从Circle火爆IPO，看稳定币与美元霸权的现代化金融战【深度】

If you have the opportunity to buy this company at the IPO price on June 5 this year, your holding will increase sevenfold in a week . This company

. This company is the hottest "magic stock" in the US stock market recently, Circle.

However, the market's discussion and attention to it are not only on the soaring stock price, but also on the potential subversion of the global monetary system represented by the business model behind it.

Stablecoins are the focus of today's attention.

Where is the intersection of cryptocurrency and traditional finance?

Hello everyone, welcome to "Silicon Valley 101".

I am Chen Qian.

In this video, we will talk about how the stablecoin market has quickly created wealth myths but has mixed reviews.

What are the stories of the rise of the "good students" and "bad boys"?

On the road to regulatory compliance, how did stablecoins go from controversial to widely recognized , and how will it completely change the current world's financial system? In

Puerto in Buenos Aires, Argentina A coffee shop called CrypStation in the Madero port area has become a microcosm of Argentina's economy.

In the past year, the number of customers who choose to pay with cryptocurrency has increased tenfold , and nearly 60% of them use Tether , also known as USDT.

In Vietnam, a friend also told us that local fruit exporters have also become popular with stablecoins for settlement .

Instead of settling through banks, they prefer to use their own crypto wallets to receive payments.

This is the development and acceptance speed of stablecoins in the past few years.

By the end of 2024, the total market value of global stablecoins has exceeded US$200 billion.

According to data, the transaction volume of stablecoins in 2024 will reach US$15.6 trillion, surpassing Visa and Mastercard for the first time . The discussion of stablecoins

. The discussion of stablecoins has reached a new height after Circle went public. After Circle

went public on the New York Stock Exchange on June 5, 2025, its stock price rose from US$31 to US$40. The issue price soared to $240 on June 20, an increase of nearly 670%.

So what kind of business does Circle do?

In fact, it is so simple that you give me $1 in cash and I give you a digital token called USDC.

When you want cash, I will exchange it back to you at a 1:1 ratio.

Such a simple "exchange" business supports Circle 's market value of nearly 50 billion US dollars.

The USDC it issues is a stable currency.

This USDC and the USDT that everyone likes to use in the Argentine coffee shop we mentioned at the beginning are currently the most popular stable currencies on the market.

The two companies behind it, Circle and Tether , and the difference between the two will be discussed later.

Let's first briefly define the concept of stablecoins.

Stablecoins are a type of encrypted digital assets that are anchored to traditional legal currencies such as the US dollar and the euro .

Its design purpose is to reduce price fluctuations and achieve "digital currency + For example , USDC issued by Circle and USDT accepted by Argentine cafes are both pegged to the US dollar at a ratio of 1:1.

So in theory, 1 stablecoin is equivalent to 1 US dollar.

You may wonder, since stablecoins are as stable as US dollars, why don’t I just use US dollars?

This is the magic of stablecoins.

It has both the "convenience of digital currency" and the "stability of legal currency" , which makes it very popular in the real world.

First of all, cross-border transfers are super convenient.

The Vietnamese fruit merchant we mentioned earlier needs to go through a bank to receive a payment of 1,000 US dollars.

The bank fee may be dozens of dollars and it takes several days to wait.

But with stablecoins, it can be credited to the account in a few minutes , and the fee is only a few dollars.

Secondly, for those whose national currencies are unstable, stablecoins are like a life-saving straw.

For example, the Argentine peso has depreciated by more than 100% a year, but the bank does not allow them to buy it casually. What to do with the US dollar?

You can use stablecoins to buy "digital dollars" on your mobile phone to protect your wealth from shrinking.

Then you may ask again, doesn't digital currency represent Bitcoin?

Some people have used Bitcoin to buy pizza before, so why not use Bitcoin directly?

The problem here is that the price of Bitcoin fluctuates so much , so more people tend to hold it rather than circulate it.

After all , Bitcoin is so valuable that people are reluctant to spend it, so stablecoins came on the scene at this time.

Simply put, stablecoins are US dollars in "digital clothes".

They have all the advantages of digital currencies, fast transfers, low fees, 24 hours a day, but without the roller coaster price fluctuations of other cryptocurrencies . You can think of it as "digitizing" paper dollars and

. You can think of it as "digitizing" paper dollars and turning them into electronic dollars that can be used online at any time.

Another more critical question is why do you say that 1 stablecoin is equal to 1 US dollar?

Who can guarantee this promise ? In fact, stablecoin companies are Like a "digital bank",

? In fact, stablecoin companies are Like a "digital bank", when you want to buy 100 USDT stablecoins, you need to first give the stablecoin company $100 in real money.

After the company receives your money, it will issue you 100 USDT.

The key is that the company must keep your $100 obediently, usually in the form of U.S. Treasury bonds or deposited in a bank.

This is like a digital version of "barter".

You give me real dollars, I give you digital dollars , and I guarantee that you can "exchange them back" at any time.

When you don't want these 100 USDT, you can always go to the company to exchange them for $100 in cash, and the company will destroy the corresponding USDT.

In this way, every stablecoin circulating on the market is theoretically backed by one dollar of real assets.

Of course, there are risks here . If the stablecoin company uses your money to invest recklessly

. If the stablecoin company uses your money to invest recklessly or does not have enough reserve funds, then the stablecoin may "break away from the anchor" and the price will not be $1.

Of course, it is stable. The stablecoins are far more than just pegged to the US dollar.

Now there are also stablecoins pegged to the euro, pound and gold.

Their underlying mechanisms can be divided into three categories.

The first is called centralized reserve , which is backed by the issuing institution with US dollars or high-quality government bonds.

The second is called algorithmic balance , which is to automatically adjust the supply through smart contracts.

The third is called collateral assets , which supports other encrypted assets as reserves.

In summary , in scenarios where traditional finance cannot meet the needs of real-time small-amount global settlement , stablecoins highlight their efficiency advantages.

Cross-border transfers can be completed in a few minutes or even seconds.

The procedures are simple and the cost is low.

Moreover, because they can maintain the peg to legal currencies such as the US dollar, enterprises and individuals do not need to bear the risk of drastic fluctuations like Bitcoin.

This has made stablecoins quickly become the core infrastructure in fields such as cross-border payments and e-commerce.

As of the end of May, the global stablecoin scale was approximately US$252.6 billion.

According to DefiLlma data The USDT we mentioned earlier accounts for about 62.51%, the USDC issued by Circle accounts for about 24.32%, and the remaining stablecoins account for about 13.17%.

So let's take a look at the origins of this mysterious USDT and Circle, which has soared 7 times since its listing , and what other stablecoin players are there on the market.

Let's first talk about the story of Circle.

This company is called "the good student in Web 3".

The founding story of Circle began in 2013 when founder Jeremy Allaire had a simple but ambitious vision to make digital currency as easy as sending an email.

Allaire was not a first-time entrepreneur.

He had successfully founded two companies before, video technology company Allaire With rich experience and wealth from his experience in the company and online video platform Brightcove, he was keenly aware of the potential of digital currency when Bitcoin first emerged.

Initially, Circle positioned itself as the "Bitcoin version of PayPal" and tried to make it easy for ordinary consumers to use Bitcoin for payment.

However, Allaire soon discovered that the fundamental flaw of Bitcoin as a payment tool is that its price fluctuates too much.

No one wants to buy coffee with a "currency" that is worth $100 today but may only be worth $80 tomorrow.

So Circle began an important strategic transformation.

In 2018, Circle launched the USDC stablecoin, which is pegged to the US dollar at a 1:1 ratio.

This decision changed the Everything has changed.

Circle , an idealistic startup chasing Bitcoin payments, has transformed into an issuer of digital dollars.

According to SEC documents, as of May 23, 2025, there will be more than 61 billion USDC in circulation , which is close to Myanmar's national GDP in 2025.

It accounts for 24% of the global stablecoin market.

Circle's money-making model is also very simple.

In fact, it is like a "super bank" based on stablecoins.

Imagine the operation model of a bank.

You deposit money in a bank and the bank gives you a current interest rate, such as 0.5%.

Then the bank lends the money out to earn a higher interest rate, such as 5%.

The price difference in the middle is the bank's profit.

Circle has a similar logic , but it is simpler.

You buy 1 USDC with 1 US dollar.

Circle gets your dollars and then invests them in government bonds with an annualized rate of return of about 4% to 5%.

You can redeem them at any time at a 1:1 ratio.

Circle promises to repay, which means that Circle earns investment income at almost no cost because it doesn't even have to pay you interest.

Under such a simple model, the company has completed an almost impossible task in four years , from $15.4 million in revenue in 2020 to nearly $1.7 billion in 2024 , an astonishing 110-fold increase.

What's even more shocking is that about 99% of total revenue comes from interest income from USDC reserves.

This means that Circle has essentially become a "digital money printing machine", collecting users' dollars and investing them in short-term U.S. Treasury bonds

, and then enjoying the interest rate difference . In terms of risk disclosure,

. In terms of risk disclosure, Circle has e even bluntly stated that for every 1% drop in interest rates, its reserve income will decrease by $441 million.

This extreme sensitivity to interest rates makes Circle a unique "interest rate concept stock", and its fate is highly related to the Federal Reserve's monetary policy.

The Silicon Valley Bank crisis in March 2023 became an important stress test for Circle. At that time, Circle had more than $3.3 billion in deposits in Silicon Valley Bank.

The bank's collapse caused the funds to be frozen.

USDC briefly broke free in the secondary market and fell to 87 cents , but Circle eventually recovered the funds in full.

This crisis proved the company's risk management capabilities and the robustness of reserve management.

Currently, most USDC reserves are composed of U.S. Treasury bonds and overnight repurchase agreements with a term of less than 2 months , and most of the funds are managed by BlackRock's Circle Reserve. Fund custody

and monthly third-party audits.

However, behind these impressive figures, the relationship between Circle and Coinbase is particularly eye-catching.

According to the prospectus, Coinbase not only receives 50% of Circle's reserve revenue , but also holds approximately 20% of the total USDC circulation.

This proportion has risen sharply from 5% in 2022.

In 2024, Circle's distribution costs reached $1.01 billion, which means that Circle is actually "feeding" its largest partner.

This deeply bound relationship is both the key to Circle's success and a potential risk point.

Last year, Circle made $1.6 billion in profits, which is about $1 billion. All of them were paid to Coinbase.

There is actually a very interesting clause in it . The agreement between Circle and Coinbase

. The agreement between Circle and Coinbase disclosed to investors has some specific details that have been deleted and are business secrets.

But there is actually a clause in it that is quite interesting. It says

that if Circle cannot distribute the dividends to Coinbase under certain circumstances or there are some regulatory issues, Coinbase has the right to become the issuer of USDC itself.

So it can actually take USDC and let Coinbase become the issuer itself.

So I think that although USDC is now fully issued and operated by Circle , Coinbase still plays a relatively important role.

The background of this arrangement dates back to 2018, when Circle and Coinbase established a joint venture called "Center" and each held a 50% stake to issue USDC.

However, in August 2023, in preparation for the listing, Circle acquired Coinbase's 50% stake in Center for US$210 million . However, the acquisition did not completely sever the interests of the two parties.

. However, the acquisition did not completely sever the interests of the two parties.

The terms of the agreement show that as long as both parties fulfill their obligations , whether Circle is willing or not, the profit-sharing agreement will be automatically renewed for three years and can be extended indefinitely.

Circle and Coinbase are indeed very closely bound , and I think there is basically no way to get rid of such an agreement.

So Circle cooperated with Coinbase at the time, which actually solved its biggest pain point to a large extent . It can immediately have liquidity,

. It can immediately have liquidity, users can use it, and there can be trading pairs on Coinbase . As the largest exchange in the United States, Coinbase

. As the largest exchange in the United States, Coinbase brings it huge traffic.

Another thing is of course its credibility.

I think Coinbase has a huge and trustworthy brand effect.

This binding relationship is both an advantage and a burden for Circle.

The advantage is that it has obtained the user base and brand endorsement of the largest compliant exchange in the United States . The burden is that it has to pay huge profit-sharing fees every year.

. The burden is that it has to pay huge profit-sharing fees every year.

According to the financial report, of Circle's $1.7 billion in revenue in 2024, approximately $900 million will be paid to Coinbase as promotion fees, accounting for 53% of its revenue.

To sum up, Circle has several attractive features.

The first is stable cash flow.

As long as the stablecoin is in circulation , there will be stable interest income . The second is scale effect.

. The second is scale effect.

The more funds managed, the stronger the bargaining power, the higher the return.

The third is low risk . It

mainly invests in safe assets such as government bonds.

The fourth is high growth.

With the rapid growth of digital payment popularization , Circle particularly emphasizes the "regulatory moat" formed by its compliance advantages.

Compared with its competitor Tether, Circle is subject to stricter supervision and complies with the requirements of the US Stablecoin Act . It also becomes the first to comply with the requirements of the US Stablecoin Act. Circle is a global stablecoin issuer that complies with the requirements of the EU's crypto asset market regulation MiCA . That's why Circle is called a "good student".

MiCA . That's why Circle is called a "good student".

This transparency and compliance are not only important reasons why Circle has won the favor of institutional investors , but also the key foundation for its successful IPO.

However, from the perspective of regulators, stablecoins are not perfect.

If a large amount of funds flow into stablecoins, it may affect the transmission of traditional monetary policy.

Once the issuer has problems, it may trigger a run on the bank . Digital transactions are more difficult to track and regulate.

. Digital transactions are more difficult to track and regulate.

This is why Circle chooses the strategy of "embracing regulation" and uses transparency and compliance to exchange for regulatory recognition.

Now that we have finished talking about the "good student" Circle (USDC), let's talk about the "bad boy".

The legendary story and controversy of Tether If Circle is the most disciplined "good student" in the stablecoin world , then Tether is the "problematic student with the best grades but always breaking the rules."

Let's go back to the coffee shop in Buenos Aires at the beginning.

Why do more than half of the people use USDT instead of Circle's USDC or other stablecoins ? The answer lies in

? The answer lies in the wild growth history of Tether.

The birth story of Tether is one of the most peculiar combinations in the history of cryptocurrency.

On July 8, 2014, three people with very different backgrounds launched a project called "Realcoin" in California, USA. Brock Pierce, a former child star who once starred in the Disney movie "The Wild Ducks", entrepreneur Reeve Collins, and software engineer Craig Sellars , however, the key figure who really pushed this project to the status of a giant was an Italian, Giancarlo Devasini.

Born in Turin in 1964, the former plastic surgeon gave up medicine and turned to the field of technology. In

2012, he invested in an emerging cryptocurrency exchange Bitfinex and soon became the actual person in charge of the company.

In September 2014, Devasini and Phil Potter, chief strategy officer of Bitfinex, co-founded Tether Holdings in the British Virgin Islands. Around

2015, Pierce and Collins sold their shares in the project to Devasini and Potter.

In November of the same year, Realcoin was officially renamed Tether.

This project, co-founded by a former plastic surgeon and a former child star, originally just wanted to create a digital currency pegged to the US dollar at a 1:1 ratio.

But no one expected that this simple idea would develop into a stablecoin empire with a circulation of $120 billion, and the Italian doctor who gave up the scalpel became one of the most mysterious and richest people in the cryptocurrency world . Tether made $13 billion in profits last year, even more than the world's largest asset management company BlackRock.

What's even more astonishing is that all this was done by just over 100 employees.

But unlike Circle, Tether never actively sought regulatory approval , but took a "wild path".

It chose to be registered in the British Virgin Islands and was privately controlled by a group of secret owners.

This "anti-traditional" approach has become Tether's unique advantage. When the US government cuts off its opponents' connection with the US dollar through sanctions, At that time, Tether provided an option of a "digital dollar" that was not directly under the jurisdiction of the United States. In

sanctioned countries such as Iran, Venezuela, and Russia , USDT has become an anonymous dollar for cross-border transfers of funds and has flourished.

But precisely because of this, Tether has been wandering in the gray area and is full of controversy . In 2021, the company was fined $18.5 million by the New York Attorney General

. In 2021, the company was fined $18.5 million by the New York Attorney General for concealing a loss of $850 million . Regulators in many countries have always doubted the compliance use of USDT.

. Regulators in many countries have always doubted the compliance use of USDT.

The United Nations report stated that Tether is the "first choice" for money launderers in Southeast Asia.

These are indisputable facts about the dark side of Tether , but on the other side of the double-edged sword, back to the coffee shop in Buenos Aires, why do people still choose USDT?

The answer is also very realistic.

Non-permission and liquidity.

Tether's global penetration rate far exceeds that of other stablecoins, especially in emerging markets.

When Venezuela experienced severe hyperinflation, when Argentines faced currency controls and could not freely obtain US dollars, USDT was often the easiest "digital dollar" to obtain.

In Venezuela, the sanctioned state-owned oil company PDVSA began to accelerate the use of Tether to pay for oil.

El Dorado , the Latin American stablecoin payment super app, has more than 500,000 users.

In Tbilisi, Georgia, the USDT logo gleams outside a currency exchange shop.

The ATM advertises that users can deposit banknotes in exchange for Tether.

In Russia, Tether has become an important tool for circumventing sanctions.

A person named Ekaterina Zhdanova's wealthy broker once arranged huge ruble-for-USDT transactions for her clients.

Her shared digital wallet transferred more than $350 million of Tether.

Although this "gray area" application is controversial , it also shows Tether 's actual influence in the global financial system.

First of all, I think market liquidity has always followed a rule , that is, the greater the liquidity, the better the liquidity.

Tether's liquidity in the past has always been at the forefront of this liquidity.

When the market pie gets bigger, it will go to the place with the best liquidity.

In addition, Tether has been repeatedly questioned in the past whether it can achieve a one-to-one strict peg to US dollar assets.

Today, it has become very transparent and its huge profits have been generated.

In fact, everyone's confidence in it is currently at its highest.

This is what I think success brings success.

Everyone always looks for the best liquidity.

Numbers don't lie.

Tether's current circulation is about 120 billion US dollars, accounting for more than 60% of the global stablecoin market, which is twice as much as the good student USDC.

It seems that Tether has chosen another path.

It is the choice of those who are excluded by the traditional financial system.

This positioning makes it almost irreplaceable in certain specific scenarios.

However, the real reason for the rise of USDT is far more complicated . The rise of USDT is closely related to the "deposit and withdrawal" demand in the cryptocurrency world.

In addition to the surging demand to bypass regulatory restrictions, in some dark web markets, USDT has gradually replaced Bitcoin as an important payment tool for drug transactions.

Even large criminal organizations use it for large-scale drug trafficking.

In online casinos and human smuggling cases in the Philippines and Cambodia , it is a convenient channel for money laundering.

In Southeast Asia and other regions, kidnappers require the use of USDT as a ransom transaction .

In underground banks around the world, USDT helps cross-border transfer of funds to circumvent foreign exchange controls.

In fact, in terms of the amount of money laundering, US dollar cash is definitely the largest.

This is why everyone has been saying that using this thing as a reason is actually not valid.

It is said that USDT is just the issuer.

In fact, it is difficult for it to control how the final end-user uses it.

Moreover, Tether should be in the United States, such as DOJ (Department of Justice).

Many US law enforcement agencies Tether has processed $18.2 trillion in transactions in 2022 , which is more than Visa and Mastercard.

However, behind these seemingly glamorous figures is a complex ecosystem.

Tether's success comes not only from serving those excluded by traditional finance, but also from its tolerance of various "gray needs". Among

the $18.2 trillion in transactions , how many are legal cross-border remittances , how many are political funds to circumvent sanctions , and how many have flowed to darknet markets?

Tether has never publicly responded to these questions.

For ordinary users, USDT does provide convenience, instant arrival, low fees, and stable value, but this convenience also serves those less glorious purposes.

The same set of technical infrastructure can help small Argentine vendors fight inflation , help drug dealers launder money , enable Venezuelans to obtain "digital dollars" , and allow sanctioned targets to transfer assets.

Therefore, we see that the comparison between Tether and Circle is the whole The stablecoin industry provides profound inspiration.

Circle chose the compliance route and gained recognition from institutional investors and a successful IPO , but therefore lost its competitiveness in some "gray markets".

Tether chose a vague route and walked on the edge of regulation.

As a result, it gained a larger market share but also bore more controversy . This differentiation reflects

. This differentiation reflects a deeper contradiction in the world of digital currency , which is the conflict between the borderlessness of technology and the law.

Like Circle, Tether's business model can be said to be one of the "best businesses in history".

In theory, if its business is simply to issue stablecoins, the main income of this business should come from, for example, if you go to Mint (coinage) , that is, you deposit money to generate stablecoins.

This means that its merchants are the minters in the primary market to mint stablecoins. If you deposit US dollars , you need to pay him a handling fee of 1/1000.

If you want to redeem the US dollar stablecoin such as USDT in your hand for US dollars, you have to pay him a handling fee of 1/1000.

In theory, this is the most basic service for his business.

But obviously Tether does not make money from this. It

holds the real US dollars deposited by users and issues its USDT to everyone.

In fact, it can be roughly regarded as an IOU or casino chips.

It is easier to understand it this way.

At this time, it actually gets this money for free and then invests in government bonds with returns. It

is very safe.

At this time, its income is much higher than the income of simple redemption and legal currency exchange . In the past two years,

. In the past two years, Tether's income and profit are actually the core reason for the explosion . The first is that the issuance of stablecoins has grown very fast.

Another reason is that after getting everyone's free funds, it buys U.S. Treasury bonds with low risk and good returns, and

buys U.S. Treasury bonds with low risk and good returns, and the income is very good.

This is a core reason we see.

The relationship between Tether and the U.S. government

is also extremely delicate.

On the surface, it is an unregulated offshore company , but in fact it has close ties with the U.S. financial system.

The most important connection point is through a company called Cantor that was once managed by U.S. Secretary of Commerce Rutnick. Fitzgerald's Wall Street company.

U.S. Secretary of Commerce Rutnick. Fitzgerald's Wall Street company.

In fact, we all know that Tether is an important purchaser of U.S. Treasury bonds.

In the past few years, there should be tens of billions of dollars in purchases of U.S. Treasury bonds

. How did it buy them ?

At this time, the Wall Street Journal broke the news that Tether purchased U.S. Treasury bonds

through Cantor, a company managed by Lutnick . In other words,

. In other words, Cantor helped Tether buy U.S. Treasury bonds

. It was his brokerage company.

They had some transactions that allowed Cantor to own about 5% of the shares of Tether , so it is also a stakeholder holding Tether shares .

This network of relationships gives Tether a strong political backing.

Now Tether holds about $120 billion in U.S. Treasury bonds,

surpassing Germany and currently ranking as the 19th largest holder in the world . Tether is not satisfied with just doing stablecoin business.

. Tether is not satisfied with just doing stablecoin business.

The huge profits have allowed it to start a crazy investment expansion.

Because they are too rich , they are spending a lot of money.

Their current CEO has been stating in several interviews that they plan to invest at least half of their profits overseas.

For example, they bought a minority stake in Juventus Football Club in Italy . They also invested in energy companies in Uruguay and El Salvador,

. They also invested in energy companies in Uruguay and El Salvador, but the largest investment is a German company Northern. Data

Northern. Data is a very interesting company.

It was originally a Bitcoin mining company and is a German listed company.

Tether has started to increase its stake in the company since 2023 , and then pushed the company to transform into AI and AI-related computing center business.

Then in September 2023, Tether first established its own subsidiary in Ireland.

They took out $420 million and bought 10,000 Nvidia H100 graphics cards through this Irish subsidiary.

Later, they made a transaction and the company became a subsidiary of northern data.

At the same time, it exchanged northern data's stocks .

If you count all the total, Tether actually has 100 million shares in Northern Data.

It cost about 1.2-1.3 billion US dollars, which is the largest investment we can see so far.

In addition to AI computing power, Tether has also entered more cutting-edge fields.

For example, it spent 200 million US dollars to acquire a brain-computer interface company in Salt Lake City, USA called Blackrock Neurotech, which obtained FDA's breakthrough device certification.

The main function is to enable patients with cerebral palsy to resume movement.

The logic behind these investments is simple.

They mainly rely on the interest of US debt to generate income.

However, once the United States enters a cycle of interest rate cuts , Tether's high-yield model will be challenged, so new growth points must be laid out in advance.

We have said so much . In essence

. In essence , both USDT and USDC are centralized stablecoins.

They maintain value stability by holding real US dollar reserves.

In essence, they are the digital version of traditional banking business.

However, we know that in the world of Web 3, there are still many technical geeks pursuing a very ideal decentralized technology utopia.

They want to create a world without banks, companies, and only a set of automatically running programs to manage currencies.

For example, MakerDAO wants to realize a stablecoin system without CEOs and boards of directors that is completely governed by code and the community.

Therefore, they launched Dai . The story of Dai began in 2015

. The story of Dai began in 2015 , when Ethereum was just born and the concept of smart contracts was still fresh.

After the financial crisis in 2008, Danish programmer Rune Christensen realized that "the authorities who are supposed to supervise us are actually the most irresponsible and careless."

This distrust of the governance elite prompted him to found MakerDAO in 2014. The idea

of ​​creating a stablecoin that does not rely on any company's reserves but is completely maintained by decentralized smart contracts seemed almost a fantasy at the time.

Traditional finance tells us that stablecoins need the endorsement of central banks or large financial institutions, but Christensen and his team believe that mathematics and code can be more trustworthy than human institutions, so they designed a complex and elegant system.

Users can pledge cryptocurrencies such as Ethereum and then borrow Dai stablecoins pegged to the US dollar.

This model is called "over-collateralization."

For example, if you want to borrow $100 of Dai, you need to pledge $150 worth of Ethereum.

Doesn't it seem very uneconomical ? But this design has its deep logic.

? But this design has its deep logic.

The over-collateralization system can cope with price fluctuations of cryptocurrencies to ensure that even if the price of the collateral falls, the system can still maintain Dai's dollar peg.

Dai's most severe test came on March 12, 2020, a day known as "Black Thursday" in the cryptocurrency community.

On that day, the price of Ethereum rose by a few hours. The price of Dai plummeted by 50% within an hour, and the entire DeFi ecosystem fell into panic.

Due to the congestion of the Ethereum network, the gas fee soared to dozens of times the usual level. Many users were unable to increase the margin

level. Many users were unable to increase the margin for their collateral positions in time.

This crisis almost destroyed the Dai system . A large number of collateral positions were forcibly liquidated,

. A large number of collateral positions were forcibly liquidated, but due to network congestion, the liquidation mechanism could not operate normally.

What's worse, the price of Dai once soared to more than $1.1, seriously deviating from the anchor price of $1.

However it was this crisis that demonstrated the unique charm of decentralized governance.

The MakerDAO community has no CEO to issue instructions or a board of directors to formulate a rescue plan , but collectively decided on the solution through on-chain voting. The community voted to issue MKR tokens to make up for bad debts,

voting. The community voted to issue MKR tokens to make up for bad debts, which means that all MKR holders jointly bear the loss of the system.

This practice is almost unimaginable in traditional finance , but in the decentralized world, it embodies the true concept of "co-governance".

Different from the simple model of centralized stablecoins, the Dai system can be said to be a complex financial engineering miracle.

It contains multiple sophisticated mechanisms to maintain price stability . When the price of Dai is higher than $1,

. When the price of Dai is higher than $1, the system encourages more people to mint Dai by reducing the stability fee and the Dai savings rate .

Increase supply When the price is below $1, the system incentivizes people to destroy Dai by increasing the stability fee and Dai savings rate Reduce supply.

All of this is done through automated smart contracts and over-collateralization mechanisms without manual intervention.

The system also introduces a "stability fee" mechanism, which is equivalent to the lending rate determined by MKR holders.

When the demand for Dai is too strong, raising the stability fee can suppress the generation of new Dai.

When the demand is insufficient, lowering the stability fee can stimulate lending.

This dynamic adjustment mechanism allows the Dai system to have functions similar to the central bank's monetary policy, but it is completely implemented in a decentralized way.

In the decentralized stablecoin track, you can see that in the past few years, the current Dai should be the largest, with a scale of about 700 to 800 million US dollars , but compared with the scale of more than 200 billion US dollars of the entire stablecoin, this ratio has not completely gone up.

In fact, I think the core point is that centralized stablecoins are not much worse than decentralized stablecoins in terms of non-permission . I am not saying that they are not bad at all.

. I am not saying that they are not bad at all.

For example, Dai itself does not have a blacklist now, which is good, but how many people are really afraid of the blacklist?

Among the number of users, it may be less than 1/1000.

For a centralized stablecoin, its other advantages far exceed those of decentralized stablecoins.

What's more interesting is that the Dai system is constantly evolving.

From the initial acceptance of Ethereum as Collateral , then support for USDC and multiple cryptocurrencies, and then the introduction of real-world assets , so-called RWA, as collateral.

Dai has been expanding its collateral portfolio. In

2022, MakerDAO even began to accept U.S. Treasury bonds

as collateral .

This once purely decentralized system has begun to establish connections with the traditional financial world.

The total supply of Dai is currently about 5.36 billion U.S. dollars.

Although it is far smaller than USDT's 120 billion U.S. dollars

and USDC's more than 60 billion U.S. dollars

, Dai represents a completely different possibility.

In other words, in a financial world dominated by large companies and governments, Dai is an attempt at a decentralized financial system , and it also proves that such a system may be feasible and can survive and grow under extreme pressure.

It is undeniable that the bulk of the market is still centralized stablecoins .

Players like Dai are still too small a market size, but we will continue to pay attention to how it will develop in the future.

In addition to the bad boy USDT, the good student USDC , and the geek Dai , there are several other players in the stablecoin world.

Let 's take a look at the top 8 players based on the circulation on CoinMarketCap, including Ethena USDe USD1 First Digital USD and PayPal USD, etc. As the influence and volume of stablecoins expand, their relationship with politics becomes closer and closer.

We can simply divide the three most prominent stablecoins into three major groups.

The largest group is the Tether Alliance, which includes U.S. Commerce Secretary Lutnick and his son Cantor Fitzgerald , as well as Masayoshi Son's SoftBank.

So I was saying that stablecoins are now divided into several major groups.

The first major group is Tether, which has already taken sides .

Commerce Secretary Lutnick and his son Cantor Tether and his own exchange Bitfinex, and then BitDeer, which holds a 25.5% stake in Tether , and Masayoshi Son, who is participating in CEP, SoftBank has also boarded this ship . This is the largest stablecoin camp.

. This is the largest stablecoin camp.

The second largest group is the Circle Coinbase consortium we mentioned earlier .

The second largest group is undoubtedly Coinbase. Circle consortium

, but so far I have not seen this group have any big political resources or big scene promotion resources, because I think the future may rely on payment, so it needs a big scene resource , so I often joke that the big explosion point of Circle in the future is not that you are discussing cooperation with Meta now, and Meta can't issue stablecoins by itself, so its best choice is to be a promoter like Coinbase

to collect promotion fees . If Meta can invest in your Circle

. If Meta can invest in your Circle as your strategic partner and exclusive partner, it can only promote your USDC , then it will be prosperous.

The third largest group is the Trump family's USD1 stablecoin, which is supported by the Abu Dhabi royal family MGX.

What's interesting is that Abu Dhabi's $2 billion investment in Binance was all paid with USD1, and USD1 was first launched on the Binance chain, so doesn't this show a clear team relationship ?

The third largest group behind it is undoubtedly the USD 1 issued by the Trump family , and the Abu Dhabi royal family MGX. Sheikh

is the Abu Dhabi equivalent of the king's younger brother.

He invested in Binance and CZ , which are also in this camp, because MGX's investment in Binance of $2 billion was all in the stablecoin USD issued by the Trump family . 1 payment

. 1 payment and USD 1 was first launched on Uniswap on Ethereum and Pancake on the BNB chain Binance chain , so I said at the time that it was obvious that it would be listed on Binance.

Later, Binance also listed it.

So now you can see that Binance CZ has clearly stood in the camp of USD 1.

The recent passage of the new bill also further demonstrates the ambition of political forces to convert stablecoins into regular troops.

We mentioned earlier that the surge in Circle is inseparable from the stablecoin bill Genius Act just passed by the US Congress.

On June 17, the US Senate voted to pass the GENIUS Act.

This is the first time that the Senate has passed important legislation to regulate digital assets.

The full name of the bill is "Guiding and Establishing the United States Stablecoin National Innovation Act".

The first letters are Genius, so it is also nicknamed the "Genius Act".

The GENIUS Act can be said to have set guardrails for the stablecoin industry, including full reserve backing, monthly audits, and anti-money laundering regulations requiring "licensed payment stablecoin issuers" to maintain at least a 1:1 ratio of U.S. currency Treasuries

or other reserves to issued stablecoins.

This bill is a major positive for Circle because on the one hand it will enhance consumer confidence and attract institutional adoption, and on the other hand it will raise the entry threshold for the market, which may completely reshape the industry landscape.

For offshore stablecoin issuers like Tether, the Genius Act is like a "tightening curse".

Although Tether has greatly improved its compliance status in recent years , it is still a challenge to fully meet U.S. regulatory requirements.

However, they are now a U.S. dollar stablecoin, and they buy U.S. Treasuries.

Their continued expansion means that the scale of their purchases of U.S. Treasuries continues to expand.

From now on, it is still beneficial to the interests of the United States, so now they are not subject to too many obstacles from the United States and have been invited to attend the White House meeting.

However, under the ocean of global financial order, especially the dollar order, the amount of USDT purchased or its influence is just a drop in the ocean. The world really has the final say.

the ocean. The world really has the final say.

When the potential of the stablecoin market emerged, the technology and financial giants could not sit still.

However, their entry was not smooth.

PayPal has 400 million users. In

theory, it should be easy to succeed in issuing stablecoins , but the performance of its stablecoin PYUSD is mediocre.

The failure of Facebook's Libra project is a lesson for all technology companies.

Facebook , now called Meta, announced in June 2019 that it would create a stablecoin backed by a basket of currencies of multiple countries to provide more convenient cross-border payment services for billions of people without bank accounts around the world.

It promised to make international remittances as easy as sending text messages.

It formed an alliance with 27 partners including PayPal and Visa , known as the Libra Association, with the goal of establishing a global network of instant payments via smartphones to provide services to people who cannot access formal banking services.

However, this seemingly promising project encountered strong opposition from global regulators from the first day of its announcement.

Facing numerous questions from the U.S. Congress,

EU countries and other regulators about monetary sovereignty, financial stability and antitrust, as well as PayPal. The successive withdrawal of core partners such as Visa and MasterCard forced the project to adjust its strategy many times and changed its name to Diem, but it was finally declared a failure in January 2022.

In fact, my personal opinion is that Crypto is the US dollar.

If Zuckerberg had firmly said at the time that Libra was a powerful supplement to the US dollar in the digital age, it might have won.

So you can see many of the policy moves made by the Trump administration today . Why do I say that it is a systematic return

. Why do I say that it is a systematic return to the very old liberal tradition ?

The dream of Libra represented by Jackeberg and even Ethereum represents the global ideal of the globalized intellectual elite or the wealth elite.

It shows a basket of currencies that are globally open source and completely decentralized , but in fact, it returns to the essence of finance. What

Trump has shown today is that you can simply say that it is glorious isolation , but in fact it is a very localized choice. A

very right-wing choice is that you must completely defend the pricing power of the US dollar.

This is the American destiny or American exceptionalism.

Only if you defend the pricing power and special destiny status of the US dollar can all these innovative projects be supported . Once you try to create a new global currency,

. Once you try to create a new global currency, it's like you invented an Esperanto outside of English or Chinese and Latin. This is very difficult and no one will use it.

In comparison, JPMorgan Chase's JPM Coin Now called Kinexys Digital Payments, it has chosen a more conservative route.

JPM Coin is a licensed token that specifically serves interbank payments and large corporate clients.

It is mainly used for cross-border payment instant settlement and programmable payment scenarios . Recently, JPMorgan also announced a new JPMD project,

. Recently, JPMorgan also announced a new JPMD project, which plans to launch deposit tokens on Coinbase's public blockchain Base to provide institutional clients with 24-hour settlement and interest payment functions.

Traditional payment giants are also actively embracing stablecoin technology.

Mastercard took the lead in announcing the launch of global stablecoin acceptance and payment functions in April, allowing users to use stablecoins for payments at more than 150 million merchant locations accepting Mastercard worldwide . Visa is also actively deploying.

. Visa is also actively deploying.

As early as 2020, it established a strategic partnership with Circle and launched a settlement pilot project for the USDC stablecoin on its payment network . In fact, Visa also actively supports the issuance of USDC on Ethereum and Solana in 2023, and it actually launched a Crypto in some regions in 2022. The partnership plan is

to explore with various exchanges and wallets how to connect Crypto to Visa's network under compliance conditions.

He has actually been working on it.

You may not expect that from 2020 to 2021, Circle was actually seeking to sell to Visa . In

my personal opinion, if Circle and its investors did not want to go public independently, because there was a wave of so-called SPAC listings at the time, in fact, for USDC, a stablecoin category, to grow into the world's main stablecoin with a larger or even largest market share, being acquired by Visa was its best choice at the time . In this way, it is possible for it to be most widely used

. In this way, it is possible for it to be most widely used in this huge network of interests and capital pools composed of 22,000 banks.

It is worth noting that in March 2025, the market reported that the blockchain project World Network co-founded by OpenAI CEO Sam Altman was also negotiating with Visa on a stablecoin wallet cooperation project.

They plan to integrate Visa card functions into World The goal of the Wallet is to turn it into a "mini bank account" that provides comprehensive financial services such as foreign exchange transactions, cryptocurrency transactions, wallet top-ups, and card spending.

These not only verify the application potential of stablecoins in the mainstream payment field, but also mark a major shift in traditional financial infrastructure to digital assets.

This is the story of stablecoins.

From coffee shops in Buenos Aires to oil trading in Venezuela, from startups in Georgia to wealth transfers in Russia, stablecoins have woven a huge and complex global network.

This network once wandered on the edge of the law and was full of moral controversy , but it also serves those who have been forgotten by the traditional financial system to a certain extent.

This is the contradiction of stablecoins.

In this contradictory story, the only constant is people's basic need for stable value storage.

In the examples in the video, the reasons why people choose stability are very simple.

In an uncertain world, it provides a relatively certain choice.

From the perspective of financial hegemony, although the real outbreak of stablecoins stems from technological progress and market demand objectively stablecoins do strengthen the hegemony of the US dollar in the digital age.

Every USDT and Because USDC transactions are denominated in US dollars, they objectively strengthen the global status of the US dollar and even siphon global liquidity to enhance the global penetration of the US dollar.

In turn, as the influence of stablecoins gradually strengthens, more and more political forces are also involved.

For example, US regulators are trying to make themselves "talkers" through the Genius Act , which will further "politicize" digital currencies that have no political intentions.

Isn't this a new modern financial war?

As the guests we interviewed said, stablecoins are not only a technological innovation , but also a profound change in the reconstruction of the future financial system and the international competitive landscape.

In this change, both corporate investors and ordinary users need to understand the operating logic and potential risks of these new tools . This story has just begun.

. This story has just begun.

In the era of digital transformation, one thing is certain: it has become a force that cannot be ignored in the global financial system. We will continue to pay attention to it . Okay, so that's

. Okay, so that's all the content of this issue of "Silicon Valley 101" video.

Your likes, attention, comments and reposts are the best motivation to support us in doing in-depth technology and business content.

I'm Chen Qian, so see you in the next video. Bye

.