Talking about stablecoins with Xiao Feng again: Returning to the essence of technology, avoiding conceptual misunderstandings.

Author: Meng Yan

On July 18, the GENIUS Act was officially signed into law by President Trump, triggering significant global attention on stablecoins. After a decade of calls from some pioneers in the blockchain industry and shifts in mainstream public opinion towards this field, related discussions finally broke out of their echo chambers. In no time, stablecoins became the hottest topic across the internet industry, traditional finance, and macro policy discussions. People began to rethink the impacts and shocks that large-scale applications of digital currencies could bring to the internet, artificial intelligence, finance, and even geopolitical economic situations. However, beneath the heat, a large number of confused perceptions, distorted information, and even misleading views emerged, widely disseminated through social media, leading to some cognitive misunderstandings. The root cause lies in the generalization of these discussions, which did not consider stablecoins as one of the products of blockchain technology innovation, nor did they discuss the nature and applications of stablecoins from a technical logic perspective. Therefore, I once again had a discussion with Dr. Xiao Feng on this issue.

Meng Yan: Dr. Xiao, since our last conversation, the situation has progressed rapidly as expected. Now, the GENIUS Act has been passed, and I've observed that interest in stablecoins within the Chinese community has surged, reaching almost a level of widespread discussion. I have a friend who just returned from Hong Kong, and he told me that everyone in Hong Kong is talking about stablecoins; it’s truly a situation "I've never seen before." You are in Hong Kong, so you must feel this even more.

Xiao Feng: Indeed, this is a situation we haven't seen in many years. It's not just discussion; the actions are very proactive as well. Hundreds of companies and institutions are queuing up to participate in stablecoins, and news related to RWA is being updated daily. We are receiving many cooperation intentions every day now. The significance of the GENIUS Act is not only that it clearly establishes the legality and sovereign attributes of the "US dollar stablecoin" within the US legal system, but it also conveys a clear signal that blockchain and crypto assets are beginning to move from the gray area into the mainstream financial system, marking the official launch of a new revolution in financial infrastructure. Hong Kong, as a global financial center, reflects a sensitivity to this new trend, which is not surprising.

Seeing this situation, I do feel a bit emotional. As a historical experience, being proactive and bold in the face of new technology almost always brings huge rewards. History almost always favors those who are optimistic and proactive about new technology.

Meng Yan: But I also see some concerns - this wave of stablecoin opportunities came very suddenly, and many people were not prepared at all beforehand, and there is a disconnect in understanding. Many people only heard about stablecoins three months ago, and with a superficial understanding, they began to present themselves as experts on social media, amplifying many viewpoints, some of which I fear may be misleading.

Xiao Feng: I have recently seen a large amount of content from self-media, and I feel the same. Of course, I am very pleased with the current atmosphere of discussion. Isn't this situation where the entire society is actively discussing stablecoins exactly what we have been striving for over the years? Looking at it now, the industry is entering a great era. In the coming years, stablecoins, RWA, token economics, the linkage between coins and stocks, and the integration of crypto and AI will be very lively and exciting.

However, during such times, we need to remain calm and reflect on our understanding. Based on past experience, once spring arrives and the temperature rises, various misleading perceptions and ideas tend to proliferate. Some sensational but erroneous viewpoints can easily gain popularity, planting the seeds of risk in the market. Understanding and perception are very important. The significant ups and downs in previous crypto markets, the industry's missteps, and the fluctuations of people's emotions are actually the results of erroneous perceptions.

First, it is important to have a proper estimation of the environment. Many people believe that with the passage of legislation in the United States, the cryptocurrency industry in Hong Kong and even China will soon be fully opened up, and they even start to layout based on this premise. This is definitely unrealistic. There are still many regulatory issues to be resolved, which will take time. The final solution will inevitably be that there are rules to follow; it cannot be hands-off. For example, will stablecoins, when they leave the banking system, lead to easier money laundering? Therefore, any responsible regulator will certainly impose very strict requirements on anti-money laundering for stablecoins.

Additionally, there are significant misunderstandings and even errors in the understanding of stablecoins, RWA, and blockchain. This incident occurred suddenly, and indeed many people are "entering the industry right at the peak"; they have enthusiasm and traffic, but they have deficits in understanding and do not have time to catch up, resulting in rough judgments. We also have the responsibility to point out this situation.

The discussion of stablecoins cannot be separated from their technical attributes.

Meng Yan: I see that most discussions about stablecoins nowadays only talk about the financial narrative of stablecoins, while very few address the technology. Do people really think that the technology behind stablecoins and blockchain has matured to the point of being taken for granted? In my conversations with many traditional finance professionals, I found that most of them have little to no experience with blockchain products, very little familiarity with DeFi, and no experience with losing keys or suffering from hacking attacks. However, when it comes to constructing applications and systems for stablecoins, they express an overwhelming confidence, as if blockchain is a tool they can wield effortlessly and at will. Many enter this dark forest, which they are completely unfamiliar with, with a sort of "regular army" arrogance, filled with the familiar processes, models, and regulatory frameworks from traditional finance, mistakenly believing they can "translate" these onto the blockchain. But they overlook a fact: blockchain is a completely new computing paradigm, and its operational logic, system boundaries, risk structures, and user behaviors are completely different from traditional finance. They seem entirely unaware that blockchain is technically far from mature, facing numerous challenges in user experience, security, compliance support, and more. The blockchain is fraught with crises, from private key management and smart contract vulnerabilities to phishing attacks, cross-chain bridge attacks, Oracle manipulation, as well as regulatory arbitrage and gray capital flows; any one of these aspects could trigger systemic risks. If one does not understand these technical details and does not grasp the real operational logic on-chain, those beautiful business strategies and imagined ecological closed loops are likely to be shattered by a tide of user complaints, compliance accidents, and security incidents once put into practice.

Moreover, blockchain technology itself is still in a phase of rapid evolution. The leading protocols and products today may be disrupted by a new generation of architectures tomorrow. Modular blockchains, zero-knowledge proofs, account abstraction, on-chain governance, re-staking economy, MEV management... these key technological routes and mechanism designs are continuously refreshing our existing understanding. For those of us who have been working in the industry for over a decade, if we do not learn periodically, our knowledge may become outdated, and the solutions we design may fall behind. Without a thorough understanding and tracking of technological advancements, it is impossible to win in such an intense global competition.

Xiao Feng: Your reminder is very important. Recently, I have seen many biased or completely incorrect comments regarding stablecoins and RWA tokenization, which stem from a disconnect with the underlying technological logic. Everyone needs to clarify that blockchain technology, distributed ledgers, and new financial infrastructure came first, followed by various tokens, including stablecoins, and then RWA and DeFi.

I consider myself a typical financial person, a PhD in economics cultivated after China's reform and opening up, and I have been engaged in the financial industry since I started working. Therefore, I can offer a sincere suggestion to my peers in finance: it is essential to emphasize the study of technology; discussions about stablecoins cannot be separated from their technological attributes, otherwise they can easily become castles in the air.

My earliest contact with blockchain was in 2013. What really attracted me was the discovery, after in-depth research, of the extremely subtle yet powerful fit between the innovation in the underlying technical architecture of blockchain and the deep structure of the financial system. In the practice of the past decade, I have come to realize more profoundly that this industry is currently a technology-led industry. You can have financial intuition, but without an understanding of technology, you will quickly hit a wall in practice. Therefore, over the past decade, I have spent a lot of time studying the underlying principles and cutting-edge technologies of blockchain.

I am still learning today. I constantly remind the entrepreneurs around me that you may not need to write code, but you must have technical judgment. Especially in the DeFi space, future competition will not be between licenses or between brands, but between protocols, architectures, and system efficiencies. Whoever can continuously iterate in areas such as account systems, cross-chain capabilities, settlement efficiency, privacy protection, on-chain compliance, and risk control modules will occupy a stronger market position. Conversely, if you do not understand blockchain technology and do not keep up with the pace of technological evolution, your strategy may be a castle in the air. This is not an exaggeration, but a true reflection of today's industry competition. In this context, technology is not just a competitive advantage; it is a lifeline. If you fail to see this underlying logic, you may severely misallocate resources in business practice. Your seemingly beautiful ideas will surely stumble and hit walls in practice.

Meng Yan: Yes, the nature of stablecoins is determined by their technical attributes.

Xiao Feng: In fact, the nature of every currency throughout history has been strongly influenced by its technological attributes. There have been three crucial transformations in the history of currency development. The first is natural attribute currency, which has a history of thousands of years. Whether it is shells, silver, or gold, its value is based on the scarcity and natural endowments of its physical existence. The second is legal attribute currency, which has a history of over a hundred years. Its value is endowed with coercive power by national legislation, relying on state credit backing. The third, which is currently on the rise, is digital currency, represented by Bitcoin and stablecoins, which is technological attribute currency. Its value is guaranteed and backed by a digital technology system including cryptography, blockchain (distributed ledger), digital wallets, and smart contracts.

Therefore, when we study stablecoins, we must never forget their origins and not confuse cause and effect. First, there is the innovation of blockchain technology; second, the innovation of distributed ledger methods; third, the emergence of new financial market infrastructure based on blockchain and distributed ledgers; only then do stablecoins, RWA, and token economics exist. This is not subject to human will. The United States merely observed this trend and acted accordingly. The U.S. legislation has provided legitimacy and compliance endorsement for crypto, and next year will be the year when traditional financial institutions, traditional funds (including pensions), and traditional investors begin to enter the crypto market through legitimate means.

Not understanding blockchain while creating stablecoins is like "wearing new shoes but walking the old path."

Meng Yan: It is precisely because of such a clear major trend that many traditional institutions are very enthusiastic now. However, I have recently participated in many discussions on stablecoin payments and RWA projects, and I feel that many people underestimate the disruptive nature that stablecoins and blockchain bring to financial models. Their designs basically do not consider the characteristics of this new infrastructure called blockchain. I can say bluntly that it is "walking the old path in new shoes." In their minds, stablecoins are just a tool. The people are still the same, the affairs are still the same, the model is still the same, and the process is still the same. The entire system is still doing the same things in the original way, just using stablecoins and blockchain in certain specific links to improve efficiency and reduce costs.

This reminds me of the early days of internet e-commerce. In the late 1990s, when the internet was just emerging, the biggest doubt people had about it was "there's no business model," and e-commerce was one of the few internet business models that people could understand at the time. So many companies wanted to engage in e-commerce. However, their understanding of e-commerce was merely treating the internet as a tool, a new sales channel, an improved version of telephone sales, simply adding a "mall" channel to their portal website and establishing an e-commerce department, thinking that was enough to do e-commerce. They didn't change their business processes, organizational structure, or way of thinking. It wasn't until platforms like Amazon and Taobao rose that people realized the internet is not a tool, and e-commerce is not a tool; they came to understand that the entire consumption behavior, inventory logic, fulfillment system, and traffic distribution had changed. In the following years, traditional retail models were suppressed and gradually overturned by e-commerce, almost without any ability to fight back. I remember in 2013 and 2014, many bosses were lamenting and regretting not understanding e-commerce back then.

Today is no different. Stablecoins initially are certainly just tools, but they are far from being that simple. Once a billion users install digital wallets and start using stablecoins, they will gradually discover that stablecoins are not just for payments; they are connected to a whole set of on-chain financial systems and economic structures. This structure does not require a complex account system; the user entry point is a "wallet", not an "account"; the interaction method is smart contracts, not manual approvals; the connection method is on-chain protocols, not intermediary matchmaking. Under this model, much of the "intermediary power" that traditional institutions hold within their existing systems will become ineffective, and new entry points and hubs will quickly emerge. The stablecoin economy is not just about using new tools to transform old systems, but about using new systems to eliminate old ones, absorb old systems, and ultimately reconstruct the operational logic of the entire financial industry. This is the deep change we should truly pay attention to.

I feel that many people seriously underestimate this point. Many people overestimate the short-term impact of AI, such as some companies that hurriedly laid off employees last year, replacing jobs with AI, and went to the media to make a big fuss about it. As a result, a few months later, they had to call their employees back. However, when it comes to stablecoins, they easily underestimate their disruptive nature. When they see stablecoins, they think in their minds that this process can use stablecoins in this way, and that business can increase support for stablecoins in that way, but they find it hard to recognize that after the deep application of stablecoins, their processes, their businesses, and even their departments and their own roles may become redundant.

Xiao Feng: The situation you mentioned, in my opinion, still stems from a lack of understanding of blockchain, or what we call distributed ledger technology. Because distributed ledger technology fundamentally changes the underlying infrastructure of our financial system. Many people seriously underestimate the impact of this matter; they think that no matter how things change underneath, I will just do what I need to do on top. However, blockchain is not a "painless upgrade" technology; it is a type of technological revolution where pulling one thread affects the whole garment. Everything in the superstructure must be reconsidered, and that is what we call disruption.

To truly understand stablecoins, one must first clarify their development background. Stablecoins are built on the foundation of distributed ledger technology. Distributed ledger technology represents the third iteration of human accounting methods over thousands of years.

The first is the single-entry bookkeeping method. Based on the clay tablets from the Sumer region that have been discovered so far, the single-entry bookkeeping method was used, which only records income and expenses.

Around the year 1300, Italy saw the emergence of double-entry bookkeeping, a method that not only records income and expenses but also tracks assets and liabilities. In the following 700 years, the calculation methods were only optimized, with no new iterative versions appearing.

It was not until the emergence of the Bitcoin blockchain in 2009 that a new method of calculation, namely distributed ledger technology, was introduced. The biggest difference between distributed ledger technology and previous accounting methods is that the latter involved each party maintaining their own records, which were considered private ledgers. For example, a remittance from Beijing to New York involves multiple institutions, requiring alignment of all information from these institutions' private ledgers, which takes time and incurs costs. However, a distributed ledger is a public ledger where institutions and individuals worldwide record transactions on the same ledger, eliminating the need for numerous institutions to align information. As a result, the two parties in a transaction can complete payments directly through a peer-to-peer method, marking the most significant difference between the two calculation methods.

After the emergence of the Bitcoin blockchain, stablecoins began to appear in 2014. During the continuous engineering experiments, maturation, and optimization of distributed ledger technology, two trends have emerged: on one hand, since 2009, people have "created" Bitcoin, Ethereum, and others out of nothing on the blockchain, which are referred to as "digital natives." On the other hand, since 2014, stablecoins represented by USDT have emerged, marking the emergence of another trend, namely "digital twins." The so-called digital twin refers to an asset that already exists in the real world, such as the US dollar, being introduced into the blockchain and tokenized, which means mapping existing assets onto the chain in a digital format.

At the same time, with the approval of Bitcoin ETFs in the US and Hong Kong last year, a new phenomenon has emerged: digital native assets are moving from on-chain to off-chain, meaning that the assets themselves remain on-chain, but their financial expressions, such as ETF shares, have entered the trading system of traditional finance. Bitcoin ETFs are listed on the New York Stock Exchange (NYSE) and the Hong Kong Stock Exchange (HKEX), allowing investors to invest and trade them according to stock trading mechanisms. Bitcoin itself exists on-chain, while Bitcoin ETFs exist off-chain. Therefore, this process involves the conversion between on-chain and off-chain, as well as the interaction between digital twins and digital natives.

In the past decade of practice with distributed ledger technology, if viewed as a social engineering experiment, one can observe the changes and gradually demonstrate the value of these technologies.

Since 2009, the financial market infrastructure has undergone significant changes based on distributed ledger technology, which are a result of the transformation brought about by distributed accounting methods. The financial market infrastructure mainly includes a series of mechanisms such as payment, trading, clearing, and settlement. So what is new about the new mechanisms compared to the old ones? What characteristics do the old mechanisms and the new mechanisms each have?

Currently, the financial infrastructure assets we rely on adopt a model of central registration, central custody, central counterparty trading, and central settlement, requiring at least three institutions to collaborate in order to complete the clearing and settlement of a transaction. However, on a distributed ledger, since all participants record on the same ledger, the transaction model shifts to peer-to-peer trading, allowing any two individuals to complete a transaction directly without the need for intermediaries.

The existing settlement model of financial market infrastructure is net settlement, while the settlement model on distributed ledgers is transaction-by-transaction settlement. In other words, once a transaction is confirmed, the settlement is complete, and the transfer of funds and assets occurs simultaneously. From the perspective of the stock market, the New York Stock Exchange will launch a 5×23 hour trading model by the end of this year, reserving one hour for clearing after trading hours; while NASDAQ will introduce a 5×24 hour trading model in the future. However, NASDAQ will not be able to achieve this goal within this year due to the need to pause trading for a certain period for clearing under the old financial infrastructure. In contrast, virtual currency exchanges in Hong Kong have already achieved 7×24 hour trading without holidays, precisely because their ledger types are different, leading to variations in financial market infrastructure. This is also one of the backgrounds for stablecoins, as they are built on a new financial market infrastructure.

Since the mainnet of Bitcoin blockchain went live in January 2009, this distributed ledger-based system has been running continuously and stably for over sixteen years. Even from the perspective of large engineering practices, it can be regarded as a new generation of financial market infrastructure (Financial Market Infrastructure, FMI) that has undergone countless rigorous "destructive tests" and is fully equipped for production environment conditions.

Many people think that whether you are a new FMI or an old FMI, don't you all have to support efficient, safe, and trustworthy payment, transaction, clearing, settlement rules, systems, architectures, and regulatory frameworks? What impact does this have on my business model?

The impact is significant! The reason why the FMI based on distributed ledgers is called "the next generation" is due to its disruptive reconstruction of three core rules.

First, decentralized trading eliminates the central counterparty (CCP), achieving true peer-to-peer (P 2 P) transactions.

Second, settle in full for each transaction, abandoning netting (Netting), and adopting a gross settlement model for each transaction (Gross).

Third, the delivery versus payment (DvP) no longer relies on netting settlement, but achieves atomic-level synchronous transfer of assets (such as tokens) and funds (such as stablecoins) through smart contracts (Delivery vs Payment), ensuring transaction finality (Finality) is achieved instantly.

This architectural revolution has brought significant advantages, drastically streamlining processes, significantly reducing costs, and achieving geometric improvements in efficiency. Reality has confirmed this efficiency gap: currently, the intraday trading volume of the New York Stock Exchange (NYSE) and Nasdaq (Nasdaq) accounts for less than 50% of the total trading volume of US stocks. Emerging channels such as after-hours trading and dark pool trading continue to erode the share of traditional exchanges. Although both exchanges have announced extended trading hours to meet the challenges, they are constrained by the traditional FMI clearing and settlement systems (such as the current T+2 clearing system in the US). No matter how optimized, the clearing of shares on the NYSE can only achieve close to 5×23 hours (with about 1 hour reserved for the clearing window each day), otherwise the system will fall into chaos. In contrast, cryptocurrency exchanges, relying on a new generation of FMI, have already achieved 7×24 hour round-the-clock trading capabilities, globally without breaks. This vividly illustrates the stark difference between the old and new financial market infrastructures.

But it doesn't stop there. The impact of blockchain on the financial industry is similar to what the internet brought to publishing, media, communications, film, education, and retail. It is not just a simple efficiency tool; it will change the way users access financial services, alter business processes, reconnect the relationships among various roles in the market and industry, and transform the value chain of the financial industry, leading to significant changes in the way we conduct finance. The stablecoin economy is no longer just a "replacement for a link in the old system"; it is building a new system, a new market, and a new industry network. This structural change will cause some institutions to completely lose value while giving rise to a number of new platform-level organizations and innovative financial applications, of which at least four have already emerged:

First, Bitcoin, as a new asset allocation tool, is expanding its application scenarios from household wealth allocation to corporate cash management, and even rising to national strategic reserves.

Secondly, stablecoins, as revolutionary payment settlement tools, have been legalized. The on-chain transaction volume for the entire year of 2024 has surpassed 16 trillion USD and is still growing rapidly. China's cross-border e-commerce is a major beneficiary of the stablecoin cross-border payment dividends, with the proportion of overseas buyers using stablecoins for payment continuously rising, and the number of stablecoins received by Chinese merchants has also surged.

Thirdly, DeFi (Decentralized Finance), an efficient financial investment tool. By the end of 2024, the total value locked in DeFi protocols is expected to reach approximately $190 billion, with (TVL). The DeFi lending market is active, with the on-chain lending annualized interest rate for USDT remaining stable at around 8%. Its revolutionary aspect lies in the fact that lending activities on the blockchain are automatically executed by smart contracts, eliminating the intermediary links of traditional finance. This not only significantly reduces trust costs and operational risks but also increases the efficiency of capital turnover to more than 10 times that of traditional lending models, achieving a qualitative leap in clearing and settlement efficiency.

Fourth, asset tokenization (RWA), which is the recent market favorite "real-world asset tokenization", aims to map traditional financial assets and even physical assets onto the blockchain.

I believe that regardless of who it is, and regardless of what kind of stablecoin system they design, if they detach from these perspectives, it is very likely that what comes out will be outdated, or may not be able to be produced at all.

The programmability of stablecoins brings great complexity.

Meng Yan: Those who have just joined the stablecoin discussion in the past few months may not have had the time to understand the already very rich on-chain ecosystem, nor have they had the time to understand DeFi, the so-called "composability", token economics, or the exceptionally complex and dangerous security environment on-chain. Therefore, they may find it difficult to comprehend how many possibilities will immediately open up, whether positive or negative, once stablecoins and RWA assets are on-chain.

Xiao Feng: Regarding the issues you mentioned, the key is to start from the technology and pay special attention to understanding the opportunities and challenges brought by the openness and programmability of stablecoins. Because stablecoins, like other tokens, including future RWAs, have openness and programmability.

Many people now discuss stablecoins and RWA as if they are on an "island", treating stablecoins as a more efficient payment tool and RWA as a registration system that brings offline assets onto the chain. It seems that as long as it is technically feasible and compliant, everything can continue as usual. However, they may not realize that these assets are programmable. Once these assets and currencies are on the chain, they do not exist statically; instead, they immediately engage through programs with the entire ecosystem on the chain, becoming part of a highly automated dynamic system that is much more complex than traditional finance.

From the perspective of DeFi, once stablecoins are on-chain, they will almost immediately be used for lending, market making, re-staking, liquidity mining, leveraged operations, and even complex derivatives design. If a stablecoin does not have a robust risk model, does not establish reasonable boundary conditions with DeFi protocols, and does not have contingency plans for extreme events like flash loans, it could be manipulated and exploited in a short period, potentially triggering systemic risks. Similarly, once RWA is used as collateral on-chain, it may also become part of on-chain financial games. If the underlying data is opaque, valuations unclear, ownership disputed, or compliance problematic, then such "sick assets" that enter the market cannot create liquidity; instead, they will pollute the entire ecosystem and become a potential source of risk.

From the perspective of token economics, stablecoins and RWAs are not neutral; they create complex dynamic couplings with functional tokens, governance tokens, incentive tokens, and so on. In the past few years, on-chain projects have developed a complete set of operational logic based on token design, including liquidity incentives, user growth, governance incentives, and more. Many newcomers to the discussion do not understand this model at all, nor have they seen the market's amplification effect on incentive mechanisms — it can rapidly ignite an application, but it can also quickly collapse a system. If RWAs and stablecoins are not designed well, once a crisis of trust occurs in such a system, the entire value chain can break apart at an extremely fast speed, causing significant losses to participants.

From the perspective of a secure environment, the security on-chain can be said to be extremely harsh. Yuxian, the founder of Slow Mist, compares the world on public chains to a dark forest. I believe that everyone who has suffered asset losses due to attacks deeply understands this, but many traditional finance professionals do not have firsthand experience. Some of them have had experience with consortium chains or private chains in the past few years, but they lack awareness of the complexity of public chain systems. In fact, their stablecoins, RWA assets, and smart contracts will face various attacks once they are on the public chain, including smart contract attacks, cross-chain bridge vulnerabilities, oracle manipulation, wallet phishing, MEV extraction, and various other attack methods. This is not a theoretical possibility; it is a reality that happens every day. On-chain security is not as simple as code auditing; it involves the entire operational logic of the protocol, data interaction with external systems, and unexpected feedback from all user behaviors. Once a risk event occurs, there is no customer service, no stop-loss, no withdrawal; the only guarantee is that it is designed to be robust enough in advance, as every security vulnerability may come at an unbearable cost to discover and remedy.

From a compliance perspective, the programmability of stablecoins and RWAs presents both significant opportunities and new challenges. Compliance in the traditional financial system primarily relies on post-audit, manual processes, and centralized control. However, when assets and transactions are fully on-chain, these methods struggle to adapt to a highly automated, cross-chain collaborative, and globally circulating on-chain ecosystem. Programmable assets may complete complex actions such as on-chain lending, re-staking, and leverage operations within seconds, leaving traditional compliance processes unable to respond in time. Moreover, different jurisdictions have inconsistent compliance requirements, causing globally circulating stablecoins and RWAs to face multiple regulatory conflicts. Yet, within these challenges lies the potential for transformation. The concept of 'Programmable Compliance' refers to embedding compliance requirements into smart contracts through code, achieving pre-defined rules, real-time verification, and automatic execution. This opens up the possibility of designing a new regulatory framework that is compatible with the on-chain ecosystem. As long as the regulatory logic is clear and data is available on-chain, a 'code as regulation' model can be realized, laying the foundation for the safe and efficient compliant circulation of stablecoins and RWAs globally. Future regulation is likely to shift from 'the visible hand' to 'rules that can be written into code.'

So what I want to say is that once stablecoins truly connect with the on-chain ecosystem, things will become very complex, far from being as simple as mentioning a few application scenarios on paper. The aspects we discussed today are actually just scratching the surface. In the future, there will be continuous new problems and challenges surrounding the technology, security, economic incentives, and compliance adaptation of stablecoins. This will definitely be an ongoing exploration process that requires the entire industry to learn together, constantly iterate, and evolve together.

Cognitive upgrades must be driven by innovation.

Meng Yan: I think you have grasped the key by summarizing the cognitive issues regarding stablecoins and blockchain from a technical perspective. However, I also have a concern. The large-scale application of stablecoins is rapidly unfolding, and in this process, there will certainly be many new problems and phenomena that we did not anticipate, exceeding our current understanding. Relying solely on existing theoretical preparations may not be sufficient.

Xiao Feng: I completely agree. Cognition is never achieved overnight, especially in a complex and rapidly evolving new system like blockchain, where many issues can only become apparent in a real environment. We cannot exhaust all variables through discussion alone; we must rely on the practical cycle of "cognition - innovation - cognitive feedback - re-innovation" to continually refresh our understanding. For Chinese entrepreneurs, this is actually a once-in-a-lifetime opportunity. We have sufficient technological accumulation and a global perspective. As long as we seize this paradigm shift opportunity with stablecoins, organize ourselves, and collaborate in entrepreneurship and practice, it is entirely possible for us to carve out our voice and leadership in the global stablecoin economic system. Cognition can only take root and deepen through practice, truly becoming a driving force for the evolution of the new financial system.