The future of earnings is uncertain, and payments are on the rise

Since the passage of the 2025.7 Genius Act, income stablecoins have encountered comprehensive resistance from the banking industry, and payment stablecoins have become popular.

Old payment has become a new hot spot, and Agent and stablecoins represent the complex relationship between Fintech & Crypto.

Benefit is the past, payment is the present, and AI is the futureIt is a dangerous and easily outdated taxonomy, but it gives us a diachronic framework that is easy to understand.

Meta re-embraces stablecoins, Google has joined more than 60 companies to establish the AP2 alliance, and Stripe regards stablecoins and Agents as the future. However, the stock prices of PayPal, which has already launched $PYUSD, and Coinbase, which proposed the x402 protocol, both fell.

We urgently need to solve two problems. One is the source of power to pay for the new war. Who is fueling market sentiment? The other is whether Agent and stablecoins are tickets for the next stop.

This article focuses on the former. The relationship between AI, blockchain and stablecoins will be left to the following. The outlook for the income of stablecoins will be after the bill is clarified.

The loser eats the dust, Fintech is more anxious than Crypto

Encryption has hope, but individuals have no future.

U.S. stocks and U.S. bonds are on the chain one after another, BlackRock and WisdomTree are frequently embracing DeFi. Token economics is inevitably coming to an end. No one believes in the wealth creation effect of blockchain anymore. Even if the public chain and Vault can be actually adopted, it does not mean that the currency prices of $ETH and $Aave will rise.

This view is not wrong, but it exaggerates the difficulties encountered by Crypto, because Fintech has reached a critical moment of life and death.

Yes, this counter-intuitive judgment can be made after Stripe exceeded $159B valuation.

Thinking along the lines of Peter Thiel's capital flow, clearing Wise stocks, sticking to NeoBroker projects such as Trade Republic, or following the lineup of luxury investors of Revolut ($75B), the most valuable NeoBank project in Europe, the valuation logic of Fintech has changed.

After more than 20 years of hard work,Fintech has failed to build a payment channel independent of banks. Only if it can retain or convert user funds can it be valuable. Wise's transfers and Stripe's receipts have no real future.

One reason is that they cannot completely bypass the banking industry to process funds, and the other reason is that blockchain can do it cheaper.

This is not simply a problem of one company. The entire Fintech track has reached its peak during the epidemic. PayPal, which is rumored to be selling out today, will be worth $340B in 2021. And by 2026, the entire Fintech track will have to work hard to prove that it is more advantageous for stablecoins and Agents.

Stripe's valuation is 5 times that of Adyen's market capitalization ($35B) and about 13 times that of Checkout.com's valuation ($12B). However, Stripe's business volume is not 5 times that of Adyen. The leverage comes from people's imagination of the concepts of stable currency and Agent.

The anxiety of Fintech companies is far more serious than that of Crypto. After all, "Public chain + stable currency" is self-contained, and DeFi is a killer application. The new payment war we are seeing now is nothing more than the fire of Fintech to increase the valuation arch.

Fintech only has existing advantages, and the future belongs to the encryption industry.

According to Forbes data, payment, as a benchmark of the Fintech track, takes an average of 8.1 years to make the list, but Crypto only takes 6.2 years.

Or from a direct business perspective, Long-distance runners such as Stripe need to give the capital market an explanation, or even a reason for exit, and the occupied funds need to be allocated for an updated or larger future.

• Bigger: Agent will exponentially increase the number of payments. The Collison brothers, founders of Stripe, believe that a chain with 1 billion TPS is needed;

• Update: Utilizing stablecoins to completely revolutionize the existing payment technology stack is the biggest technology change moment since the API-first model.

But to realize this bright future, Fintech not only needs to prove that it is better than Crypto companies, but also faces the obstruction of the banking industry and Internet super platforms. There are so many participants that Ping'an County is completely in chaos.

Compared to unicorns such as Stripe, super platforms such as Meta/Google are much larger, with trillions of dollars in market value and billions of users. They mainly participate in profit sharing as channel parties. You can say that they see the hope of making their own stablecoins or payment protocols, or you can say that they rely on their existing advantages to sell more expensive tolls.

Under the leadership of the most benevolent and merciful Vitalik, Crypto took the initiative to hand over an independent hardware layer to the Internet, resulting in it becoming a sojourner of AWS. But at least, blockchain technology, as a new infrastructure for money circulation, has gained consensus from the banking industry, the Internet, Fintech and regulators.

What remains to be agreed upon is whether to completely replace banks, and how payment stablecoins can surround B2C businesses from the C2C/B2B dichotomy.

Orangutans cherish each other, Tether and Circle's two-way encirclement

USDT disappears into the dust and enters the third world to surround Europe and the United States. In the USDC chain, compliance only replaces the protective color of banks.

Blockchain can not only bypass the financial industry, which is dominated by the banking industry, and rely on the underground economy to achieve the "theoretical minimum" of independent existence, but also has shown the potential to crush TradFi in terms of capital efficiency during the 10 years of Ethereum's development.

The most interesting thing is that this crushing does not lie in the amount of funds. The $236 billion in $ETH, $300 billion in stablecoins, and $1.32 trillion in $BTC do not exceed the $2.5 trillion in deposits of JPMorgan Chase.

The advantage is that the banking industry can rely on alliances to lock down Fintech and PSP (Payments service Provider, or third-party payment)'s constant attempts, because you just can't bypass the banking industry and handle the electronic flow of US dollars alone, but the blockchain can, even the most difficult stable currency companies to enter and exit the banking system. There was Silicon Valley Bank in the past and Lead Bank now.

Capitalists can sell their own nooses, "traitors" in the banking industry cannot be digested by themselves, and Wall Street has no regulatory power.

The value orientation of supervision is very contradictory. On the one hand, after the 2008 financial crisis, the banking industry that was too big to fail was not popular, but on the other hand, the encryption industry may be more barbaric to the financial order than Wall Street.

Wei San Que Yi, as an ancient political wisdom, has been skillfully used by various bureaucracies time and time again.

Taking a closer look at the regulatory actions after the Genius Act, the Fed+OCC+CFTC+SEC opened the door to payment of stablecoins, but at the cost of erasing the existence of income-generating stablecoins in response to the "deposit loss" crisis in the banking industry and at the same time guiding stablecoins into the existing system.

Since Merrill Lynch invented the MMF (Money Market Fund) of the CMA (Cash Management Account) in the 1970s, the banking industry has accused it of causing the loss of deposits in small and community banks, but it is a done deal. The MMF supported by the CMA not only supports flexible deposits and withdrawals, but also has higher interest rates than bank deposits.

In the end, it was the banking industry that was gradually allowed to operate as a mixed business and provide products similar to MMF that finally stopped the loss of deposits. However, what is quite darkly humorous is that in the end, it was the large banks that relied on their scale advantages to seize the deposits of small banks.

Heresies are more terrible than heretics.

Stable currency income is not a problem. What the banking industry needs is to distribute income by itself, so as to avoid being eliminated by the historical process. Another example can be given. When Alipay and WeChat became popular in 2013, the US banking industry once again raised the banner of protecting small banks.

Of course, the ultimate victims are local American Fintech companies such as PayPal, which also planted the false narrative that third-party payment relies on banks to subvert banks.

But Crypto is different, really, she is different.

Faced with the onslaught of banking industry and regulation, Circle is undoubtedly more American and more compliant, while Tether is a stand-up from outside the region and underground. However, for a long time and in a wide area, $USDC and $USDT are not competitors.

Simply put, USDC is the "+ stable currency" logic of DeFi + B2B, while USDT is the "stable currency +" narrative of CEX + P2P.

It sounds strange, but it is true that USDC is more widely used in the DeFi field and is widely used for Quote assets. It far exceeds USDT in mainstream scenarios such as DEX/Lending, and except for Coinbase, the vast majority of CEX liquidity is priced in USDT.

In terms of adoption in the financial industry, USDC has become a standard stable currency, and stacks such as CCTP built for it by Circle are also the entrance for institutions to enter the chain.

But USDT is resilient enough. The $80 billion USDT on Tron supports personal transfer needs around the world. In Argentina and Nigeria, the dollarization of currencies is essentially USDTization.

According to a joint survey by Artemis and McKinsey, the 35 trillion global stablecoin transaction volume is not real enough. Only about 390 billion US dollars (about 1%) are paid in real stablecoins, accounting for 0.02% of the total global payment volume (more than 2 trillion US dollars).

• B2B payments: $226 billion (top use case, 60%, 733% year-over-year growth), only 0.01% of the approximately $1.6 trillion in global B2B payments.

• Global payroll and cross-border remittances: $90 billion (<1% global share).

• Clear settlement: $8 billion (<0.01% global share).

• U Card: $4.5 billion.

This data is obviously more realistic in daily experience. Perhaps the trend of stablecoin adoption is more important. You will see Fintech actively connecting to banks, but banks will resist stablecoin income while supporting more stablecoins.

If you look at Tether's recent actions, joining forces with Lutnik and launching USAT are just protective features. The investment of US$200 million in Whop is more realistic. It can be understood as a channel fee to buy 18 million users, and to surround the first world in reverse from immigrant remittances from the third world.

So you will seeCross-border remittance companies in Latin America ⇄ the United States, South Asia ⇄ Middle East, Africa ⇄ Europe will more generally support USDT, but Stripe and Huma use USDC by default.

The background of the currency circle is P2P, and Circle has the intention to BD companies and banks. The so-called B2B is widely reported today and is even regarded as a future development trend, which misunderstands the direction of payment itself.

As mentioned above, puretransfer, liquidation, and aggregationchannels do not have much value. The processing capacity is always a clear number and lacks the imaginative basis of the market rate. Everyone needs a graphics card to play games. The maximum sales of 7 billion 5090s is obviously not as high as that of AI in the fourth industrial revolution.

"Payment is not a SaaS or function, but an AI payment infrastructure similar to Cloudflare, and the distribution network cannot calculate value in quantity."

This is the story that Crypto wants to tell the world, to make stablecoins exist beyond payment and keep moneyend-to-endon the chain.

Up chain precipitation

People are talking about the demise of SaaS and the aging of channel providers, as if decades of Fintech will change hands overnight.

Of course things will not happen so fast, especially since it will take time for USDC to be adopted by B2B institutions. Tether's single push of USDT and the crazy buying of old channels may not lead to the future.

If you want to set an observation point for Crypto's payments story, the only useful thing is how to deal with the relationship between payments and returns, which is now very clear:

• If you want revenue effects, you can only stay in DeFi on the chain, just like MetaMask U card and Aave detoured to the United States, unable to enter the broader consumption system;

• If you want to pay scale, go to the OCC to apply for a banking license to issue compliant non-revenue stablecoins, and enter the vast financial derivatives field of the CFTC and SEC.

As for the Asian institutional-grade US dollar stablecoin $FYUSD issued by BitGo, and Circle's fellow euro stablecoin $EURC, they have chosen to limit themselves to one corner.

The essence of B2B is pipeline, the essence of C2C is scale, and the essence of B2C is plug-in.

Looking at the development history of payment stablecoins, the hope of replacing "card organizations" with new channels is provided by public chains/L2. However, the advantage of Fintech in "replacing" banks must be new products with MMF+ payment functions, that is, surpassing banks in terms of capital efficiency.

Peter Thiel is bullish on Neobank and Neobroker, and Vitalik is bullish on ETH-backed yield stablecoins.

At this point, Vitalik actually sees it more clearly. If there is no income stablecoin based on ETH to diversify the holding risk, at the very least, RWA assets should be considered to diversify the source of income.

In a word, withoutpayment function based on on-chain income, it will neither be able to get rid of the dominance of US dollar assets, but will eventually be domesticated by the OCC into the banking industry. People who are willing to give up freedom in exchange for security will ultimately gain neither freedom nor security.

The second dangerous judgment is made here. The existing B2B enterprise use cases based on USDC and the cross-border remittance projects that incorporate USDT transfers cannot bring payment stablecoins to the threshold of global adoption. They only have phased significance and will not become major players in the next era.

Image description: Payment for stablecoin circulation

Image source: @zuoyeweb3

The mission of revenue as a means of acquiring customers has been suspended. Under the blockage of the banking industry, not only the off-chain will be affected, but also the on-chain will stall after $USDe and $xUSD. It is indeed time to study the adoption of payments in the real world.

But be aware that if you only study payments and don't care about the income characteristics, you will miss the most valuable 50% of this wave. USDT/USDC is recruiting interest on government bonds. The banking industry has won the third impact and continues to use the cheapest current assets to dominate.

Conclusion

Following the footsteps of Fintech, I hope Crypto will have a different future.

Four power sources constitute a new battle for payment. Stripe and others are crazy about embracing new narratives for IPOs. Meta/Google see their bargaining advantages as channel parties. The banking industry wants to retain channel fees and cheap assets. Tether is investing heavily in payment companies with the fantasy of surrounding Circle.

Two new narratives are packaged into future scenarios. Stablecoins are taken for granted as Agent payment tools. No one has ever asked whether Agents need them?

This issue will be discussed below.