The stablecoin revolution is not a sudden attack, but rather a decade of planning, with regulatory agencies in various countries responding slowly.

Author: Meng Yan's Blockchain Thoughts

After the U.S. Congress passed the GENIUS Act, President Trump signed it into law on July 18, 2025, local time.

The U.S. passes many laws each 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 regarding U.S. 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. Even fewer are willing to clearly point out that China has already fallen seriously behind in this field and is in a very passive position.

In fact, it is not just China; every non-U.S. dollar economy is now facing severe challenges.

Due to the technological penetration of blockchain, the near-total dominance of U.S. dollar stablecoins, and the sudden shift in U.S. stablecoin legislation to a preemptive offensive, 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 proactively or passively, have already opened their doors wide, allowing U.S. dollar stablecoins to penetrate deeply into the daily economic activities of the populace. In Brazil and Argentina, payments using U.S. dollar stablecoins have become deeply integrated into daily life. In Nigeria, reports suggest that as much as one-third of economic activity is conducted using USDT. At this stage, these countries lack the capacity to regulate this portion of economic activity, let alone tax it. This means that this part of their economic activity has effectively detached from national control in terms of management and finance, essentially being incorporated into the broader U.S. dollar economy.

Most countries cannot sit idly by as this digital economic colonization spreads, but what should they do? Should they close their doors and create an alternative system, or simply guard against it and ban stablecoins? Many countries have done just that in recent years, and it has proven that such an 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 their past passive attitudes.

Simple copy-pasting is also unlikely to work. Recently, a large number of financial institutions and companies in several countries have announced ambitious stablecoin issuance plans. However, I must say that the idea that obtaining a stablecoin issuance license, holding a grand launch event, and then riding the stablecoin economic rocket to success, or even securing a place for their national currency in the on-chain economy, is overly naive. Issuing a stablecoin is easy; the problem lies in how to distribute it, overflow beyond one's own ecosystem, and persuade millions or even billions of users to abandon their U.S. dollar stablecoins in favor of 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? Competing with the U.S. dollar in traditional finance is already extremely difficult; competing with the U.S. dollar in the stablecoin space is at least ten times harder. To achieve even a little progress, one must invest unimaginable costs and long-term efforts while maintaining an extremely clear judgment.

What to do?

Before discussing countermeasures, we should probably first ask a question: How did things come to this point?

Blockchain is not a suddenly emerging new technology, and U.S. dollar stablecoins did not achieve $260 billion and 99% market share overnight. The stablecoin revolution is not a surprise attack, nor is it a stealthy maneuver; it is a grand advance that has been announced in advance. Over the past decade, countless experts in the blockchain field have repeatedly warned that blockchain and digital currency technologies have a dimensionality-reducing advantage over traditional financial systems and are strategic technologies that require early planning, layout, and seizing the initiative. If not actively addressed, the future will be very passive. However, regulatory authorities and industries in so many countries have turned a blind eye to this, dragging the situation into the current passive state. In contrast, why is there such heightened sensitivity and strong urgency to catch up with the progress of AI technology, which is equally disruptive and poses significant risks? Why can mainstream public opinion display such overwhelming enthusiasm and such optimistic naivety? If we could apply half of the proactive attitude towards blockchain and stablecoins that we have towards AI, then today we would not see a situation in the stablecoin field where the U.S. dollar dominates, and other currencies are negligible. If today there were two or three non-U.S. dollar stablecoins that could stand up to the dollar, then the competition around stablecoins in the coming years would certainly have more variables and excitement.

Unfortunately! What a pity!

Where did the problem lie?

Was it a lack of timely attention? No. Since 2014, research and discussions around blockchain and digital assets in China have gone through multiple ups and downs. Whether it is the forward-looking exploration in academia, the technical experiments in the industry, or even the periodic research by regulatory agencies, 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 at the knowledge level, we were not unprepared; in fact, some viewpoints were even leading on an international scale.

Was it that the reasoning was not clear? No. When Facebook announced the Libra stablecoin plan in 2019, discussions within the industry regarding blockchain and stablecoins were already very in-depth. If someone were to look back at some leading research institutions' reports from that time, such as those compiled by the Digital Asset Research Institute, it should be said that all the issues we can see and think of today were already identified and considered back then. In fact, discussions on many issues at that time were much more comprehensive and profound than those of today's short-video "stablecoin experts" who have only been in the field for three months.

Was it that the expression was unprofessional? No. Many professionals in the financial industry have long spoken out vigorously. For example, Dr. Xiao Feng, a finance PhD, has been discussing the technical superiority of blockchain in very professional terms since 2016, repeatedly emphasizing its integrated characteristics of distributed ledger payment, clearing, and settlement. He clearly pointed out that just this one point would bring a hundredfold efficiency and cost advantage, ultimately leading to an upgrade of financial infrastructure, an unstoppable trend. This logic is clear, the argument is professional, and it has been widely disseminated.

Was it the chaos in the crypto space that led to misjudgments? Perhaps for the general public, but for true professionals, such an excuse does not hold. As early as 2016, discussions in China's blockchain community 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 for using blockchain for proof, rights confirmation, 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 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, he had already fully understood the disruptive potential of stablecoins and blockchain technology, but due to the Biden administration's rejection of blockchain, he judged that the technology had no future. He 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 that in the future, we must adopt a more proactive attitude towards technological innovation.

Coincidentally, I have recently frequently communicated with traditional financial experts about stablecoin-related topics and showcased the solutions we developed for stablecoin smart payments and digital bills. 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 customers, funds, and business relationships. However, Wall Street is not unaware of this; in fact, 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, regulators will suppress its development based on the need to maintain stability "to keep the financial industry stable." During the Biden administration, the authorities indeed maintained such an understanding with Wall Street. If it were not for someone like Trump, who enjoys overturning tables, taking office, and if the relationship between the Federal Reserve, Wall Street, and the White House had not undergone unexpected changes, it is hard to imagine that the U.S. government would release the tiger of stablecoins at this time.

The situation in other countries is similar. In Australia, we participated in the pilot of the central bank's CBDC at the beginning of 2023 and achieved a winning position. The Reserve Bank of Australia highly praised the technological advantages demonstrated by CBDC and stablecoins in this pilot, but after the evaluation, it decided to continue to hold back and indefinitely postpone 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 doomed from the start to be merely an innovation showcase without any breakthrough impact. In Singapore, after years of a tolerant and supportive attitude towards the blockchain and digital asset industry, some changes occurred after this year's elections. Analysts suggest that the new government is concerned about the potentially disruptive impact of stablecoins and digital assets on the financial industry.

In summary, it is clear that everyone has long known about the technological advantages of blockchain and stablecoins, and even agrees that this is an unstoppable trend. However, due to concerns about the risks they bring and the impact on existing interests and institutional frameworks, a deliberate numbness and sluggishness has been adopted after careful consideration. Or to put it simply, everyone is consciously pretending to be asleep in order to prolong their sweet dreams.

Comparing this to AI makes it even clearer. Seriously speaking, the disruptive potential of AI is at least as great as that of stablecoins and blockchain, with risks that are more comprehensive, deeper, 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, no one pondered deeply; everyone immediately armed themselves and threw themselves into the competition. In the blockchain field, however, a strange tacit understanding has long formed: the first shot that shatters the sweet dream must not be fired by me.

Alright, now Trump has unceremoniously fired this shot, and he is very aware that during the time when everyone was watching, shirking responsibility, and pretending to be asleep, U.S. 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 been set, 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 declaration of war in front of every non-U.S. dollar economy. Externally, it announces the restructuring of the global monetary landscape entering a substantive phase; internally, it redefines the collaborative approach between the U.S. national 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 "piloted while observing"; it will become an urgent priority pressing on the desks of central banks, treasuries, and regulators in the vast majority of countries, 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 delve into solutions, we must first have the courage to face reality and dare to admit: we missed the opportunity, we misjudged the situation, and we covered our eyes with an obsession for short-term stability and luck, turning a blind eye to the ironclad technological logic.

At this starting point of the reconstruction of a new global financial order, perhaps we should first set aside our 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 revolutionary production relationships that this technology represents, to re-embrace the institutional experiments driven by this generation of developers, and to re-plan our position in the global digital value network. Only in this way do we have a chance to win our place in this digital economy competition that concerns the future global landscape.

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