The stablecoin welcomes its first regulatory framework, the encryption industry enters a new stage, market reactions are complex, and TradFi accelerates its integration with Decentralized Finance.
Original Title: “Stablecoins Are Now Legit, but That’s Only the First Step - Bits + Bips”
Host: Steve Ehrlich, Chief Contributor at Unchained Kingdom; Noelle Atchison, Editor and Chief Analyst of “Crypto is Macro Now”
Guests: Ram Alawalia, Head of Wealth Management at Lumida; Cosmo Jiang, Senior Trader and Liquid Strategy Portfolio Manager at Pantera Liquid Vault
Podcast Date: July 24, 2025
Organized & Compiled by: LenaXin, ChainCatcher
ChainCatcher Editor’s Summary
This article is adapted from the Unchained podcast segment Bits + Bips. With the introduction of the GENIUS Act and the stablecoin bill, the United States has established a clear regulatory framework for stablecoins for the first time.
Why does Noelle say that the stablecoin bill is just the beginning? What does Ethereum’s latest rebound mean, and what is its essence? How does Trump’s threat to fire Powell shake macro sentiment?
This issue will discuss topics such as the rise in Ethereum prices, the interpretation of the “GENIUS” bill, the independence of the Federal Reserve, and the rise of emerging encryption asset management companies.
ChainCatcher has organized and compiled.
Highlights Summary
- Noelle: The stablecoin bill is just the beginning of the regulatory process.
- Noelle: Tokenized money market funds may become the biggest winners.
- Noelle: Circle’s core source of income is the interest margin, and interest rates will eventually decline.
- Noelle: Current macro data is as expected, CPI meets expectations, there is insufficient reason for interest rate cuts, and economic growth data is stable.
- Cosmo: The legislative improvement of market structure and regulatory framework is where fundamental change lies.
- Cosmo: The Decentralized Finance sector will become the biggest beneficiary.
- Cosmo: The core challenge facing market judgment is how to define “others” in the realm of encryption according to traditional investment wisdom.
- Cosmo: The key to a successful token lies in the scale effect.
- Cosmo: While Coinbase is the preferred choice, the market can fully accommodate other competitors, though the allocation weights may vary.
- Ram: It is expected that the importance of payment giants like Visa and MasterCard will significantly decline over the next decade.
- Ram: There is an interesting paradox in market operation mechanisms: the more decentralized a system is, the more centralized market leadership is needed.
- Ram: “Shareholders are users” This innovation reshapes the market landscape.
- Ram: Finance Minister Besson clearly stated that “stablecoins can strengthen the dominance of the US dollar,” and this policy direction significantly benefits Ethereum, which carries the majority of stablecoin traffic.
- Ram: It is expected that more cases will emerge in the fourth quarter, and the market may see a recovery by the end of this year or early next year.
The stablecoin law is just the beginning
Steve: What are your deep impressions of the bill signing ceremony itself, or the reactions from the crypto industry over the past 72 hours?
Noelle: The United States has made significant breakthroughs in cryptocurrency legislation. As the largest financial market in the world, the U.S. has introduced a specialized regulatory bill for cryptocurrencies for the first time, marking a milestone.
The stablecoin bill is just the beginning of the regulatory process. A more complex regulatory framework is still being developed.
The new regulations will allow the use of ETH or Bitcoin for everyday purchases and are expected to be included in pension and 401k account investment options.
Ram: The bill ultimately passed thanks to Trump’s invitation to 12 congressional leaders to mediate at the White House. His subsequent tweet about Bitcoin also created the “Trump tweet effect.”
However, the market reaction is surprising. Despite the simultaneous arrival of the good news from the bill passing and Trump’s tweet, the price of Bitcoin this week is lower than last week’s level. This phenomenon of “good news being priced in immediately leading to a peak” is not the first time; marginal assets like Litecoin are exceptionally active, indicating a strong speculative atmosphere in the market.
Cosmo: I still hold an optimistic attitude. Bitcoin has previously reached an all-time high, with significant gains this year. Although the short-term price reaction is muted, the improvement of market structure and regulatory framework is the fundamental change.
The most noteworthy aspect of the “GENIUS” bill is the movement of banks. Institutions such as JPMorgan, Citibank, and Bank of America have all indicated plans to launch their own stablecoins or tokenized deposits, suggesting that the transformation process may accelerate beyond expectations. These banks have formed digital asset teams comprising hundreds of people and have invested tens of millions of dollars in years of research and development.
Can Visa and Mastercard Survive in the Stablecoin Disruption?
Steve: The passage of the first encryption bill marks a new stage for the industry. Subsequent regulatory details and market reactions will determine whether it can translate into substantial development momentum. The market faces a critical choice: “realizing profits and exiting,” or continuing to position?
Ram: This milestone will bring about two fundamental changes:
1 Cryptocurrency and financial technology are deeply integrated, reconstructing financial infrastructures such as custody, lending, and payment.
2 The traditional payment system will undergo structural changes. The importance of payment giants like Visa and MasterCard will significantly decline in the next decade. The “GENIUS” Act is a crucial starting point for this transformation.
Noelle: I have a cautious attitude towards the rapid replacement of payment giants. The core competitiveness of Visa and MasterCard lies in decades of accumulated customer service, dispute resolution, and merchant management systems.
Moreover, if payment giants like Alipay decide to venture into the stablecoin sector, the market competition landscape may become even more complicated.
Cosmo: How will the profit pools of stablecoins be distributed? Will they spawn new businesses, or will they be absorbed by existing financial institutions?
Noelle: In a declining yield environment, Circle’s core spread income model will face challenges. Investors may turn to the DeFi space in search of higher returns.
Ram: The market will show a diversified development trend. Traditional banks and tech giants will compete, and in the next three years, segmented stablecoins targeting different scenarios will emerge. The ultimate beneficiaries will be the end consumers.
Who Will Benefit Most from the New Stablecoin Law
Steve: Could everyone share a not-so-obvious beneficiary or victim?
Ram: Traditional financial institutions will become the main beneficiaries. Infrastructure banks such as Custodia Bank, led by Caitlin Long, and Cross River Bank will benefit significantly. The advantages of traditional banks in the flow of funds allow them to earn considerable channel fees when connecting traditional finance with on-chain activities.
Noelle: Tokenized money market funds may become the biggest winners. In the future, funds can be smartly transferred between payment accounts and tokenized money market funds, achieving “smart asset management.”
Cosmo: The DeFi sector will be the biggest beneficiary. The on-chain characteristics of stablecoins will lead to a massive influx of funds into various Decentralized Finance protocols. Users will naturally choose on-chain innovative services. Regional banks may become the biggest losers, and their long-term decline trend will accelerate.
Ram: So what about intermediaries? There is another type of intermediary facing risks: investment banks. With the expansion of asset tokenization, their traditional business models will be impacted.
Cosmo: The law of capitalist development always points to reducing transaction costs and enhancing consumer welfare. Ram’s point is to the point: encryption technology and on-chain infrastructure are reshaping the structure of capital markets, and we may be witnessing the prologue of this transformation.
Are Regional Banks on the Brink of Collapse
Steve: In the context of limited resources, should regional banks fully commit to the stablecoin competition, or should they leverage the situation to lay out broader blockchain applications? Are regional banks on the brink of collapse?
Ram: Regional banks lack technical capabilities and can only rely on infrastructure providers like FIS and Jack Hunter to offer generic stablecoin solutions, which actually reinforces the advantages of large banks. Infrastructure providers like Paxos are becoming potential winners. They are still developing stablecoins for platforms like Robinhood and Kraken, replicating the distribution network established by Circle through Coinbase.
This confirms the “shovel sellers” theory: just as the tool vendors made the most money during the gold rush, in the stablecoin wave, the infrastructure providers (like Paxos) offering technical solutions to trading platforms may be more resilient than the issuers.
Steve: Are you referring to the regulatory issues that Paxos faced when it collaborated with Binance to issue BUSD?
Ram: To be precise, USDG is the stablecoin token they are issuing.
Noelle: Wallet service providers will encounter important development opportunities. The core pain point of user experience is the interoperability between different stablecoins. This is precisely the key aspect that wallet design can address.
What Does the Latest ETH Rebound Mean?
Steve: What do you all think about the significant rise of Ethereum?
Cosmo: The ETH/BTC exchange rate has nearly doubled in two months, reflecting a significant shift in market expectations. Large-scale purchases by digital asset custodians have become the main driving force, with the core logic being that Ethereum will serve as the infrastructure layer for the stablecoin ecosystem.
Steve: Ethereum is still in the process of scaling, what does this mean for audiences evaluating different ETH investment channels? For example, how should one choose between leveraged ETFs and encryption asset management companies?
Cosmo: Although the core issues such as the economic model of ETH still exist, several key changes are occurring:
1 Organizational Culture Innovation
- The long-standing efficiency issues of the Ethereum Foundation are changing.
- The organizational culture transformation led by the new director Tomas has been remarkably effective.
- A fundamental change in the interaction model with venture capital, Decentralized Finance protocols, and traditional financial institutions.
2 Improvement of regulatory environment
- Stablecoin legislation provides certainty for the industry
- Milestone events such as Circle’s listing enhance the credibility of the asset class.
- The value capture capability of Ethereum as a foundational infrastructure is enhanced.
These changes constitute substantial fundamental improvements. The positive cycle currently experienced by the Ethereum ecosystem is a typical characteristic of a fundamental qualitative change.
Noelle: There is still a cognitive gap in the encryption field. It is only when policies are implemented and become news that new investors start to pay attention, and the market has not yet fully priced it in. The current pace of advancing government bond allocation strategies has also not been fully digested.
Ram: This involves two dimensions: policy orientation and personal influence. The stablecoin policy is bringing structural changes, significantly benefiting Ethereum.
There is an interesting paradox in the market operation mechanism: the more decentralized the system, the more centralized market leadership is needed. The current lack of market volume for Ethereum is closely related to Vitalik’s relatively low-profile public image. In contrast, the Solana camp, including Kyle Samani, understands the art of meme propagation.
Steve: How will the ETH market conclude this round? There are obvious signs of market bubbles, and FOMO sentiment is spreading. How should investors respond?
Cosmo: The core issue is how to define “others” in the encryption market. Currently, native capital in the crypto space has fully deployed, while traditional financial capital has entered slowly but shows signs of involvement. This keeps me confident in my holdings, but the real wave of allocation still needs to wait.
What is the essence of the surge in digital asset financial companies
Steve: As the head of Pantera’s encryption asset management business, could you share your market observations?
Cosmo: We focus on innovative projects. Taking the Solana-based government bond company DFTV as an example, its pioneering value was quickly validated by the market, with institutions like Tether and Cantor successively launching similar products. This sector is experiencing explosive growth.
Although the industry will experience survival of the fittest, we continue to increase our investments. Witnessing the birth of a new category of enterprises is a rare investment opportunity.
Steve: How to identify truly high-quality investment targets? When you review a large number of financing proposals, what key factors do you rely on to make decisions?
Cosmo: The business model must first be validated through sustainability. The current market has seen significant homogenization competition, and the industry is undergoing a process of commoditization.
The key to success lies in economies of scale, which requires the token itself to possess:
-
a sufficiently large market capitalization (usually ranked in the top 10-15)
-
mainstream market awareness
-
clear value proposition
Execution capability is the decisive factor. The team needs to have both encryption-native marketing abilities and the ability to utilize TradFi tools.
Ram: As a cross-asset investor, we have noticed that the market has shown signs of fatigue. The seasonal characteristics of cryptocurrencies are particularly prominent, and next month coincides with Bitcoin’s traditional weak cycle.
The prices of digital assets are more reliant on market momentum rather than fundamental indicators. The current “self-reinforcing upward trend” mechanism is weakening, indicating that momentum-driven market conditions may face a turning point.
(Note: The “stamping engine” effect is explained as the mechanism of self-reinforcing upward trends.)
Can the wave of crypto companies going public rival the early successes?
Noelle: Recently, several encryption giants have submitted IPO applications. Does this mean that the market heat in the second half of the year will not be as strong as in the first half?
Ram: The trend of a large number of encryption asset management companies emerging continues. However, as similar projects increase, market attention is becoming dispersed, making it harder for investors to focus on industry leaders.
Noelle: The phenomenon of crypto companies like BitGo, Grayscale, and Bullish clustering for IPOs is worth noting. How long will this enthusiasm last?
Ram: The market still has investment enthusiasm, but the valuation system is clearly divergent. Some private projects are valued at only 35% of their publicly listed peers, while Coinbase’s price-to-earnings ratio is as high as 60 times. It is expected that more IPO cases will emerge in the fourth quarter.
Noelle: After the overvaluation in 2021, VC funding suddenly dried up. Cosmo, have you noticed any signs of recovery in VC activity?
Cosmo: The market capital is showing polarization. The benchmark effect of Coinbase’s 60 times price-to-earnings ratio makes the Pre-IPO rounds more attractive. Seed rounds and other early investments are still active, but the intermediate stages like A-C rounds are relatively quiet.
Steve: Despite the optimistic narrative, why is venture capital activity still lagging behind?
Cosmo: The open market accommodates many “qualified” enterprises. Taking asset management as an example, the investment portfolio will inevitably include multiple crypto trading platforms, but the weights will differ.
How Trump’s Threat to Fire Powell Shakes Macroeconomic Sentiment
Steve: What does Noelle think about whether Trump should fire Powell? The earnings season is approaching, could you briefly share the key points of focus and analysis?
Noelle: Current macro data meets expectations, and there is insufficient reason for interest rate cuts. This week, focus on housing data.
The impact of tariff policies is becoming evident, with significant price increases in affected categories. Trump’s threat to fire Powell is concerning, as it has substantially weakened the independence of the Federal Reserve.
The loss of the Federal Reserve’s independence will lead to a long-term deterioration of inflation. This year, the possibility of interest rate cuts is basically ruled out, and Powell must defend the independence of policy.
Steve: Even if Trump replaces the Federal Reserve Board member, will the new appointee yield to the president’s will? Will other members maintain their independent stance?
Noelle: The Federal Reserve’s policy depends on collective decision-making. Currently, the median view of the FOMC is relatively hawkish, and Trump can only replace at most two seats. The key lies in the traditional independence of the Federal Reserve. The committee members will certainly resist political pressure.
It is necessary to distinguish the driving factors of inflation: tariff shocks are one-time impacts, while the real risk lies in fiscal imbalance.
Steve: This week’s China-EU summit, von der Leyen will visit China next week. If exports to the US cannot be made, Beijing may turn to the European market for dumping. What are your expectations?
Noelle: The originally scheduled conference hosted by the EU was forced to adjust due to a counter-invitation from China, with the agenda compressed to one day, putting the European delegation in a passive position.
The tense situation stems from the recent inappropriate remarks made by the EU towards China, exposing its strategic predicament. The vulnerabilities of the European economy are increasingly apparent.
Closing Session: Share Opinions
Steve: As you all know, I usually ask each guest to share a contrarian insight they are eager to spark a debate about on Twitter.
Ram: Newbank is an interesting case. As the amnesty negotiations progress, the tariffs previously imposed due to the treatment of the former Brazilian Prime Minister are expected to ease. I believe there are investment opportunities in the Brazilian market, and Newbank is worth paying attention to.
Cosmo: The impact of Coinbase being included in the S&P 500 index in April has been underestimated. This change has forced global asset managers to reassess their digital asset allocation strategies, and currently, most institutions have chosen to overweight.
Noelle: I will focus on the Hong Kong “stablecoin” bill. After the bill comes into effect on August 1, it may introduce a Hong Kong dollar or Renminbi anchored “stablecoin”. In the context of China’s current push for digital Renminbi cross-border payments and expanding non-US dollar trade, this development is worth noting.
