Original Article Title: "Stablecoin's 10-Year Journey Through Wind and Rain, Finally Becoming the U.S. Officially Designated 'Peer-to-Peer Electronic Cash'"

Original Article Author: Wenser, Odaily Planet Daily

As the price of BTC approaches a new high of $112,000, the U.S. stablecoin regulatory bill, the "Genius Act," is also ready to go, further integrating the crypto industry with the global economic system. It is at this time that people have realized: the payment system is the crown jewel of the crypto industry, with BTC being the gem on the crown. This is also why, in the accelerating process of mainstreaming crypto assets, PayFi, U Card, RWA have become the battlegrounds where trading platforms and crypto projects are clustering. In the future, independent payment solutions based on real-world segmented industries may become possible. In this article, Odaily Planet Daily will briefly review and discuss the past development history and future trends of the stablecoin industry.

Stablecoin's Great Transformation: From USDT's Cryptographic Decade (2014-2024)

In 2008, an article titled "Bitcoin: A Peer-to-Peer Electronic Cash System" appeared on the P2P Foundation website, authored by Satoshi Nakamoto, later revered in the crypto industry as the founding father. At that time, the 2008 subprime mortgage crisis caused by severe U.S. dollar inflation had just ended, and the global economy was slowly rebuilding. There is no doubt that the original intention of BTC's birth was to address the chronic issues of a centralized currency supply system and the lengthy, rigid, and inflexible global financial payment system.

However, to the surprise of many crypto OGs, including Satoshi Nakamoto, what ultimately fulfilled the "P2P payment wish of BTC" was not BTC waving the flag of decentralization but various stablecoins tightly linked to the U.S. dollar and U.S. Treasury bonds.

The Rise of USDT: Surrounding the City with the Countryside, Seizing Market Use Cases

Looking back at Tether's rise to prominence, we can roughly classify it as a "three-step strategy":

(1) From Crypto Blood to Crypto Oil

- In October 2014, Tether was founded, with its core product at the time being the stablecoin USDT issued based on the Bitcoin Omni protocol;

· In February 2015, USDT was launched on Bitfinex, the largest Bitcoin trading platform at the time. Tether's CEO, Paolo Ardoino, is also the CTO of Bitfinex. Due to the high overlap of team members, the two companies have always been seen as "sister companies" by the outside world;

· In 2018, Tether issued USDT based on the ERC-20 standard on Ethereum. USDT under this standard is compatible with the original protocol, further enhancing its ease of use. Since then, leveraging the Ethereum ecosystem, Tether and USDT have gradually begun to penetrate the body of the crypto ecosystem like encrypted blood.

· In 2019, TRON and Tether successfully formed a partnership. Since then, TRON has embarked on a fast track in the stablecoin network's leading ecosystem. TRON has become a heavyweight collaboration network accounting for more than one-third of USDT's circulation. TRON's founder, Justin Sun, also made TRON one of the cryptocurrency infrastructures through an airdrop strategy in the early stages.

It can be said that after the early success of the redemption fee profit model, Tether has established its own competitive barriers and business model through USDT, gradually becoming the equivalent of trading oil raw materials in the crypto ecosystem.

(2) From Cryptocurrency to Beyond Cryptocurrency

As we entered 2020, with the outbreak of DeFi Summer, the market capitalization of stablecoins surged, and seizing the first-mover advantage, naturally, Tether and USDT were the most prominent. Tether's ambition is no longer confined to the crypto world but is gradually expanding to a larger scope.

As we mentioned in the article "The Market Value of the 'First Stablecoin' USDT Hits a New High, Unveiling the Billion-Dollar Business Empire Behind Tether": USDT's use cases include a general equivalent of cryptocurrency, alternative currencies in inflationary regions, the primary payment tool for cross-border trade, and more. In addition, after gaining massive profits, Tether further extended its reach into the entire world economic system through various investments, acquisitions, US Treasury bond reserves, gold reserves, and BTC reserves, strengthening its connection beyond the crypto world. This is also a significant reason why USDT has been criticized as an "accomplice to money laundering." After all, money never sleeps, and neither does USDT.

(3) From Payment Method to Value Storage

In 2021, after reaching a settlement with the New York Attorney General's Office (NYAG) and paying a $41 million fine to the U.S. Commodity Futures Trading Commission, Tether has gradually cleared the biggest obstacle on its development path. Since then, the value of USDT has transitioned from a medium of exchange to a store of value. After experiencing previous controversies such as de-pegging incidents and reserve asset FUD, Tether's issued USDT has become one of the few hoarding targets in the high-risk, high-volatility crypto market — another being BTC. Particularly, with continuous purchases of U.S. bonds, a market position pegged 1:1 to the U.S. dollar, and successful brand recognition, Tether ultimately gained acceptance from the crypto community. Its annual profits of billions or even tens of billions of dollars have provided the confidence to claim the title of "twin dollar."

From a once rapidly growing crypto project to the now prominent stablecoin leader, Tether and USDT have staged a magnificent drama of "rural encircling the city, capturing the market use case."

The Second Path of USDC: Centralized Development, Crypto IPO

Unlike the USDT issued by Tether, Circle, backed by Coinbase, and its stablecoin USDC, have taken a completely different path: building everything for compliance.

In addition to the conventional U.S. bond reserves, Circle's profit model is undoubtedly more fragile compared to Tether. After all, partners like Coinbase and Binance can consume a large portion of its profits. This is also one of the significant reasons why Circle, after Trump took office, vigorously promoted a crypto IPO — only by leveraging the existing compliance advantages, timely expanding its user base from the crypto field to the traditional financial market, can it gain stronger bargaining power and obtain more powerful funding, resources, and even policy support in subsequent market competitions.

In addition to the two major market giants USDT and USDC, from the early market players like TrueUSD (TUSD), Circle Coin (USDC), Gemini Dollar (GUSD), Paxos (PAX), to the still relevant stablecoin projects like DAI (MakerDAO), USDS (Sky), USDe (Ethena), PYUSD (PayPal), RLUSD (Ripple), USD1 (WLFI), and others, the competition for this lucrative "cake" is undoubtedly becoming increasingly fierce. Who can truly stand invincible or emerge as the ultimate winner is still subject to regulatory policy tests and time validation.

https://defillama.com/stablecoins

The US "Genius Act" Triggers Stablecoin Regulation Wave: Filling the Last Puzzle Piece of Crypto Regulation

For all stablecoin projects, the US Senate's recent vote to "pass" the stablecoin regulatory bill known as the "Genius Act" is undoubtedly the looming Damocles sword hanging over their heads. With Bitcoin spot ETFs and Ethereum spot ETFs already becoming part of traditional institutional asset allocation, this act will undoubtedly fill the last piece of the puzzle of crypto regulation left by the Trump administration.

Specifically, in my personal view, the main purposes of the Genius Act are:

1. Ensure US Dollar Hegemony. As a loyal supporter of "America First," Trump and his administration members, as well as Democratic members, still aim to ensure the US's political and economic dominance, with the main medium to achieve this being the US Dollar. Stablecoins pegged to the US Dollar offer a crucial tool in this regard.

2. Ensure that the stablecoin system operates within US jurisdiction. With a crypto-friendly environment now established, the US is reemerging as a crypto hotbed, allowing the US to take the lead in the stablecoin operational system and regulatory policy-making. Just like past trade regulations, the US will use the stablecoin system to exert full control over the global crypto economy and cross-border trade.

3. Ensure some level of security in the crypto financial system. This is also a significant reason why the Genius Act has received positive recognition from many industry professionals and representatives of the traditional financial sector. Mandatory 1:1 full asset reserve, strict prohibition of misappropriation and rehypothecation, monthly reserve reports, external audits, high-frequency information disclosure, bank-level regulatory licenses for a market cap exceeding $100 billion, and the introduction of custodial entities will all add layer upon layer of insurance to the stablecoin race track. Of course, whether the door behind this lock is sturdy is another question.

4. Greatly expand the imagination space for the RWA track, bringing the on-chain and off-chain worlds closer together. It can be said that stablecoins are the earliest RWA products, with their pegged real-world assets being US Dollar currency. With the gradual implementation of the Genius Act, the introduction and implementation of RWA-related regulations are believed to be not far off. Compared to the current over $3 trillion cryptocurrency market, this will be an asset market worth hundreds of trillions of dollars.

Thus, the Genius Act will provide a policy dividend for the U.S. government and U.S. economic development to embrace the digital economy, unlock the potential of digital assets, and encourage the development of crypto projects, giving rise to a group of highly promising crypto projects and their teams. The geniuses carrying the future of crypto may be deeply hidden among them.

The Next 10 Years of Crypto: Finance Remains the Main Theme, Tokenization of Stocks and Crypto Concept Stocks Have Great Potential

Looking ahead to 2025, the percentage of the global population involved in crypto has already reached a stage peak, and cryptocurrency investment is still a game for the minority. However, on the other hand, in the commercial society, everyone has a natural demand for commodity exchange, where commodities can be tangible products, items, or intangible things such as labor, virtual assets, digital IPs, etc. Therefore, based on this demand, more convenient, low-cost, and secure crypto payments will eventually penetrate into everyone's daily life.

In the next decade (2025-2035), the main theme of the cryptocurrency industry may gradually shift from the multiple tracks and areas of market falsification to the financial sector. Consequently, crypto concept stocks generated based on crypto IPOs and stock tokenization will become a new battleground for the crypto industry. In some ways, publicly traded stocks of companies like Strategy, Sol Strategy, Metaplanet, etc., have already become the "dualistic carriers" of crypto concept stocks and stock tokenization. With BTC's value receiving wider recognition and even higher prices, their potential value will also be further unleashed. Of course, visibly, the ETH ecosystem and Solana ecosystem remain the mainstream choices in the industry.

Conclusion: Satoshi Nakamoto's "Legacy" Finally Realized, but in a Contrary Manner

At the end of the article, we still cannot avoid mentioning the crypto giant Satoshi Nakamoto, the founder of Bitcoin, who has disappeared from the market's view. Upholding his vision of the "BTC peer-to-peer payment system," the undeniable culmination is stablecoins. However, slightly ironically, he, with a crypto-punk spirit, may not have foreseen that BTC, born to counter the unrestrained, increasingly expansive coinage power of authoritarian governments, has instead nurtured a more "dollar-centric, U.S. debt-backed" stablecoin system.

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