Who will say sorry to blockchain?

Author: Meng Yan's Thoughts on Blockchain

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

The United States passes many laws each year, but this stablecoin legislation will certainly be regarded as one of the most important milestones in the history of modern currency, comparable to 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 people are willing to explicitly point out that China has already fallen seriously behind in this field and is in a very passive situation.

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-absolute dominance of U.S. dollar stablecoins, and the sudden shift in U.S. stablecoin legislation to a proactive stance, 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 voluntarily or involuntarily, 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 embedded in everyday life. In Nigeria, reports suggest that up to one-third of economic activities are 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 escaped national control at the management and fiscal levels, and has essentially been incorporated into the broader U.S. dollar economy.

Most countries cannot sit idly by and watch this digital economic colonization spread, but what should they do? Should they close their doors and create an alternative system, or simply guard against it and prohibit stablecoins? Many countries have taken such actions in recent years, but it has been proven that this 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.

Simply copying and pasting is also unlikely to work. Recently, a large number of financial institutions and companies in several countries have announced ambitious plans for stablecoin issuance. However, I must say that the idea that one can simply obtain a stablecoin issuance license, hold a grand launch event, and then ride the rocket of the stablecoin economy to success, 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 tens of millions or even hundreds of millions 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 the stablecoin space is at least ten times more difficult than in traditional finance. To make even a little progress, one must invest unimaginable costs and long-term efforts while maintaining 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 a 99% market share overnight. The stablecoin revolution is not a surprise attack, nor is it a stealth operation; it is a large-scale 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 that they are strategic technologies that require early planning, layout, and seizing opportunities. 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 passive state it is in now. In contrast, why is there such heightened sensitivity and strong urgency to catch up with the advancements in AI technology, which also poses disruptive and significant risks? Why can mainstream public opinion display such passionate enthusiasm and such optimistic naivety? If we could apply half the positivity towards blockchain and stablecoins that we do towards AI, then today we would not see a situation where the U.S. dollar dominates the stablecoin space, with other currencies being negligible. If today there were two or three non-U.S. dollar stablecoins that could compete with the dollar, then the competition surrounding 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 was the forward-looking explorations 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 several 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 leading internationally in terms of depth and foresight.

Was it that the reasoning was not clear? Not at all. When Facebook announced its 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, they would find that all the issues we can see and think of today were already identified and discussed back then. In fact, the discussions on many issues at that time were far more comprehensive and profound than those of today's so-called stablecoin experts who have only been in the field for three months.

Was it that the expressions were unprofessional? No. Many professionals in the financial industry have been vocal for a long time. For example, Dr. Xiao Feng, a finance PhD, has been articulating the technological superiority of blockchain 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 about a hundredfold efficiency and cost advantage, ultimately leading to an upgrade of financial infrastructure that is an unstoppable trend. This logic is clear, the argument is professional, and it has been widely disseminated.

Was it due to the chaos in the cryptocurrency space causing misjudgment? 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, there would have been no issue of throwing out the baby with the bathwater.

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 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 temporarily suppress its development based on the need to maintain stability in the financial industry. 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 it were not for the unexpected changes in the relationship between the Federal Reserve, Wall Street, and the White House, 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 top ranking. 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 indefinitely postpone the rollout of 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 believe 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, hoping to prolong the sweet dream a little longer.

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, and everyone immediately armed themselves for 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.

Now, Trump has unceremoniously fired that shot, and he is well 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 "supranational dollar network" onto the historical stage with a piece of legislation, throwing down a blatant challenge to every non-U.S. dollar economy. Externally, it announces that the restructuring of the global monetary landscape has entered a substantive phase; internally, it redefines the collaborative relationship 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 reality challenge pressing on the desks of the central banks, finance ministries, and regulators of most countries in the world.

How to respond to this challenge is likely a question that will take many years to answer. But before we begin to solve the problem, 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 and luck for short-term stability, 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 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 secure our place in this digital economic competition that concerns the future global landscape.