About Stablecoins, Let’s Tell It Like It Is
The future of stablecoins will most likely follow two paths.
First: go all the way down the unregulated route. USDT is a typical example. What it solves is the flow of global “gray” capital, cross-border settlement, and the real, urgent need in weaker financial systems. Users don’t use it because it’s “compliant”—they use it because it’s convenient, has strong liquidity, and broad consensus. This is demand-driven logic, and the underlying rationale is internally consistent.
Second: the compliance route. The core question for this path is actually only one—who owns the underlying U.S. Treasury yield?
For most compliant stablecoins today, the substance is this: users provide AUM, the project uses it to buy short Treasuries, and the entire risk-free yield of 3%–4% is kept in the project team’s pockets. Users bear the migration cost, liquidity cost, and opportunity cost—only to end up helping the project expand its balance sheet.
USD1 is the same. The underlying yield will most likely be taken by the team, and then they draw a “yield narrative” through tokens like WLFI. The design is clever, but it also shows one thing: what’s truly valuable about a stablecoin is never the coin itself—it’s the right to the yield of the underlying assets.
So Circle’s problem isn’t whether they can make money today—of course they can.
The problem is: as the market becomes more and more mature, why would users and channels long-term give you the tens of billions, even hundreds of billions of dollars in Treasury yield for free?
If you can’t share the yield, and you don’t have a non-substitutable payments network or channel monopoly, I think it’s hard to justify the long-term valuation of this model.
As for those who blindly hype Circle every day—let me just say: they’re looking at the compliance narrative, but they haven’t seen that the right to the yield is the core.
Long-term logic isn’t about who has more regulatory licenses—it’s about who controls the real asset-side pricing power.$CRCL $WLFI
The future of stablecoins will most likely follow two paths.
First: go all the way down the unregulated route. USDT is a typical example. What it solves is the flow of global “gray” capital, cross-border settlement, and the real, urgent need in weaker financial systems. Users don’t use it because it’s “compliant”—they use it because it’s convenient, has strong liquidity, and broad consensus. This is demand-driven logic, and the underlying rationale is internally consistent.
Second: the compliance route. The core question for this path is actually only one—who owns the underlying U.S. Treasury yield?
For most compliant stablecoins today, the substance is this: users provide AUM, the project uses it to buy short Treasuries, and the entire risk-free yield of 3%–4% is kept in the project team’s pockets. Users bear the migration cost, liquidity cost, and opportunity cost—only to end up helping the project expand its balance sheet.
USD1 is the same. The underlying yield will most likely be taken by the team, and then they draw a “yield narrative” through tokens like WLFI. The design is clever, but it also shows one thing: what’s truly valuable about a stablecoin is never the coin itself—it’s the right to the yield of the underlying assets.
So Circle’s problem isn’t whether they can make money today—of course they can.
The problem is: as the market becomes more and more mature, why would users and channels long-term give you the tens of billions, even hundreds of billions of dollars in Treasury yield for free?
If you can’t share the yield, and you don’t have a non-substitutable payments network or channel monopoly, I think it’s hard to justify the long-term valuation of this model.
As for those who blindly hype Circle every day—let me just say: they’re looking at the compliance narrative, but they haven’t seen that the right to the yield is the core.
Long-term logic isn’t about who has more regulatory licenses—it’s about who controls the real asset-side pricing power.$CRCL $WLFI