"CT Chinese · Crypto Circle Open Mic" is a monthly audio interview program created by Cointelegraph's Chinese site, airing on the last Thursday of each month at 7 PM. The show invites core practitioners and observers from various fields such as blockchain, Web3, DeFi, stablecoins, the Ethereum ecosystem, and policy regulation to discuss industry hot topics, market dynamics, and in-depth perspectives in a relaxed and open dialogue atmosphere, presenting a more authentic, diverse, and cutting-edge crypto world to the audience.
This episode's theme is: What does the passage of the Genius Act mean for stablecoins?
Our invited guests include:
- Edison, founder of Cudis, an innovator in the DePIN sector
- Mario Lin, entrepreneurial partner at cryptocurrency fund IOSG Ventures
- Mike, head of the Asia-Pacific region at Camp Network, a Layer 1 blockchain infrastructure company focused on integrating AI with intellectual property
- Hippo, a well-known KOL in the Chinese community
(The audio transcription has been processed by AI; for the complete audio, please visit the X platform to listen.)
Host Eva:
Recently, the U.S. Congress passed the Genius Act, establishing a very clear regulatory framework for stablecoins, which has sparked discussions globally about the legitimacy, transparency, and future application scenarios of stablecoins. Today, we have invited four guests from different fields to delve into the development opportunities for stablecoins, compliance challenges, and their repositioning in the global payment landscape.
Let me introduce our guests today. First, we have Edison, the founder of Cudis, an innovator in the DePIN sector. Edison, please say hello to everyone.
Edison:
Thank you, Cointelegraph Chinese, for the invitation. I'm very happy to be here today to discuss stablecoins. Cudis just completed our TGE last month. We are a project on Solana that helps people track their daily health data while providing our tokens and our partners' tokens as rewards. Payment is also a field we are very focused on, especially since I believe payment is the biggest application scenario for stablecoins. We are also developing some directions for tap-to-pay, so I'm glad to be here to discuss the development of stablecoins with everyone.
Host Eva:
Thank you, Edison. Next, we have Mario, the entrepreneurial partner at IOSG Ventures.
Mario:
Hello everyone, I am Mario, an EIR at IOSG. I have been an entrepreneur in the Web3 industry for some time and often write articles to share my insights. I'm very happy to chat with everyone here today.
Host Eva:
We also have Mike, the head of the Asia-Pacific region at Camp Network, a Layer 1 blockchain infrastructure company focused on integrating AI with intellectual property.
Mike:
Hello everyone, I am Mike, the head of the Asia-Pacific region at Camp Network. Thank you all.
Host Eva:
And we have Hippo, a familiar KOL in the Chinese community.
Hippo:
Hello everyone, I am Hippo. I am very honored to participate in the first episode of Crypto Circle Open Mic. I just heard that this is the first episode, and I feel particularly honored. You can just call me Hippo. I used to work in the community, focusing on the NFT community, but later, as NFTs declined, I gradually transitioned to building my personal account. So now I share some insights in a more relaxed manner, mainly to recharge everyone's faith and share some macro topics or things I personally care about.
Host Eva:
Our first question will start with the core policy change. The passage of the Genius Act is seen by the market as a significant turning point for stablecoin regulation. What impact might this act have on the issuance, custody, and compliance of U.S. dollar stablecoins? I would like to ask Mario to share your understanding of this issue first, and then Edison, please discuss whether you feel a shift in direction regarding the real-world asset implementation.
Other guests can also add their perspectives.
Mario:
I believe the main benefit of the act is that it provides a relatively clear legal regulatory framework for the issuance and circulation of stablecoins. I see three main advantages: First, it gives relevant countries a reference when formulating related policies. Second, it provides companies with a legal standard to follow when conducting business, promoting innovation. Third, it can enhance investor protection and prevent incidents like Luna from happening again.
Edison:
I would like to add a few points. I believe that the U.S. has always been at the forefront of regulatory developments related to crypto. The passage of the Genius Act further solidifies the U.S. dollar's dominant position in on-chain stablecoins, as most core stablecoin assets are still closely tied to the dollar.
Of course, looking at the overall cycle, I entered the space around 2016, and in the early years, it was mainly Eastern capital and miners that dominated the market. In recent years, however, it has shifted more towards the West, and in terms of the market share of stablecoins, dollar-related stablecoins hold an absolute dominant position.
From this perspective, I believe this is a positive development for the industry. If stablecoins can continue to be promoted smoothly, I believe that other countries, besides the U.S., will also take certain actions and refer to the Genius Act in their own legislation, potentially leading to more countries legalizing stablecoins in the future.
I also believe this will greatly drive the development of the entire industry. In the future, I believe the use cases surrounding stablecoins, especially for C-end daily payments, will improve significantly. For example, many VCs that previously used Bitcoin for transactions are now using stablecoins, which will create smoother pathways for exchange and payment compared to the complications of the past few years.
Overall, I think this is a very positive signal for the entire market.
Host Eva:
Earlier, we mentioned the progress of other countries. Indeed, besides the U.S., we see that regulatory steps in the Asian market are also accelerating, especially in Hong Kong, where we have seen a flurry of announcements and preparations for issuing licenses. I would like to ask Mike first: What is your company's current layout in the Asia-Pacific market? Can you share the latest regulatory dynamics you are experiencing on the front lines?
Hippo, could you also help us analyze from the perspective of users and the community? Are people more welcoming of this regulatory framework, or are there concerns that it limits some freedoms of use?
Mike:
Actually, since we are focused on AI and IT, we have many ecosystems and consumer-related applications. We place great importance on payment. When we do supply, we always consider the issues of deposits and withdrawals.
To ensure web2 users can use our services, once stablecoins are issued, their application scenarios will become increasingly broad. Besides developing AA wallets, deposits and withdrawals are also very important. Typically, we need to go to exchanges or exchange with people offline for deposits and withdrawals. However, Camp Network mainly allows direct deposits and withdrawals of fiat currency through our embedded social red envelopes.
Hippo:
I think the passage of the U.S. Genius Act has a significant impact on the crypto space. Although I believe stablecoins are mainly meant to empower the dollar, as the world moves towards de-dollarization, or for example, we are promoting RMB settlement, if the U.S. takes the lead in legalizing crypto stablecoins, it will certainly seize an advantage.
The U.S. already has a head start in the stablecoin space, and this act essentially solidifies and expands its advantages. As the market for U.S. dollar stablecoins grows, it will also help absorb U.S. debt.
Returning to the situation in Asia, for example, the stablecoin policies being promoted in Hong Kong are beneficial in the long run for the community and ordinary players.
However, in the short term, I feel a bit disappointed. For instance, the recent announcement from Hong Kong regarding stablecoins requires stablecoin holders to undergo KYC, and trading stablecoins also requires KYC. This means that, frankly speaking, if I want to transfer money to a friend and later withdraw it, they will need to verify my KYC identity. If I, as a user from the mainland, cannot go there to complete KYC, it complicates the handling of that money. So, in the short term, I see that individual investors and the community are quite resistant to this, as it seems to cater to regulatory demands but lacks the spirit of decentralization. It is merely established on-chain without the essence of decentralization.
However, in the long run, the crypto industry has grown to a point where regulation is necessary because it has surpassed the scale of many countries and has a very large user base. Therefore, if there is no regulation, it is certainly not feasible. Considering Hong Kong's KYC policy, I later thought about why they are doing this. It may be a precursor to potential taxation on cryptocurrencies after legalization.
They are creating a preliminary condition, for example, if you complete KYC, when they launch the Hong Kong dollar stablecoin, you will need to pay taxes. This is just my speculation, but in the long run, I believe it is beneficial. After all, it will allow more money to enter our space more conveniently and legally. Once they enter, it won't just be about investment; they will also want to purchase crypto products like Bitcoin. Overall, this will enhance our liquidity. However, in the short term, the implementation may disappoint some individual investors, including myself, and some practitioners. We may need to lower our expectations in the short term but remain optimistic in the long term.
That’s my perspective.
Host Eva:
From a practical perspective, stablecoins are indeed entering scenarios that traditional finance struggles to address, such as cross-border payments and B2B settlements. In countries where local currencies are not very stable, like Vietnam, I have friends who have noticed that some fruit vendors are already using USDT for transactions while traveling there.
The next question I want to ask Edison is if you could provide an example from your observations of the actual efficiency of stablecoin usage?
Edison:
Actually, since I entered the crypto space relatively early, most of my personal assets are now related to crypto, about 90% to 95%. In the past, when people made money through trading or investing in crypto, it was quite troublesome to move into payments and consumption.
You needed to first convert your crypto into fiat currency before making any payments, whether through bank cards or more convenient payment methods like foreign trade or PayPal, or Alipay and WeChat. Now, with the widespread adoption and use of stablecoins, I think one of the best aspects is that when traveling to various countries, you can almost avoid using cash. As long as local payment methods like Apple Pay or Visa and MasterCard are supported, I can simply use a U card loaded with U to make payments conveniently. Of course, there may be some small transaction fees based on the issuer's charging methods, but overall, it has made things much easier. For instance, when purchasing more expensive items or making larger payments, the cards available on the market, such as debit cards, can generally meet everyone's daily needs without issues. I think this is very important because people can store their money in these cards, and the issuers primarily hope for asset security and smooth payments. In crypto-friendly countries like Dubai and Singapore, I feel that using crypto for payments is very convenient. Even when booking flights and hotels, stablecoins play a significant role, which solves many issues, especially for users from mainland China, minimizing the loss in converting cryptocurrencies to fiat currency in daily consumption scenarios.
At the same time, in international trade, due to significant geopolitical and geo-economic conflicts in recent years, many Eastern European countries, Asian countries, and some North American merchants face substantial challenges in conducting business despite conflicts between their countries. However, with the growing awareness of stablecoins and their compliance and legalization, many small and large merchants and partners can start accepting payments in stablecoins, significantly reducing communication costs and potential fees, as well as issues related to opening bank accounts.
So, I feel that this year, stablecoin development has been rapid, and it has brought tremendous convenience to daily life.
Host Eva:
We see that most stablecoins on the market are pegged to the U.S. dollar, but as we mentioned earlier, Asia is also developing and planning to launch things like Hong Kong dollar stablecoins. I want to ask Mario and Mike how you view this exploration of de-dollarization. Do you think it is a product of policy games, or is it a response to genuine market demand?
Hippo, from the community discussions, do you think people will really use non-U.S. dollar stablecoins, or are they more inclined to stick with what they are used to?
Mario:
Okay, I think this question is driven by demand from a trend perspective. As Web3 continues to develop, the proportion of on-chain assets in ordinary investors' portfolios will increase, leading to a greater demand for diverse asset allocation. This includes expectations for foreign exchange, commodities, stocks, bonds, and other assets.
Mike:
I think in the short term, the stability of the dollar still dominates. The core logic behind the recent legislation is to expand the use of U.S. dollar stablecoins. However, stablecoins may follow the U.S. in expanding their application scenarios, such as the issuance of stablecoin licenses in Hong Kong and Singapore. So, I believe this is a process influenced by the times.
The U.S. is expanding first, and these scenarios will likely form practical operations. Currently, stablecoins in Asia are in a state of strict issuance but wide usage, meaning that licenses are scarce, but the trend is significant. I believe that in the near future, the mainland may also open up the development of stablecoins because the tide of the times cannot be resisted; it can only be followed.
Hippo:
From my perspective, there is definitely a demand for this. Especially for those transitioning from Web2 to Web3, there is a need. When we first entered the space, I’m not sure how you all did it, but among the ten or so friends I started with, we primarily discussed Bitcoin prices, using RMB as the pricing unit. It was only later, as our circle expanded and we became familiar with the space, that we switched to using USD as the pricing unit on exchanges.
So, I think most newcomers will still prefer to use their local or regional stablecoins when entering the space through this opportunity, as it feels safer for them. They don’t have to worry about exchange rates or potential fraud. That’s one point.
Additionally, some successful figures may have a certain demand for regional stablecoins when they exit. For example, they might maintain half of their holdings in U.S. dollars and half in other stablecoins when returning to consumption. However, I believe the volume will still primarily be in U.S. dollar stablecoins because, in our actual interactions, including exchanges with Web3 players from different countries, pricing in dollars is still the most common.
Even if, for instance, Hong Kong exchanges later adopt HKD as the standard, it will ultimately still convert to USD for interactions with other places, creating a dynamic exchange rate. This situation could lead to the dollar being more stable while other stablecoins become less stable, so I don’t think there will be a significant volume for non-U.S. dollar stablecoins.
Host Eva:
I think your point is quite novel; the dollar is more stable, while other coins may be less stable. This is the first time I’ve heard such a statement. As a final thought, let’s summarize a bit. Today we discussed policies, markets, scenarios, and structures. If you could only choose one, I want to ask all four guests what you think is the most pressing and critical issue in the current stablecoin ecosystem?
Mario:
I believe the biggest pain point currently lies in the applicability of local tools. The passage of the Genius Act has cleared a legal hurdle for payment-oriented stablecoins. Therefore, I think a significant proportion of new users entering the stablecoin market will come from traditional electronic payment scenarios. To capture this user base, ease of use is crucial because stablecoins differ significantly from traditional electronic payment methods, such as in terms of transfer processes. So, I think the direction of applicability is relatively easy to identify.
Mike:
I agree with this point; the distribution scenarios are quite limited. Currently, there are mainly three scenarios: one is for trading, the second is for crypto companies to pay salaries, and the third is for payments. While these three application scenarios are substantial, the growth in payment scenarios is relatively slow. Moreover, after the legislation, compliance is only feasible for large companies because small companies require extensive documentation, making it impossible for most small companies to engage with stablecoins. This leads to large companies monopolizing the issuance and application scenarios of stablecoins.
Edison:
I believe that in future developments, I hope to see more countries launch their stablecoins, as this will significantly aid in the mass adoption of crypto.
Currently, I see a large number of Web2 users starting to learn about and inquire about stablecoin-related concepts, even looking for stock-related or crypto-related targets. People are gradually becoming familiar with this concept, and I think stablecoins will be a crucial tool in future developments.
However, I believe that from the implementation of legislation to compliance, and then to the establishment of more application scenarios and the entry of more users and commercial applications, it will certainly take some time. Additionally, those not in the industry may not have sufficient confidence in crypto assets, and if they do not have many demands for international payment scenarios, their need for stablecoins may not be very strong.
But I believe that if more people experience the benefits of stablecoins in various scenarios, such as overseas consumption or cross-border e-commerce, the growth rate will be rapid.
Hippo:
I think the biggest pain point might be that you excitedly launch a stablecoin, and then no one uses it. There’s also the challenge of balancing regulation and decentralization; if you make it too strict, it won’t circulate, and if it’s too loose, it might undermine the stability of your national currency. This is quite difficult. Currently, most regions are following the U.S. trend, and even their expert teams are often inexperienced. So, I think there’s still a long way to go.
Host Eva:
Thank you very much to the four guests for sharing their in-depth perspectives tonight.
From policy and technology to scenarios and users, the previously underestimated middle layer of stablecoins is gradually becoming a strategically significant infrastructure force in the crypto world. Thank you all for tuning in to tonight's Crypto Circle Open Mic, and a special thanks to our four guests for their participation. We hope you will follow Cointelegraph Chinese for future coverage of this space live broadcast. See you next time.
Related: From Skeptic to Supporter: JPMorgan CEO Now "Believes" in Stablecoins and Blockchain
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