Stablecoins Take Over: The $3 Trillion Future at KBW2025

Okay. Hey everybody. It is wonderful to be here with 12,000 people at Korea Blockchain Week's impact. This is an exciting conference. We're talking about some of the most important things in digital assets from what is by far and away the center of the universe for the digital asset industry.

Joining me today are three of the world experts on stable coins which are absolutely 100% the most important thing happening in crypto today. So that's you guys are all lucky audience members for being at the most important panel at the most important conference in crypto right now. So I'm going to let each of my panelists introduce themselves starting with you. It's so great to be here, David, and panelists. Korea is one of my favorite uh countries.

Soul is one of my favorite cities to visit. So, I'm Yelina. I'm the co-founder CE of Noble. Uh Noble is a purpose-built stable coin issuance protocol. We are f founded about three years ago after uh Terara's collapse, which I'm sure being in Seoul is familiar to some of you in the room.

We can talk about how Nobles principles from from that day have uh evolved to today where we're seeing this explosion of uh purpose-built infra for stable coins. Uh it's a pleasure to be here and excited for the conversation.

Great. Raj,

good afternoon everyone. My name is Raj Zwani. I run global business development for Binance. And I don't think uh we need further introduction.

I was going to say what's Binance again. [laughter]

Sam.

Hey everyone. Uh my name is Sam Casmine. I'm the CTO of Stable. And uh I also have a special place in my heart for Korea because before Staple, the first token uh I was actually a part of was launched in Korea in Seoul. So Korea has a special place in my heart for sure.

So here we are. It's 2025 and stable coins essentially have taken over and we know they have because one of only three bills this year passed in the United US government. That's right. There were only three bills passed this year by the US government

and one of them is a crypto bill called the Genius Act

and that's all about crypto stable coins and creating some sort of guard rails for those. So, you know what Sam, I'm going to nominate you to tell us a little bit about what the Genius Act is for this audience.

Sure. Uh so the Genius Act is a new banking bill from actually the Senate Banking Committee, which now that we're talking about fun facts is the first uh bill out of the Senate Banking Committee in over 8 years. It defines what a payment stable coin is and how it's regulated and how it should um have redemptions and how quickly and who should be the custodians. And essentially it defines exactly what a legal digital dollar that the United States uh OC, the actual federal government will recognize as a legal stable coin that can be integrated into banking deposits, payment processors and and everything um like the fintech layer, application layer. So Yeleno, what are like some of those basic principles?

Like for example, these stable coins need to be fully backed. Is that right?

Yeah, absolutely. So maybe taking a step back for a second, what is a stable coin and and why do we need uh proper collateralization for these stable coins? So uh throughout crypto's history, you know, we had the first stable coin being tether, the second uh sort of well-known, but definitely not uh the the second in in history, but the well-known being circles USDC. Uh and from there, we've had um you know, many others. And basically throughout that uh process, we've discovered that full collateralization by a combination of uh short-term treasury bills and/or cash deposits would be the best way for stable coins to maintain their peg to the US dollar.

uh obviously I mentioned uh you know throughout history there have been other failed experiments I would say where the peg was not maintained and you have uh now the US government basically creating uh the rules of the road for many other issuers to come to the forefront and basically compete with the tethers and circles of the world

but I mean there are officially other types of stable coins exist aren't there Raj like for example maker now Sky developed an overcolateralized stable coin that used other types of collateral backing uh And there's been other algorithmic stable coins that have been produced before. Uh can you tell us a little bit about kind of the universe of stable coins that aren't necessarily genius compliant?

Absolutely. I mean the whole idea of a stable coin, right, is simply about having a token that is backed by something that has low volatility, right? And so what do I mean by that? Something that actually, you know, if you look at your bank accounts today, right? Those are actually digital dollars that have already been stable coins.

If you think about it, right, cash pre the iPhone world, right, was the best definition, right, of a stable coin really now in your bank accounts, if you have HSBC or if you have Hana Bank over here, those are stable coins sitting in a portal, which is your bank account, right? That is already accessible to you. The difference here is that for a lot of normal people, you never got the benefits of holding that cash stable in a certain place. With all these different types of stable coins that have come out, you can get certain types of benefits, right? So if you look at a company like Athena right what they're basically saying is look if you keep your cash here right and we give you this stable version of it what we will do is we will share with you right a percentage of the yield we generate from certain activities for other stable coins it's we will share with you a certain percentage of the activities we or the fees we get from payments right or we will share a certain percentage of the benefit benefits we get from dealing with other

and some of those have been very popular but worth noting sharing the yield so to speak with end consumers is not genius compliant is it?

Yeah, I'll I'll push back on on a little bit of that because I do think Genius is setting the framework for not just the US but um for every other jurisdiction to kind of follow suit because you do need safe collateral that is properly managed in in real bank accounts. Um and so as it relates to you know genius obviously you have this uh very clear distinction in the in the uh legislation which is around yield. So if I'm the issuer uh I cannot by default pass on the yield but I think one of the nuances that people um you know sometimes kind of identify is of course if I'm a distributor like if I'm Coinbase I can pass on the yield. So it's not as simple as yield or no yield.

Fascinating.

Yeah. So, if I if I'm going to add a little bit here is fun fact is actually back in March, I I helped draft part of the actual bill uh in in DC. I'm US-based and uh one of the first things when this was being drafted out of the banking committee, they had a large amount of entrepreneurs that are US-based, the blockchain association, uh Stand with Crypto, everyone give insight. And one of the main things that the Genius Act is trying to do in terms of intent is to delineate between stable coins that are not hypothecated in any way, which by that we mean stable coins that are just backed by legally cash equivalent reserves, which the US government has a specific definition for, and stable coins that do everything else. So, for example, you brought up Athena.

Uh they they do some really interesting carry trade and and they distribute that uh yield. And there's others, right, like Maker Dow with the collateralization of CDPs and the interest rate goes to the the holders of USDS, right? Um the the law actually makes no distinction about any of those things. They say that go ahead and do them, you know, do that at your own risk, but the law defines what is a payment stable coin that does absolutely nothing else.

Yeah.

And so these would be like Tether, USDC, USD1, and a number of others that have popped up. One of the other things that's uh now is seemingly permissible is that there can be totally new issuers of stable coins that maybe couldn't do this before like for example banks. Do we see a future where regular banks ising stable coins?

So so definitely so one other thing about genius Sam really cool to to know that you helped draft part of that bill is uh who can be an issuer. So yes, financial institutions, banks, fintexs, these uh entities by default can uh you know become compliant under genius. Uh entities that cannot become compliant kind of by default are uh big tech companies whose primary business function is not um financial in nature. So they can be part of a consorcia to uh issue stable coins but they cannot own a majority of a stable.

Feels like an attack on Facebook. Well, actually the yes, I mean the reason why uh it's written as such actually goes back to uh obviously the Libra days where there was intense scrutiny over big tech basically becoming a bank and having you know uh overdue power to you know close bank accounts. Actually, fun fact, it actually goes even before that. Uh when you had um you know, basically banks lobbying uh to become social media companies and big tech was like, "No, no, we're not going to basically allow banks to control your social uh loginins and uh have this uh kind of

it would be the most boring social network ever."

Yeah. Well, this was when big tech was like just starting out or right and social media was just becoming a big thing and banks, well, we want a piece of the pie. We want to become uh you know social media companies and we want to be able to not only control your access to your finances but also to your social uh profile. So anyway,

so that's where it started.

Yeah. Back back like 10 years or

Okay. So let's go back to today just for a moment because I think the history and context is essential. But look how big stable coins are. Last year there were more stable coin transactions. There was the total transaction volume eclipsed for stable coins Mastercard plus Visa.

Yeah. Is that possible?

Well, not just possible, it happened, right? Um, and actually when a lot of the work we do with emerging market governments, right, is we basically sit down with them and they're having almost an existential crisis here, right? If you look at most emerging market governments, they have capital controls. They have spent decades protecting the flow of local currency within their economies, right? And when they saw the US wake up one day and suddenly one of the largest holders of you know US backed bills right is a crypto company right and it basically became the best proliferator of US dollars since you know the the oil peg the dollar right or or since petro dollar a lot of these local governments are saying hey wait a second if the US is starting to become friendly to stable coins why are we not looking at our local economies and looking at locally issued you know locally backed stable coins as well.

So, are you seeing right now that countries are trying to issue their own fiatbacked stable coins that are not US dollar denominated?

And I say this because what is it something like 95% of all stable coins today are US dollar denominated?

99

99 over again, right? If you if you look at most emerging market governments, right, and most emerging market banks, you can't even get access to a US dollar bank account. But in today's world, you can download an app and suddenly have USDT. So it most of their citizens at least from a theoretical perspective now have dollar access without actually it being regulated in that country without it being you know provided by secure safe operating rails. So they again are starting to wake up to this fact where where the US government is saying, "Hey, look, we're happy with the world using dollar backstable coins, but all of these other local economies are going to say, "Hey, well, actually, why are we letting our citizens uh bypass our local currencies, right, and move straight to the dollar?"

It's it's fair. I mean I wouldn't necessarily if I were a a non US country want to go and have all my citizens using US dollars but at the same time it is great Sam for the US dollar to have this enormous support of commercial purchasers of US treasuries. Yeah, that that's definitely true. And and like uh Secretary Scott Besson says in his estimations about uh three trillion supply of Genius compatible stable coins he expects to see by by 2030.

And we're at fewer than 300 billion in total stable coins today. No.

Yeah, that's like at least a 10x just in the next 5 years. And but what I find really interesting uh is actually what I feel like the mix of those will be, right? which is there's probably going to be a hyperstable coinized world of branded stable coins and like like Starbucks USD, Walmart USD and all of these things, but there will be a short list of stable coins that are money like USDT, like USDC. And these stable coins are the things that every other stable coin will come in and out of because you're not going to buy something from Walmart with Starbucks USD. You're not going to buy your coffee with Walmart USD.

You're going to do it with Starbucks USD, for example, right? And so these are more similar to tokenized gift cards as I like to think about them. And the most important thing to to think about is which are the stable coins that are more like money and what are they doing, right? And that's why the the biggest stable coins like USDT are working with specialized chains, right? And USDC is working with specialized.

I wanted to ask about that. So of course the very first stable coin tether started on Ethereum and then it switched over to Algrand and then we started to see or no that was USDC I should say that did ALGO but we started to see it proliferate on other blockchains and right now for example on TRX we see a lot of the USDT that's the way it currently stands um we see in fact kind of silos of stable coin liquidity so my first question before we even get into these focused stable coins or sorry focus chain Is is there an issue with having stable coins across many different blockchains? Is this a problem? Yeah, both circle and tether um ha and other issuers have this multi-chain strategy where they want to natively deploy across a number of protocols where there is applications uh trying to uh you know source uh stable coin liquidity and obviously you know in the case of tether uh they have outsized um you know supply on tron uh you know for USDC you can you can also make the same uh sort of comparisons but basically uh you know this is also where like noble's journey comes We were basically built to solve for this multi-chain fragmentation across specifically the Cosmos ecosystem. Right?

So very early days there was this you know uh clear like sign that blockchains would become fragmented that developers would want their own uh dedicated execution environments to build the next hyperlquid. And if you have this fragmentation of uh you know liquidity, you're going to need a seamless access to native stable coins without having to strike a deal with you know circle or tether to sort of get that native issuance. And so yes, I actually think it's the very early days of fragmentation across many distinct purpose-built chains. And I actually think what's going to happen is we will eventually um you know see concentration among a handful of protocols. I don't know if that'll be 10 or 20.

Uh but you'll uh inevitably also have uh fragmentation to Sam's point around different stable coin uh use cases, right? Whether that's something on the loyalty side, on the B2B payment side, B TOC. I mean, it's a huge huge list. And you're going to need that purpose-built infra for those use cases to take off.

And some of this purpose-built infra could be as simple as making things much cheaper. No, Sam.

Yeah, exactly. And and in fact, that's what I think the the biggest stable coins like USDT and USDC need is they're going to be the ones used for payments FX in in between. We were talking about different kinds of national currencies of stable coins. So like we're here in Korea, right? So if you have, let's say, a Korean Juan token or stable coin, what USD are you going to go in and out of and how cheaply can you actually go in and out of it on chain?

And that's like one of the things for example, Stable is is working on, right? Right. And there's specialized payment chains that want to do zero transaction fees with their specialized stable coin partner, right? And so there's going to be a lot of those and then also things like Noble that solve the interoperability problem with a large issuer like USDC.

So Raj, is this a threat to Visa and Mastercard when it comes to payments? I mean, zero fee instantaneous transactions that operate seamlessly across lots of protocols sounds like a heck of a solution.

You know, it's funny. We we kind of have this theoretical argument all the time, right? Where, you know, will stable coins disrupt the big banks? Will they disrupt payment providers? Will they disrupt, you know, Swift even, right?

And if you look at all of these big firms, I think what's happening beneath or you know, under the radar is they're actually becoming a lot of the settlement mechanisms for this too, right? Like if you look at how a lot of the on-ramp and off-ramp happens in emerging markets, a lot of people are still using Visa and master. So on and off ramp into stables, right? And the name of the game is not which chain you're using, which platform you're using, even the use case. The name of the game is distribution, right?

And these guys have built one of the largest distribution networks in the planet

and they've built a heck of a lot of trust.

We we know that as well, right? You can argue that Binance is the largest distribution platform, right, that has been built in in a while, right? and we did it in under eight years. So really what's going to happen is regardless of use case, the reason why a Starbucks stablecoin can can exist is because Starbucks has the distribution platform. Visa and Mastercard have distribution that is very very difficult to build for any player that

not to mention millions of us have Starbucks apps that are effectively digital wallets on our phones already.

Exactly. But I think you just answered the question. Merchants and the distributors of these uh you know goods and services all around the world will actually dictate how they want their payments to be processed. You know, I was just buying a shirt at a store here in Seoul and they said if you don't use a credit card, you'll get 10% off. Like the incentives are there.

10% off

or 5%. The incentives. Yeah. 5%.

I would take that deal.

Yeah. Yeah. No, I mean I didn't have cash. How am I gonna get cash? And if I get cash from my Canadian bank account, that's going to cost me money on the forex.

So, actually doesn't make sense for me, but for the merchant, you you bet it does.

All right. Well, it sounds to me like stable coins were just the very beginning. Can't wait to check in again next year to hear what the numbers are then. Thanks everybody.

Thank you.

Thank you.

Thank you.

Thank you to our panelists. Thank you Sam for moderating [music] such a great session.