In the midst of strategizing, we decide the outcome from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

Recently, the market has been as we estimated, with the cryptocurrency sector still experiencing fluctuations in June. Whether it’s the Federal Reserve meeting, the Iran-Israel war, or the conflicts involving Trump and Powell related to gossip, although these factors can influence market parameters, their effects are minor and short-lived.

However, among all this fundamental information, what truly caught Lin Chao's attention, and what may have a significant connection to everyone’s future lives, is actually the passage and implementation of stablecoin legislation in various countries, as well as the competition among business giants in this sector.

As Hong Kong's new stablecoin regulatory policy is about to be implemented, companies like JD.com, Ant Group, and Standard Chartered Bank are all making moves to seize the initiative in the stablecoin field and build a stronghold for the future payment system.

Ant Group plans to apply for a stablecoin issuer license in Hong Kong immediately after the policy takes effect, while also advancing compliance layouts in markets like Singapore and Luxembourg. The market has reacted strongly, with related concept stocks in Hong Kong rising in response. Ant International is expected to handle over $1 trillion in global funds in 2024, with more than $300 billion processed through its blockchain platform, Whale. JD.com has also been very active recently, not only in food delivery but also making significant moves in the payment sector. Dong Ge seems eager to make up for lost time over the years; he publicly announced that JD.com aims to apply for stablecoin licenses in major currency countries worldwide, with the goal of completely revolutionizing cross-border corporate payments, cutting costs by 90% and speeding up transactions to under 10 seconds, highlighting Liu Qiangdong's emphasis on this and his strong push for internationalization.

Why does Liu Qiangdong place such importance on stablecoins? Beyond their natural advantages of fast cross-border payment and low costs, a deeper reason may be that Dong Ge missed the payment opportunity years ago. He admitted that not developing a payment business after securing investment was his "biggest mistake," as he thought payment had "little value" at the time. In contrast, the domestic internet payment market now amounts to tens of trillions annually, with Alipay and WeChat Pay capturing over 90% of the market share, while JD Pay only accounts for a small fraction. However, with domestic payment now a settled matter, stablecoin payments are undoubtedly the trend of the future, so JD.com must take the lead to reclaim lost time.

So what does this have to do with us? When big players engage in commercial battles, are we ordinary people just spectators, watching the excitement? Lin Chao believes that the gap between people often lies in deep thinking. Besides watching the big players clash, shouldn’t we consider what this means for ordinary people? Why do these giants see such great value in the payment sector?

This brings us back to the relationship between money and debt. 99% of people actually do not understand what money really is, where it comes from, and whether money is printed by a printing press. Clearly, it is not. Simply put, the emergence of money stems from a trust system. For example, we trust banks, so we deposit money because banks are backed by the state. If the required reserve ratio is 10%, when a depositor puts 1,000 yuan into the bank, the bank keeps only 10% as legal reserves, while the remaining 900 yuan is loaned out to borrowers. Thus, it retains 100 yuan as reserves and loans out 900 yuan to others, generating interest, which becomes profit, leading to the most basic form of making money from money. However, at this point, the depositor's account still shows 1,000 yuan, while the borrower's account shows an additional 900 yuan. The bank's total money supply has increased from 1,000 to 1,900. The borrower takes the 900 yuan, pays interest monthly, and deposits the remaining 500 yuan back into the bank. After receiving this 500 yuan, the bank again keeps 10% as reserves, bringing the total money supply on the bank's books to 2,400 yuan. If this process continues, with the bank keeping 10% of each new deposit as reserves and lending out the remaining 90%, theoretically, the initial 100 yuan in cash could create up to 9,000 yuan in new deposits.

At this point, do you understand why big companies are scrambling for the right to issue coins after the stablecoin legislation was introduced? Simply put, having the right to issue coins also means having the right to issue debt, allowing companies to leverage their trust systems to borrow money from society indefinitely within the rules, as long as there is no bank run. Theoretically, possessing the right to issue coins equates to having a legal money printing machine.

So what does this have to do with the cryptocurrency sector? It’s simple. Regardless of which country issues stablecoins or which network is used, it will require a foundational network and public chain. Just like any country printing fiat currency requires basic paper and ink. If there are more companies and countries issuing stablecoins, then there will definitely be more cash flow entering the cryptocurrency market. Moreover, blockchain payments not only have practical applications in cross-border payments but also perfectly solve the issues of low efficiency and high costs in the market.

Lin Chao's Summary

Currently, the majority of cross-border payments still go through traditional banking systems (CIPS), and the volume is enormous (175 trillion last year). If these payment amounts are to flow into the cryptocurrency market through stablecoins issued by companies in the future, one can imagine how significant this would be for the liquidity of the cryptocurrency market.

Thus, stablecoins are seen by JD.com as a "turning point" tool. The key is that it can cleverly avoid the pain points of existing cross-border payments. As long as they obtain licenses in compliance with regulations globally, they can theoretically circulate worldwide, simply put, it’s a "global money printing machine." At this point, you should understand why JD.com is so determined in the issuance of stablecoins.

Lin Chao believes that the rapid development of public chains in the cryptocurrency sector is also due to the recognition of the inevitable trend of monetary reform following regulatory compliance. In addition to established public chains like BTC and ETH, many highly promising public chain infrastructure projects have emerged in recent years, such as TRON (TRX), Solana (SOL), Sui (SUI), and Sei Network (SEI). This is also why Lin Chao recommends that everyone pay attention to the future trends of these cryptocurrencies. The market capitalization of the cryptocurrency market will undoubtedly rise with the global government's regulatory compliance. We should not only watch the big players clash but also think practically to find opportunities for ordinary people to turn their fortunes around.

Most people miss out on wealth not because they are not smart enough or not hardworking enough. Ultimately, it comes down to a matter of perception. The tides of the times are always rolling, but each person faces different information, and the way they think and interpret it varies, leading to a few individuals seizing opportunities to change their fate while the majority perfectly miss out. The information is the same, but each person's interpretation differs, resulting in minor differences leading to significant outcomes.

We must always maintain sensitivity to information to make appropriate decisions at the right time; riding the wave is the only opportunity for ordinary people. The biggest prison in the world is the human mind. If you cannot earn money beyond your current understanding, then learn to leverage others.

The global market is ever-changing, the world is a whole, follow Lin Chao to gain a top-tier financial perspective.

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