecoins have secured a foothold in the market. The demand for better services is driving significant changes in the nearly 3 trillion dollar payment market. Stablecoins eliminate the complexity, inefficiency, and cost burden of traditional payment systems, enabling seamless fund transfers between digital wallets. The capital market has also seen new solutions emerge to facilitate the payment aspect of digital asset transactions, enhancing transparency and efficiency while reducing costs and settlement times. This article explores the evolving financial landscape and proposes a solution to help traditional finance and capital markets not only catch up but also lead the trend. Private currencies: similarities between banknotes and stablecoins Stablecoins share many similarities with privately issued banknotes that were widely used in the 18th and 19th centuries. Banks issued their own banknotes, with varying levels of reliability and regulation. These banknotes made transactions easier, as they were more portable, easier to count, and redeemable without the need to weigh or assess gold purity. To increase trust in this new form of currency, banknotes were backed by reserves and promised to be redeemable for real-world assets (most commonly precious metals). The number and liquidity of transactional wallets increased significantly. Most banknotes were only recognized in local areas near the issuing bank. For off-site settlements, they were exchanged for precious metals or cleared between banks. In exchange for these benefits, users accepted the default risk of a single bank and the value fluctuations based on the issuing bank's perceived solvency. Fractional reserve banking and regulation Subsequently, the economy experienced significant growth, and financial innovation followed. Economic expansion required a more flexible money supply. Banks observed that not all depositors would demand redemption at the same time, leading to the realization that they could profit by lending out a portion of their reserves. The fractional reserve banking system emerged, where the amount of currency in circulation exceeded the reserves held by banks. Mismanagement, high-risk lending practices, fraud, and economic downturns led to bank runs, bankruptcies, crises, and depositor losses. These failures prompted stronger regulation and oversight of currency issuance. With the establishment and expansion of central bank charters, these regulations created a more centralized system, improving banking practices, instituting stricter rules, enhancing stability, and earning public trust in the monetary system. Today's monetary system: commercial banks and central bank money Our current monetary system operates on a dual currency model. The commercial bank money issued by commercial banks is essentially a liability of a specific bank (IOU), subject to comprehensive regulation and oversight. Commercial banks utilize a fractional reserve model, meaning they only keep a portion of deposits as reserves in central bank money, lending the rest. Central bank money represents the liabilities of the central bank and is considered risk-free. Liabilities between banks are settled electronically in central bank money (through RTGS systems like FedWire or Target2). The public can only use commercial bank money for electronic transactions, while the use of cash (physical central bank currency) for transactions is decreasing. Within a single currency, the money of all commercial banks is interchangeable. The focus of competition among banks is on service rather than the quality of the currency they provide. Today's financial infrastructure: fragmented, complex, expensive, and slow With the rise of computers and the internet, monetary transactions are recorded electronically, eliminating the need for cash. Liquidity, access, and product innovation have reached new heights. Solutions vary by country/region, with cross-border transactions still facing economic and technical challenges. Correspondent banking requires idle funds to remain in partner banks, while the complexity of infrastructure forces banks to limit partnerships. Consequently, banks are withdrawing from correspondent relationships (a 25% reduction over the past decade), resulting in longer payment chains, slower payment speeds, and higher payment costs. Convenient solutions that detach these complexities (such as global credit card networks) are costly for businesses regarding payment fees. Moreover, most improvements are concentrated at the front end, with slow advancements in payment processing infrastructure. The fragmented financial system increases trade friction and slows economic growth. (The Economist) estimates that by 2030, the macroeconomic impact of fragmented payment systems on the global economy will reach an astonishing loss of $2.8 trillion (2.6% of global GDP), equivalent to over 130 million jobs (4.3%). Fragmentation and complexity have also harmed financial institutions. In 2022, the annual maintenance cost for outdated payment systems was $37 billion, projected to rise to $57 billion by 2028 (IDC Financial Data Insights). Additionally, the inability to provide instant payments, inefficiencies, security risks, and extremely high compliance costs exacerbate direct revenue losses (75% of banks struggle to implement new payment services in outdated systems, with 47% of new accounts at fintech companies and neo-banks). High payment costs hinder the international business growth of companies and affect profitability and valuation. Companies processing large volumes of payments are highly motivated to reduce their payment processing costs. For example, if Walmart were to reduce its annual payment processing costs of approximately $10 billion (assuming a 1.5% average payment processing rate on $700 billion in revenue) to $2 billion, it could significantly impact earnings per share and stock value...