Why is stablecoins the best track for blockchain implementation?

On September 18, 2025, lawyer Liu Honglin, founder of Shanghai Mankun Law Firm, was invited to share the following questions at the Shanghai-Hong Kong Stock Connect Web3 Digital Asset ConferenceGlobal stablecoin regulatory trends and compliance development, This article is a text draft, and some of the content has been deleted.

I met many old friends at the venue today and I was very happy to have such an opportunity to talk to you about the most popular tracks and directions in the Web3 industry.

The first three guests mainly focused on the RWA track and how to solve the problems related to emerging cross-border financing or asset tokenization.However, today I would like to talk to you from the source about Web3, why RWA appears, and why stablecoins and cross-border payments have a very important impact on the entire Web3 construction and compliance exploration.

Actually, before I stood here, I was still worried that some of the contents of today’s topics could not be shared.But I saw that President Wang had just talked about the fact that his friends bought Bitcoin more than ten years ago.So I think we can still share some things with you.

We all know that Bitcoin’s white paper is the starting point for Web3.The Times once reported that “the British Chancellor of the Exchequer is once again on the verge of saving the bank”, which actually reveals the original intention of Bitcoin.As an emerging asset or currency in the digital age, Bitcoin wants to build a complete decentralized system to break the payment system dominated by traditional banks.

However, by 2025,A reality that has to be admitted is that Bitcoin’s original intention has changed.It is no longer the payment tool originally envisioned, but also deviates from the original positioning of the Internet monetary system.Today, Bitcoin has become an alternative investment target in the capital market and even a strategic reserve asset for some countries.For high-net-worth individuals, it is an option to fight against risks in asset allocation; for the capital market itself, it has become the underlying supporting asset for a large number of ETF products.

From decentralized payment tools to alternative investment products, although the core positioning of Bitcoin has changed, but behind itThe value of blockchain technology has never faded.Especially when it is applied to cross-border settlement and transmission, its efficiency and convenience are still difficult to match even today by the traditional financial system.

Stablecoin takes over Bitcoin payment mission

Who took over the payment mission that Bitcoin has not completed?The answer is stablecoins.Currently, the global stablecoin market value is about US$270 billion, of which 60% comes from the company Tether (USDT).Partners in the industry are very clear about its operating logic. In plain words, it is a block of currency/deposit, just like “1:1 exchanged digital points”. If you deposit 1 yuan (whether it is RMB or US dollars) into a listed company, the listed company will issue you a corresponding denomination point. This point can be used and redeemed on the chain. One day you don’t want to use it.The underlying logic relies on blockchain efficient storage and asset transfer technology, but it is essentially different from Bitcoin: Bitcoin is completely decentralized, and if you hold a private key, you really own this asset; but stablecoins are different. They are essentially commercial services. Even if you have a private key, the corresponding assets may not be entirely yours. Issuer, such as Tether, has the ability to freeze your assets.

Here I will share with you a real case that happened yesterday: A netizen asked me for help. His on-chain wallet had received 100,000 USDT of dust-related funds, but the 1 million USDT in the entire wallet was frozen.This situation is much more troublesome than traditional banks. If it is a bank, you can still contact the account manager to communicate and thaw, but in the face of global law enforcement agencies, the frozen 1 million assets will have to wait at least half a year before substantial advancement may occur.It is precisely because of this kind of financial security risks,middleOnly in Hong Kong will focus on promoting stablecoin compliance, and the national level will also pay close attention to the issuance supervision of stablecoin.

Why can stablecoins become popular?

Some people may ask why stablecoins can develop so fast in more than ten years?Its trading volume even exceeded Visa in 2024.The core reason is just two words: efficiency.Let me give you two personal experience examples: some time ago, I transferred money from a mainland bank card to a bank card under the same name in Hong Kong, and waited for two days before I got the money. Later, I checked Alipay’s cross-border transfer, and the minimum handling fee was 100 yuan. Even if I only transferred 10,000 yuan, I had to pay this 100 yuan.In traditional cross-border payments, “T+1 arrival” and “two dollar handling fees” are the norm.

But what about in the blockchain world?Whether you transfer $0.1 or $100,000, mainstream public chains can basically be paid within one or two minutes, and the cost is extremely low. BSC chains can even achieve zero handling fees, and other mainstream public chains only cost around $0.03.In terms of transaction costs and efficiency alone, stablecoins are at least ten times higher than traditional payments.Therefore, from the perspective of the industry and industry, stablecoins are definitely unavoidable for the most realistic commercial value application of Web3 in 2025.

There is another interesting phenomenon:The penetration rate of stablecoins in emerging countries and regions is faster than that of Europe and the United States.This reminds me of the development of the Internet in China. We skipped the era of desktop PCs and entered the era of mobile Internet directly.Why?Because many people couldn’t afford computers and didn’t want to pull the internet cable back then, they thought it was troublesome to pull the internet cable, but manufacturers such as Xiaomi pushed the price of smartphones to less than 1,000 yuan, which directly lowered the threshold for the mobile Internet and made ordinary people suddenly become Internet users.This is the industrial leap.

The same is true for stablecoins. Modern financial services and facilities such as China and Europe and the United States are too convenient, and there is no urgent need for change; but in areas such as Africa, South America and Southeast Asia, stablecoins have become a very friendly choice.There is no convenient cross-border payment in the local area, and there are even 1.7 billion people around the world who do not have bank accounts. Stablecoins directly solve their financial inclusion problems.Just like when we were traveling to Central Asia and South America, we saw the local small vendors and waiters hanging the sign “Welcome to USDT/USDC”.For them, stablecoins are globally universal and have no depreciation risk. They are both payment tools and choices for asset preservation.The founders of Tether mentioned in an interview last year that they are actually very concerned about such “non-mainstream markets”. Nearly 2 billion people around the world need to rely on companies like Tether to provide payment solutions.So from the perspective of financial inclusion, stablecoins and cryptocurrency payments are very important payment links in a global perspective.

The ultimate user of cryptocurrency may be AI

Of course, in the world of Web3, there are a large number of application scenarios such as DeFi, and this scenario needs to be supported by virtual currencies with programmable characteristics.Recently, we are having in-depth exchanges with many partners in the AI ​​field. Our views coincide with each other. The true core users of cryptocurrencies, or core users who can achieve large-scale applications, are not living natural persons like us, but AI.

Why do you say so?Cryptocurrencies have not been widely popularized in the past decade, and the core pain point is that the user experience is too poor.You should remember your private keys, authorize them, and read a bunch of smart contracts you can’t understand. It is too unfriendly to ordinary people.But AI is different, it can accurately adapt to the programmability and complexity of cryptocurrencies.We often joke that “hold AI on the left and Web3 on the right”. The core of the next generation of Internet (Web3.0) is actually the combination of AI and blockchain technology.This coincides with the sharing of the guests just now.

Stablecoins have been greatly undervalued

Domestic investment institutions and practitioners feel the popularity of stablecoins, which probably started in June this year.At the end of May, Hong Kong passed relevant regulations on stablecoin, and Circle went public in early June. In less than a month, Circle’s stock price increased tenfold.It was only then that everyone discovered that as early as 2015, institutions such as Baidu, Everbright and Shanghai Vientiane had already invested in Circle stablecoin-related investments. It turned out that the value of this track was greatly underestimated.So in June and July this year, I went to many securities companies, banks and asset management companies to talk to them about the business logic and industrial chain opportunities of global stablecoins. Everyone is paying attention to the investment window in this track. After all, the advantages of stablecoins are too obvious in the field of cross-border payments.

From the perspective of business value, the profit model of stablecoins is already very clear and the profit margin is considerable.For example, stablecoin issuers like Tehter made a profit of US$13.7 billion last year, but less than 200 employees; on the other hand, the traditional payment giant Visa has more than 30,000 employees worldwide, with a profit of US$19.7 billion last year.Based on this trend, we estimate that the overall profit of stablecoins in 2025 is likely to surpass Visa.Because of this, traditional financial institutions like Visa are now actively deploying cryptocurrencies and will even officially participate in Web3-related conferences.

Stablecoin development has twists and turns

Of course, the development of stablecoins is not smooth sailing.In the past decade, we have seen currency-collateralized stablecoins (such as issuing with bank deposits or bonds), over-collateralized stablecoins on Ethereum, and also seen algorithmic stablecoins that were once popular but eventually collapsed.It was not until 2024-2025 that the EU, the United States, and Hong Kong, China successively issued compliance plans that could be implemented, and this industry truly went mainstream, compliant, and commercially implemented.

NowGlobal regulators have gradually formed a consensus on the risk prevention and control of stablecoins, for example, require full reserve and independent custody.Such requirements are not aimless. Previously, cases have shown that Tether’s cash reserves only account for 3%, and the rest are long-term investment reserves or other categories of reserves. There is also a confusion of user capital accounts and funds from other exchanges. These are major financial risks that can be seen, so we also understand some of the attitudes and positions of international supervision.From a legal compliance perspective, we usually recommend that customers be cautious about getting involved in algorithmic stablecoins.Under the current regulatory framework, it is difficult for such products to obtain compliance licenses.Another type of interest-generating stablecoins also face compliance difficulties. When users hold interest-generating stablecoins, they can enjoy some of the benefits generated by US bonds or underlying assets.At the end of last year, a former French parliamentarian launched a similar project. Although it received high attention in the early stage, it fell into a death spiral in less than three months. This type of product is also difficult to gain recognition at the compliance level.This is also the reason why both Hong Kong and the United States define stablecoins as payment tools rather than investment products. The core purpose is to prevent and control risks.

Entrepreneurs don’t panic, the industrial chain has a blue ocean

Here I would like to give you a calm reminder: the stablecoin issuance track is already a giant game.After the Hong Kong Stablecoin Ordinance was introduced, many domestic companies said they would apply for issuance qualifications, but Hong Kong regulators also clearly reminded to be calm, indicating that stablecoins have no investment value.But I don’t think stablecoins have no investment value. If crypto players invest in stablecoins, they will defeat at least 80% of investors.Why? At least the principal has not lost money and avoided huge fluctuations.Of course this is our joke, but those who can issue stablecoins now are all business giants such as Standard Chartered Bank, Ant, JD.com, and others.butThis does not mean that ordinary entrepreneurs have no chance. In the stablecoin industry chain, asset custody and application scenario services are all blue oceans..

For example, there are those who specialize in stablecoin crypto payment solutions in the gaming industry, and those who work in cross-border pay payment solutions, those who work in fiat currency and cryptocurrency channels, those who work in cross-border B2B cross-border collection, or those who work in cryptocurrency bank card business around individual customers. Web3 still has a lot of business opportunities to pay attention to:

• In the field of B2B cross-border acquisition, On the basis of traditional bank accounts, a new cryptocurrency collection channel is added, so that merchants can receive cryptocurrencies and directly complete exchanges in the account.This is a typical application of cryptocurrency technology, and users are completely unsensible at the operational level.At present, the top ten cross-border payment institutions in China are actively deploying related businesses in Hong Kong and Singapore.

• Another path is to use PayPal as a typical representative..For PayPal merchants and users, they only need to use local fiat currency to pay, while local service providers will directly exchange fiat currency into local compliant stablecoins within the network.After the stablecoin is transferred to the payee’s account, it is further exchanged into the fiat currency in the payee’s area to complete the capital flow.

• Cryptocurrency bank card for individual customers(that is, the commonly known USDT card), the original design intention is to meet users’ daily consumption needs with USDT, while avoiding the risk of bank card freezing due to virtual currency transactions.Simply put, based on the original personal bank account, the cryptocurrency account function is added, so that users can recharge cryptocurrencies such as USDT to the account. After that, when spending in offline scenarios around the world, even if they only buy a cup of coffee at Starbucks next door, they only need to show Alipay or WeChat QR code to pay, the final deduction is actually the cryptocurrency in the account.This is one of the most popular tracks in the industry this year and is also a key area for many domestic companies and entrepreneurs to pay attention to.

Finally, let’s go back to the topic of RWA.I have always believed that stablecoins are very important for RWA, and jokes will be“RWA without stablecoins are all rogues”.Why do you say so?Because the RWA that is truly valuable in the future must meet two core standards:

First, business data must be “end-to-end”.If the data of an RWA project is not linked, it is difficult for you to prove its authenticity and credibility. Data fidelity is the basis of RWA;

Second, it must be able to perform automatically and allocate automatically through smart contracts..The core value of blockchain is “programmable” and “trust-free”. Only by automatically distributing the project’s operating profits to the equity holder’s account through smart contracts can the trust cost and operational cost be greatly reduced.

There is another pain point in Hong Kong’s RWA model now: overseas financing requires a 8%-10% return, and a service fee of 3-5 million yuan is also required, which directly blocks small and medium-sized enterprises.However, when stablecoins compliance is implemented, data is opened to the end, and smart contracts are automatically distributed, RWA can truly break through the financing limitations and release commercial value, which is also the core supporting role of stablecoins for RWA.