The essence is to tear off the stablecoins and tokenization cloak and accelerate the flow of US dollars

Original title: "Beyond Stablecoins"

Author: Sumanth Neppalli

Compiled by: TechFlow

Stablecoins have recently become a hot topic in the cryptocurrency field. Some people think it is the best invention after toast, while others (like me) think it is nothing more than a clever way to output dollars. Faced with the changes brought about by tokenisation, we have been thinking about how the financial market will evolve with it. This article will first review the historical background of stablecoins, and then will conduct in-depth analysis of the possible impact of tokenization on the market.

In July 1944, representatives from 44 allies gathered in a ski town in Bretton Woods, New Hampshire to re-plan the global monetary system. They decided to peg the currencies of each country to the US dollar, while the US dollar was to gold. This system was designed by British economist Keynes, opening a new era of stable exchange rates and smooth trade.

If the summit is compared to a GitHub project, the White House is equivalent to creating a branch, the Treasury Secretary submitted a request for modification, and the Treasury Secretary of each country approved the modifications, "hard-coded" the US dollar into every future trade transaction. In today's digital age, Stablecoin is like the result of this code merger, while other countries are working to adjust their "code base" to prepare for a future that may not rely on the dollar.

Within 72 hours of returning to the Oval Office, President Trump signed an executive order that sounds more like a fantasy novel by cryptocurrency enthusiasts than a traditional fiscal policy: “Promote and protect the sovereignty of the dollar, including through legal, dollar-endorsed stablecoins around the world.”

Immediately afterwards, Congress introduced legislation called the GENIUS Act, namely "Guiding and Establishing National Innovation for US Stablecoins." This is the first bill to set basic rules for stablecoins, and encourages payments using stablecoins around the world.

Currently, the bill is under debate in the Senate and a vote is expected to be held this month. Staff revealed that the latest draft has adopted several recommendations from the Democratic coalition, and the bill is likely to be passed.

So, why does Washington show such a strong interest in stablecoins? Is this just a political show, or is there a deeper strategic layout hidden behind it?

Why foreign demand remains important

Since the 1990s, the United States has outsourced mass production to China, Japan, Germany and Gulf countries and paid for these imported goods in newly printed dollars. Because imports are far more than exports, the United States has faced a huge trade deficit for a long time. The so-called trade deficit refers to the gap between the total amount of goods purchased by a country from the world and the total amount of goods it exports.

Source: Visual Capitalist

Exporting countries face a problem: if the earned USD is converted back to local currency, it will lead to an increase in the exchange rate, thereby weakening the competitiveness of their goods and affecting exports. Therefore, central banks in these countries usually choose to purchase US dollars and invest them in US Treasury bonds. This not only avoids fluctuations in the foreign exchange market, but also obtains interest through treasury bond returns, while also taking credit risks almost as low as holding the US dollar directly.

This model forms a self-reinforcement cycle: exporting goods to the United States, earning US dollar income, and then investing these dollars into US Treasury bonds to earn interest. To maintain this cycle, exporters deliberately lower the local currency exchange rate, thereby promoting more exports.

This "export financing cycle" has helped the United States solve some of its debt problems. Currently, about a quarter of the US $36 trillion in debt is financed in this way. However, if a prolonged trade war breaks this cycle, the cheapest sources of financing in the United States may gradually dry up.

1. Financing deficits: The U.S. government spends more than revenue in the long term, so it needs to operate on a budget deficit. By selling Treasury bonds to foreign countries, the United States was able to share the pressure on the deficit. Short-term T-bills usually expire within one year, while long-term Treasury bonds expire after 20 to 30 years.

2. Maintain low interest rates: High demand for U.S. Treasuries keeps its yields (i.e. interest rates) low. When buyers like China push up Treasury bond prices, yields drop, reducing borrowing costs for governments, businesses and consumers. This low-cost lending supports economic growth and fundes expansionary fiscal policy.

3. The global status of the US dollar: The status of the US dollar as a global reserve currency depends on the trust of the international community in the US economy and assets. Foreign-held U.S. Treasury bonds are a symbol of this trust, ensuring that the dollar continues to be widely used in international trade, oil pricing and foreign exchange reserves. This privilege allows the United States to borrow at a lower cost while maintaining its economic influence globally.

However, if this demand is reduced, the United States will face higher borrowing costs, weaker dollar, and weaker geopolitical influence. In fact, early warning signals have appeared. When leaving office, Warren Buffett said his biggest concern was the upcoming dollar crisis. Today, the United States has lost its AAA credit rating for the first time in all major rating agencies . The AAA rating is regarded as the “gold medal” in the bond market, meaning that such debt is almost risk-free. After the rating downgrade, the U.S. Treasury Department had to provide higher yields to attract buyers, which would undoubtedly increase the country's interest expenses, while the scale of U.S. debt is still expanding.

If traditional Treasury buyers start to exit the market, who will take over the next round of new issuance of trillions of dollars of debt? Washington’s strategy is to open up new channels of capital through a wave of regulated, fully backed by the dollar. The GENIUS Act stipulates that stablecoin issuers must purchase U.S. Treasury bonds. This is why the government takes a tough stance on trade issues on the one hand, but actively promotes the digital dollar on the other hand.

The historical impact of the Eurodollar

Techflow Note: Eurodollar refers to US dollar deposits stored in banking systems outside the United States, especially banks in Europe. These dollar deposits are not regulated by the United States, so their interest rates and operating methods may be different from the domestic banking system in the United States.

Detailed explanation

Financial innovation is not new in the United States. The euro-dollar system with a scale of up to $1.7 trillion has also experienced a process from being completely denied to being gradually accepted. The so-called Euro dollar refers to deposits denominated in US dollars. These deposits are deposited in overseas banks and are mainly distributed in Europe. These deposits are not subject to U.S. bank regulation.

The Euro-USD system was born in the 1950s. At that time, in order to circumvent US jurisdiction during the Cold War, the Soviet Union chose to deposit US dollars into European banks. This system developed rapidly, and by 1970, its market size had grown from the initial few billions to $50 billion, and it had expanded fifty times in just ten years.

The United States initially had doubts about this system. French Finance Minister Valeri Giska Desten once vividly compared it to a "broad monster" , alluding to its complexity and potential risks. However, the 1973 oil crisis temporarily alleviated these concerns. At that time, the Organization of Petroleum Exporting Countries (OPEC) took action to quadruple the value of global oil trade in just a few months. In this change, the world urgently needs a stable currency as a trade settlement tool, and the US dollar has become the first choice.

The euro-dollar system significantly enhances the United States' ability to influence the world through non-military means. With the continuous development of international trade and the Bretton Woods system further consolidated the dominance of the US dollar, this system gradually expanded. Although the Euro dollar is primarily used for payments between foreign entities, these transactions must go through a global network of proxy banks and eventually pass through Bank of America.

This arrangement has given the United States a key position in the global financial system and provided a strong influence on its national security goals. The United States can not only block transactions directly involved in its own country, but also exclude "bad actors" from the entire global dollar system. As a clearing center, the United States is able to track capital flows and impose financial sanctions against the country.

A new era of stablecoins

Stablecoins can be regarded as the modern version of the "Euro Dollar", characterized by an open and transparent blockchain browser. Unlike the traditional model of storing the US dollar in London vaults, the US dollar is now "tokenized" and circulated through blockchain technology. This innovation has brought about a significant scale effect: in 2024, the on-chain stablecoins denominated in USD reached about USD 15 trillion , slightly exceeding the size of Visa's payment network. At present, the total amount of stablecoins in circulation has reached US$245 billion , of which 90% are fully collateralized and denominated in US dollars.

Over time, demand for stablecoins continues to grow. Investors want to convert returns into stable assets to avoid cyclical fluctuations in the market. Unlike the drastic fluctuations in the cryptocurrency market, the continuous expansion of the use of stablecoins shows that its functions are no longer limited to simple trading tools, but are gradually becoming an important financial infrastructure.

The demand for stablecoins can be traced back to 2014. At the time, China's cryptocurrency exchanges needed a way to transfer the US dollar between its order books without relying on banks. They chose Realcoin, a dollar token based on the Bitcoin network and uses the Omni protocol.

Realcoin (later renamed Tether) completed the inbound and outbound operations of funds through Taiwan's banking network. This approach worked well until Wells Fargo terminated its agency banking relationship with these banks due to concerns about the regulatory risks brought about by Tether's rapid growth. Finally in 2021, the U.S. Commodity Futures Trading Commission ( CFTC ) fined Tether $41 million, accusing him of falsely reporting his reserves, claiming that his tokens were not fully asset-backed.

Tether's operating model is very similar to traditional banks: absorb deposits, invest in floating deposits, and earn interest from them. Tether invests about 80% of the token issuance funds in U.S. Treasury bonds. Based on the current 5% yield on short-term Treasury bonds, the $ 120 billion in assets it holds can generate about $6 billion in annual revenue. In this way, Tether achieved a net profit of $13 billion in 2024. During the same period, Goldman Sachs' net income was US$14.28 billion . It is worth noting that Tether has only about 100 employees, while Goldman Sachs has about 46,000 employees. By per capita, Tether generates as much as $130 million per employee, while Goldman Sachs costs $310,000.

In order to win market trust, some competitors choose to build an advantage through transparency. For example, Circle will release USDC audit reports every month, detailing the minting and redemption records of each token. However, the industry as a whole still relies on the issuer’s credit commitments. In March 2023, the collapse of Silicon Valley Bank (SVB) caused Circle's $3.3 billion reserves to be temporarily frozen, and the USDC price fell to 88 cents at one point until the Federal Reserve intervened and made up for the losses of SVB depositors.

The U.S. government is currently planning to develop a clear regulatory framework. The GENIUS Act proposes the following core rules:

• Reserves must be 100% backed by high-quality current assets (HQLAs), such as U.S. Treasury bonds and reverse repurchase agreements.

• Real-time auditing is achieved through licensed oracles.

• Introduced regulatory tools: including issuer freezing functions and compliance with FATF (Financial Action Task Force) rules.

• Compliant stablecoins will gain access to the Fed’s main account and can obtain liquidity support through reverse repurchase channels.

Based on this, a graphic designer living in Berlin no longer needs a US or German bank account, nor does he have to handle cumbersome SWIFT procedures to hold the dollar. He only needs a Gmail account and complete quick identity verification (KYC), provided that Europe has not forced its Euro CBDC (Central Bank Digital Currency). Currently, funds are being transferred from traditional bank books to digital wallet-based applications, and the operating companies of these applications will be more like global banks without branches.

If this regulatory framework becomes law, existing stablecoin issuers will face important choices: either register in the United States and undergo quarterly audits, anti-money laundering inspections and reserve certificates; or watch the US trading platforms turn to compliant stablecoins. Circle has now deposited most of USDC's collateral assets in money market funds regulated by the U.S. Securities and Exchange Commission (SEC), so it has a more competitive advantage in this context.

Tech giants and Wall Street are actively entering the stablecoin space. Just imagine Apple Pay launches “iDollars”: users top up $1,000, not only earn rewards, but also use them in any place that supports contactless payments. The core attractiveness of this model is that the interest income from idle cash balances far exceeds the current card swipe fee, and can also reduce the participation of traditional financial intermediaries. This may also be one of the reasons why Apple decided to end its partnership with Goldman Sachs credit card. When payments are completed through "on-chain dollars" (i.e., the dollar token based on blockchain), the traditional 3% transaction fee will be compressed into a fixed blockchain fee of only a few cents.

Major U.S. banks are also accelerating their layout. For example, Bank of America, Citibank, JP Morgan and Wells Fargo are jointly exploring the possibility of issuing stablecoins. It is worth noting that the GENIUS Act clearly stipulates that stablecoin issuers are not allowed to distribute interest income to users, and this clause may make banking lobby groups feel at ease. This stablecoin can be regarded as a new "super cheap checking account": instant operation, global coverage, and run 24/7.

Faced with this trend, traditional financial giants are also rapidly adjusting their strategies. Mastercard and Visa have launched a dedicated stablecoin settlement network. Paypal has issued its own stablecoin, while Stripe completed its acquisition of Bridge this year, making it the largest cryptocurrency transaction to date. These companies have clearly realized the important position of stablecoins in the future financial system.

Meanwhile, Washington is also paying close attention to this area. Citibank's forecast shows that under the basic scenario, the stablecoin market size will grow six times by 2030 to $1.6 trillion. The U.S. Treasury Department's research data is even more optimistic, and it is expected to reach $2 trillion by 2028. If the GENIUS Act requires stablecoin issuers to invest 80% of their reserves in U.S. Treasury bonds, stablecoins will replace China and Japan and become the largest holders of U.S. debt. This change will not only further consolidate the global status of the US dollar, but may also profoundly affect the global financial landscape.

Application and Advantages of Tokenized Assets

With the popularity of "stabledollars", they have gradually become the core funds that drive the entire Token economy. Once cash is tokenized, people treat it like traditional funds: storage, borrowing, or using it as collateral. However, this is all done at the speed of the internet, not the processing speed of traditional banks. This fast-moving capital will further promote more "real world assets" (RWAs) into the blockchain system and enjoy the following advantages:

• All-weather settlement – ​​The traditional T+2 settlement cycle will be eliminated as blockchain validators can complete transaction confirmation in minutes. For example, a trader in Singapore could buy a tokenized apartment in New York in the evening and complete ownership confirmation before dinner.

• Programmability - Smart contracts can embed complex financial logic directly into assets, such as automated coupon payments, earnings distribution rules, and built-in compliance parameters.

• Composability - Tokenized assets can be flexibly combined. For example, a tokenized Treasury bond can serve as collateral for a loan or assign interest payments to multiple holders. An expensive beach house can be divided into 50 shares, held by multiple investors, and leased to hotel service providers for management through Airbnb.

• Transparency - The transparency of blockchain can help regulators monitor the collateral rates, systemic risks, and market dynamics on the chain in real time, thus avoiding risks similar to those caused by opacity in the derivatives market during the 2008 financial crisis.

As BlackRock CEO Larry Fink said: “Every stock, every bond , every fund—every asset—can be tokenized.”

The main obstacle is the clarity of regulation. Investors know what to encounter in traditional exchanges because the rules of these exchanges were built up in a painful lesson.

Take the 1987 Black Monday stock market crash as an example, when the Dow Jones Index plummeted 22% in one day because automated procedures sold stocks when prices fell, triggering a series of selling behaviors. The Securities and Exchange Commission’s (SEC) solution is to introduce a circuit breaker mechanism, namely, suspend trading, and allow investors to reassess the situation. Now, if the New York Stock Exchange (NYSE) sees a 7% decline, trading will be suspended for 15 minutes.

Tokenizing assets is a relatively simple part, and the issuer guarantees the rights of real-world assets corresponding to the Token. The hard part is ensuring that all rules are followed on and off-chain. This means wallet-level whitelists, national identity flows, cross-border KYC/AML (Know Your Customer/Anti-Money Laundering) requirements, citizen holding caps, and real-time sanctions screening are required.

Europe's Crypto Assets Markets Act (MiCA) provides a complete operating manual for digital assets in Europe, while Singapore's Payment Services Act is a starting point for Asia, but the global regulatory map is still incomplete.

It is almost certain that the promotion process will be carried out in stages.

• Phase 1 : The first to be introduced to the chain will be the most liquid and least risky tools, such as money market funds and short-term corporate bonds. The operating benefits at this stage are immediate, because the settlement cycle can be shortened immediately, and compliance processing is relatively simple.

• Phase 2 : The risk curve will rise, involving higher yield products such as private credit, structured financial products, and long-term bonds. At this stage, the goal is not only to improve efficiency, but also to release liquidity and realize the composability of assets.

• Phase 3 : Will expand to less liquid asset classes such as private equity, hedge funds, infrastructure and real estate-backed debt. To reach this stage, the general acceptance of tokenized assets as collateral is required, as well as a cross-industry technology stack that can serve these assets. Banks and financial institutions need to custody these real-world assets (RWAs) as collateral while providing credit support.

Although the timetables for different asset classes may vary, the direction of development has been clear. Every new batch of stabledollars will push the Token economy forward one stage.

Stable Coin

The US dollar-pegged Token market is currently dominated by two giants, Tether (USDT) and Circle (USDC), which together control 82% of the market share. Both are fiat-collateralized stablecoins: Euro-denominated stablecoins, for example, support every token in circulation by depositing the euro into the bank.

In addition to the fiat currency model, developers are also exploring two decentralized experimental methods to maintain price stability in a way that does not require an off-chain custodian:

1. Cryptocurrency-collateralized stablecoins : These stablecoins are supported by other cryptocurrencies as reserves, and usually use over-collateralization to deal with market volatility. For example, MakerDAO 's DAI is the representative of the field, with a circulation of $6 billion. After the 2022 bear market, MakerDAO has converted more than half of its collateral into tokenized Treasury and short-term bonds to reduce the impact of ETH volatility on the system while obtaining stable returns. Currently, this portion of the assets contributes about 50% of the agreement revenue .

2. Algorithmic stablecoins : This type of stablecoins does not rely on any collateral, but maintains price stability through algorithmically controlled minting and destruction mechanisms. Terra 's UST once reached a market capitalization of US$20 billion, but market confidence collapsed due to price decoupling, which eventually led to a large-scale sell-off. Although emerging projects such as Ethena have achieved growth through improved models with a market cap of $5 billion, this area still takes time to gain wider recognition.

If the U.S. government only allows stablecoins that are fully supported by fiat currencies to use the "qualified stablecoin" label, other types of stablecoins may be forced to abandon the "USD" in their names to comply with the regulations. The future of algorithmic stablecoins is still uncertain, and the GENIUS Act requires the Ministry of Finance to study these agreements within one year before making a final decision.

Money Market

Money markets include highly liquid, short-term assets such as Treasury bonds, cash and repurchase agreements. On-chain funds “tokenize” these assets by packaging ownership of them in the form of ERC-20 or SPL Tokens. These tools enable 24/7 redemption, automatic revenue distribution, seamless payment integration, and convenient mortgage management.

Asset management companies retain traditional compliance processes (such as AML/KYC, eligible investor restrictions), but the settlement time has been reduced from days to minutes.

BlackRock's USD Institutional Digital Liquidity Fund ( BUIDL ) is a market leader in this field. The company has designated Securitize, a SEC-registered transfer agent, token casting and destruction, tax compliance FATCA/CRS reporting and shareholder roster management. Investors need to have at least $5 million of investable assets to qualify, but once they pass the whitelist certification, they can subscribe, redeem or transfer the token 24/7, which traditional money market funds cannot do.

BUIDL has grown into a fund that manages approximately $2.5 billion in assets distributed among more than 70 whitelist holders on five chains. About 80% of the funds are invested in Treasury bonds (mainly 1 to 3 months), 10% are invested in long-term Treasury bonds, and the rest are retained in cash.

Platforms like Ondo (OUSG) serve as an investment management pool, allocating funds to a group of tokenized money market funds such as BlackRock, Franklin Templeton and WisdomTree, and providing free stablecoin entry and exit.

Although the size of $10 billion is trivial compared to the $26 trillion Treasury bond market, the trend is significant: Wall Street’s largest asset manager is choosing public chains as a distribution channel.

Commodity

Tokenization of hard assets is pushing these markets to all-weather, click-to-click trading platforms. Paxos Gold (PAXG) and Tether Gold (XAUT) allow anyone to buy a small portion of tokenized gold bars. Venezuela's PETRO experiment puts crude oil into barrels; some smaller pilot projects tie the token supply to soybeans, corn, and even carbon credits.

The current operating model still relies on traditional infrastructure: for example, gold bars are stored in vaults, oil is stored in oil tanks, and auditors review the reserves every month. This hosting model brings centralized risks, and physical redemption is not always feasible.

The advantage of tokenization is that it can achieve split ownership of assets, making physical assets that have traditionally poor liquidity more likely to be used as collateral. This market has grown to $145 billion, almost entirely supported by gold. Compared with the $5 trillion physical gold market, tokenized assets still have a lot of room for development.

Lending and Credit: New Opportunities for DeFi

Decentralized Finance (DeFi) lending was initially achieved through over-collateralized cryptocurrency loans. Users can borrow $100 by locking $150 worth of ETH or BTC. This model is similar to gold-backed loans. Holders want to retain digital assets because they believe their value will appreciate, but at the same time require liquidity to pay bills or make new investments. Currently, on the Aave platform, the total amount of borrowing is approximately US$17 billion, accounting for nearly 65% ​​of the entire DeFi lending market.

In traditional credit markets, banks dominate the lending market through long-term validated risk models and strict capital requirements. As an emerging asset class, private credit has reached US$3 trillion in global asset management, moving in line with the traditional credit market. Businesses raise funds by issuing high-risk, high-yield loans, which attracts institutional investors seeking higher returns, such as private equity funds and asset management companies.

Putting credit on the chain can expand the lender's reach and increase transparency. Smart contracts can automate the entire process of loans, including fund issuance and interest payment collection, and ensure that liquidation conditions are transparent and visible on the chain.

Two on-chain private credit models

1. " Retail-oriented" direct loan

• Platforms such as Figure tokenize home improvement loans and sell split notes to retail investors around the world. This model is similar to the debt version of crowdfunding. Homeowners can get cheaper financing by splitting their loans into small shares, while retail investors can get monthly gains, the entire process is managed automatically by the protocol.

• Pyse and Glow tokenize the Power Purchase Agreement (PPA) by integrating solar projects and are responsible for all related operations, including installation of solar panels and meter readings. Investors can earn an annualized rate of return (APY) of 15–20% from their monthly electricity bill income just by participating in the investment.

2. Institutional liquidity pool: transparent private credit on-chain

• The private credit pool on the chain provides investors with a transparent operating environment. Agreements such as Maple , Goldfinch and Centrifuge integrate borrowers' funding needs into the on-chain credit pool, which is managed by professional underwriters. Depositors in these credit pools include primarily qualified investors, decentralized autonomous organizations (DAOs) and family offices. They track investment performance through public ledgers while earning 7–12% floating returns.

3. On-chain credit agreements that reduce operating costs

• These agreements effectively reduce operating costs by introducing on-chain underwriters to complete due diligence and completing loan issuance within 24 hours. For example, the Qiro platform relies on a network of underwriters, each with its own credit assessment model and is rewarded based on its analysis results. However, due to the high risk of default, such loans are not as fast as mortgages. When a default occurs, these agreements cannot be recovered through legal means like traditional finance, but need to rely on traditional collection agencies, which invisibly increases costs.

As underwriters, auditors and collection agents gradually enter the chain, the operating costs of the credit market will further decline, and will also attract more lenders to participate.

Tokenized bonds: the future of the debt market

Although bonds and loans are both debt instruments, there are significant differences in structure, degree of standardization, and issuance and transaction methods. Loans are usually "one-to-one" agreements, while bonds are one-to-many financing tools that follow a fixed format. For example, a 10-year bond with a 5% annual coupon is easier to be rated and traded in the secondary market. Bonds are public financial instruments and are regulated by markets and are usually credit ratings by rating agencies such as Moody's.

Bonds are mainly used to meet large-scale and long-term capital needs. Governments, utilities and blue chip companies often raise funds by issuing bonds for budgeting, factory construction or short-term financing. Investors obtain coupon income regularly and recover their principal upon maturity. This market size is very large. As of 2023, the nominal value of the global bond market has reached US$140 trillion, about 1.5 times the global stock market value.

However, the bond market is still relying on traditional clearing systems designed in the 1970s. Clearing companies like Euroclear and DTCC need to process transactions through multiple custodians, which increases transaction delays and forms a settlement time of T+2. Smart contract bonds can be atomized in seconds, and they can automatically distribute invoices to thousands of wallets. Such bonds can also be embedded in compliance logic and connected to the global liquidity pool.

The operating cost of smart contract bonds can save 40–60 basis points per issuance. In addition, the Treasurer can get a 24/7 secondary market that does not require payment of exchange listing fees. As Europe's core settlement and custody network, Euroclear manages 40 trillion euros of assets and connects more than 2,000 participants in 50 markets. Currently, they are developing a blockchain-based settlement platform designed to cover issuers, brokers and custodians, thereby eliminating duplicate operations, reducing risks, and providing customers with real-time digital workflows.

Source: Euroclear

Companies such as Siemens and UBS issued on-chain bonds in the ECB trial. The Japanese government is also testing the market, working with Nomura to put bonds on the chain.

Source: WEF Insights

Stock Market

This field naturally has a bright future because it has attracted a large number of retail investors, and tokenization can achieve an all-weather "Internet capital market".

The current obstacle lies in regulation. The U.S. Securities and Exchange Commission (SEC) custody and settlement rules were formulated for the advent of blockchain, requiring intermediaries to participate and T+2 settlement cycles.

However, this is changing. Solana has applied to the SEC to obtain approval for an on-chain stock issuance, providing a complete service including identity verification (KYC), education guidance, broker custody requirements and instant settlement.

Robinhood filed a similar application, requiring tokens representing U.S. Treasury bonds or Tesla stocks to be regarded as securities themselves, rather than synthetic derivatives.

Outside the United States, market demand is stronger. With no strict restrictions, foreign investors already hold about $19 trillion in U.S. stock. The traditional way of investing is through local brokers like eTrade, which work with U.S. financial institutions but pays high foreign exchange spreads.

Startups such as Backed offer an alternative, namely synthetic assets. Backed has completed a $16 million deal by buying an equivalent amount of underlying stock in the U.S. market. Kraken has just partnered with Backed to provide U.S. stock trading services to non-U.S. traders.

Real estate and alternative assets

Real estate is one of the asset classes that rely most on paper documents. Every property deed needs to be recorded in the government register and every mortgage is kept in a bank vault. Large-scale tokenization is difficult to achieve unless these registers accept hash as legal proof of ownership. That's why only about $20 billion of the $400 trillion of real estate in the world have been listed.

The UAE is one of the regions leading this change, with $3 billion worth of property deeds already registered on-chain. In the U.S., real estate startups like RealT and Lofty AI have tokenized over $100 million in residential properties and have directed rental income to investors' wallets.

Money also hopes to flow

Cypherpunks (Crypunk) believes that "stable dollar" is a regression, meaning a return to the traditional model of bank custody and licensing whitelists. Regulators are upset about permissionless blockchain systems, after all, which can transfer billions of dollars in a single block. In fact, the popularity of blockchain happens to be at the intersection between these two extreme discomforts.

Cryptocurrency purists may continue to complain, just as early Internet supporters had opposed the issuance of TLS certificates by central agencies. However, it is precisely because of HTTPS that our parents can safely use online banking today. Similarly, while stable dollar and tokenized Treasury bonds may seem “not pure enough,” they are the first time billions of people have come into contact with blockchain through an app that never mentioned the term “crypto.”

The Bretton Woods system once bound the global economy to a single currency framework, while blockchain technology broke this limitation by improving the operating efficiency of currency. Whenever we push an asset on the chain, it saves settlement time, frees up collateral that was originally idle in the clearing house, and allows the same dollar to support three transactions before lunch.

At Decentralised.co, we always stick to one view that speeding up currency circulation is the core application of cryptocurrencies , and putting real-world assets (RWAs) on the chain is just in line with this trend. The faster the value liquidation speed, the higher the frequency of reinvestment of funds, thus further expanding the overall economic scale. When US dollars, debt and data can all be circulated at network speed, business models will no longer rely on charges for the "flow" process, but will create new sources of income through the "momentum" effect.