Written by: The Economist
Translated by: Centreless
One thing is clear: the view that cryptocurrency has not produced any noteworthy innovation is now a thing of the past.
In the eyes of conservative Wall Street professionals, the "use cases" of cryptocurrency are often discussed with a mocking tone. Veterans have long seen it all. Digital assets come and go, often in a blaze of glory, exciting investors who are enthusiastic about memecoin and Non-Fungible Token. Apart from being used as tools for speculation and financial crime, their utility in other areas has repeatedly been found to be flawed and insufficient.
However, the latest wave is different.
On July 18, President Donald Trump signed the Stablecoin Act (GENIUS Act), providing the long-desired regulatory certainty for stablecoins (crypto tokens backed by traditional assets, usually US dollars). The industry is in a period of rapid growth, with Wall Street professionals now competing to participate. "Tokenization" is also on the rise, with rapid growth in on-chain asset trading volume, including stocks, money market funds, and even private equity and debt.
[The translation continues in the same manner for the entire text, maintaining the specified translation rules for specific terms]Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC), known as the "Crypto Mom" for her friendly attitude towards digital currencies, emphasized in a statement on July 9 that tokens should not be used to circumvent securities laws. "Tokenized securities are still securities," she wrote. Therefore, companies issuing securities must comply with disclosure rules, regardless of whether the securities are packaged in a new cryptocurrency format. While this seems reasonable in theory, the large number of new assets with novel structures means that regulators will perpetually be in a catch-up state in practice.
Therefore, a paradox exists.
If stablecoins are truly useful, they will also be truly disruptive. The more attractive tokenized assets are to brokers, customers, investors, merchants, and other financial companies, the more they can transform finance, a change that is both exciting and worrying. Regardless of the balance between these aspects, one thing is clear: the view that cryptocurrencies have not yet produced any noteworthy innovation is long outdated.
