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Written in NYC on Sep 8, 2025
In August 2025, global financial cities began undergoing dramatic market changes under the impact of the stablecoin wave. Driven by the Genius Act and Project Crypto, and amplified by the wealth-making examples of MSTR and Circle, the equilibrium of traditional financial interest games has been broken. Stablecoins, token-equity linkage, DAT, RWA, and on-chain asset management have rapidly become hot areas of competition in this new environment.
Essentially, the implementation of the Stablecoin Act marks the starting point of a comprehensive reform in global financial tokenization. The second growth curve of crypto will unfold along the axis of stablecoin application scenarios and asset tokenization, leveraging the flexibility of crypto finance and the historical experience of traditional finance, forming differentiated development paths under various regional compliance frameworks.
tl;dr
1. The essence of the Genius Act is to delegate the power of currency issuance and settlement, thereby strengthening the pricing power of the currency.
2. Stablecoins, by changing the form of monetary pricing, have triggered global reforms in financial tokenization and asset tokenization.
3. The reform is rapidly dismantling the long-standing Cartel Alliances in traditional finance, creating opportunities for interest realignment amid chaos.
4. Trump successfully grafted his personal interests onto a historical turning point, thereby forging an incredible sense of legitimacy.
5. The Two Directions of Crypto–Equity Linkage: Securitization and Tokenization, and Their Market Characteristics.
6. The market characteristics and problems of stablecoins, DAT, stock tokenization, RWA, and on-chain asset management.
7. The second growth curve of Crypto has triggered industry fragmentation and cultural divides.
1. The essence of the Genius Act is to delegate the power of currency issuance and settlement, thereby strengthening the pricing power of the currency.
In a previous article titled “The GENIUS Act and On-chain Shadow Money”, we elaborated on the irreversible trend of declining U.S. dollar dominance, and how the GENIUS Act represents a trade-off decision to delegate issuance and settlement rights in exchange for broader circulation of the U.S. dollar. In fact, this move was further validated by the market within just three months of the GENIUS Act’s proposal. At this stage, loosening control over the issuance and settlement rights of the dollar — effectively via shadow currencies — has enabled dollar-denominated stablecoins to gain broader market application scenarios, thereby reinforcing a much wider pricing power. It is this pricing power that represents the future competitive consensus strength in on-chain finance, while the traditional monetary issuance and settlement rights will gradually fade into being generic infrastructural tools, losing their moat and competitive value.
The future “currency war” will be a competition of consensus strength in currency usage, rather than a contest over issuance and settlement rights. This is a fundamental reform in traditional finance, compelled by the rise of on-chain finance. Yet, it is a notion that many governments, regulatory regimes, traditional financial experts, scholars, and entrepreneurs have not yet realized — or find it difficult to adopt. In other words, the traditional M2 measure of on-chain currencies will gradually lose its original significance. The massive oversupply of currencies and tokenized assets will become a kind of freedom, but such freedom does not equate to equivalent value. True value will be determined by the consensus strength of currencies and tokenized assets, manifested through their liquidity, purchasing power, interoperability, community recognition, and other quantifiable market feedbacks.
Faced with this transformational inflection point, paradigm-shifting flexibility in thinking becomes critically important. Many traditional economic definitions, market regulation methods, and asset operation models will undergo fundamental change. For example, as M2 loses its original meaning, it may be revised by introducing a “liquidity value factor” as a multiplier, in order to derive a kind of effective circulation value of a currency or asset. Naturally, all types of monetary and fiscal policies will also require fundamental changes, to adapt to the emerging governance methods of the on-chain economy.
2. Stablecoins, by changing the form of monetary pricing, have triggered global reforms in financial tokenization and asset tokenization.
After the Genius Act quietly ignited this “new currency war”, countries and regions around the world rushed to introduce their respective stablecoin legislations. Although many of these legislations are still fundamentally anchored in the inertia of traditional monetary and financial rules and will require time to iterate and adjust, the overall on-chain reform of financial markets has already begun.
Although assets settled in 1 USD and 1 USDC (or other stablecoins) may not appear to differ much in pricing, their underlying monetary mechanisms are essentially different, thus greatly altering the financial significance of such assets. This is mainly reflected in aspects such as programmability, composability, market liquidity, differentiated circulation within ecosystems, and the flexibility of financial derivatives.
Recently, when friends from traditional finance backgrounds asked about the characteristics of on-chain asset management carried out by CICADA Finance, I would use the metaphor of a “financial motherboard”. Various financial asset strategies are much like different algorithmic “financial chips”. Through the plug-and-play selection of asset management, they form flexible financial combinations on the financial motherboard, while stablecoins serve as the “financial current” (Note 1) that connects the chips and the motherboard.
3. The reform is rapidly dismantling the long-standing Cartel Alliances in traditional finance, creating opportunities for interest realignment amid chaos.
From the Genius Act to Project Crypto, stablecoins and on-chain financial reform have essentially subverted the inherent interest model of traditional finance. At other points in history, this would certainly have triggered large-scale conflicts and contradictions, yet this time the transition has appeared smooth and widely acceptable. Is this because modern financial legal systems have made competition fairer, or because today’s institutions are more civilized than those of the past?
Of course NOT. The reason is simple: the global curve of social development today is moving too fast. The additional profits gained by enterprises that can see the trend and quickly transform far exceed the cost of losses that come from clinging to existing interest alliances and resisting. The financial Cartel Alliances of the previous stage were quickly broken and abandoned by enterprises that transformed faster. From Wall Street to all of New York, this time the collective choice was the (+3, +3) model to enter the new situation and engage in the game. This transformation process will inevitably lead to a period of chaos and restructuring in financial markets, while at the same time creating abundant trading opportunities for new assets and capital.
Over the past month in the New York market, I have observed that the degree of Cartel Alliances solidification varies significantly across industries. Although the financial industry, under the driving force of the Genius Act and Project Crypto, has rapidly transformed this time, many traditional industries (such as real estate) remain highly stubborn. Due to the strict control of admission conditions and information flows by monopolistic alliances, the trading environment in many industries is still very primitive, and many RWA assets are far from meeting the conditions required to enter the current wave of tokenization upgrades.
4. Trump successfully grafted his personal interests onto a historical turning point, thereby forging an incredible sense of legitimacy.
What remains worth mentioning is still the crypto president Trump, who has been driving this rapid development. Historically, pushing for reforms has usually been a high-risk endeavor, facing strong resistance and rarely winning favor — especially when one’s own interests are further grafted onto it, which tends to add fuel to the fire. Yet Trump’s maneuver was indeed carried out with remarkable precision at a very particular historical juncture, achieving an almost inconceivable correctness and legitimacy. By leveraging the opportunity for interest realignment brought about by an inevitable industry trend, he offset a great deal of negative confrontation, creating a very unique and non-replicable effect.
5. The Two Directions of Crypto–Equity Linkage: Securitization and Tokenization, and Their Market Characteristics.
Crypto–equity linkage is an important topic in Q3 2025. In essence, crypto–equity linkage in fact takes two directions: first, embedding token assets into listed companies, thereby forming a capital premium through the form of stocks; second, following the development of existing policies to tokenize stocks, mapping them into a 7x24-hour tradable stock-token market. The former is the process of Securitization, usually managed by the securities commission of a given country or region; the latter is the process of Tokenization, usually at present managed under alternative asset management regulations of a given country or region — sometimes under banking regulation over currency or payments, and sometimes under alternative securities regulation.
The securitization process of crypto–equity linkage in Q3 2025 has evolved a new term, namely DAT (Digital Asset Treasury). This is a process more flexible and universal than ETFs, whereby token assets are embedded into listed companies so that their stocks form a capital premium. The success of DAT in first-generation cases such as MSTR created a premium multiple of 1.5x–2x (with peaks close to 4x), and over the past half year has become the mainstream wealth-creation model in major financial cities such as NYC and Hong Kong. Compared with the initial MSTR–BTC cases, the differences in the DAT market as it enters late Q3 and early Q4 are as follows: 1) the expansion of embedded assets, now beginning to include non-BTC token assets such as ETH and SOL; 2) in addition to the stock premium multiple caused directly by asset embedding, financial instruments are beginning to be used to form leverage for higher capital or monetary multiples; 3) unlike MSTR, which carried benchmark political and economic significance, the practices of small and medium-sized listed enterprises are mostly entirely commercial, and thus the hidden risks of a Davis double-kill after gaining premiums will be more pronounced (And this is why the US has begun to restrict the freedom of DAT and crypto–equity linkage).
The tokenization process of crypto–equity linkage in Q3 2025 is still in its early stage. The main issues are as follows: 1) For retail (to-C) scenarios it is too early — current demand is not genuine (usually limited to extending trading hours and non-compliant period tax avoidance), and it remains in the early stage of infrastructure building and to-B; 2) It is not friendly enough for small and medium participants — due to the profit difficulty caused by issue 1), at this stage only mature players such as Robinhood and Ondo Finance are capable of supporting the early market; 3) Infrastructure building and to-B demand are relatively hidden and lengthy, and standalone business models are difficult to make money independently — it requires the formation of an industry chain to achieve overall resonance, which needs a growth period. Many entering institutions in the early stage have certain misjudgments about the development of stock tokenization, while the real needs and directions at the current stage are: 1) achieving compliant paths across different jurisdictions; 2) issuing large-scale stock-tokenized assets through low-cost purchase/borrowing/holding of securities; 3) forming large liquidity providers; 4) creating leverage multiples and derivatives markets through financial instruments such as lending; 5) providing the oversaturated token quant strategy market with a large amount of high-liquidity assets that contain alpha-exploitable value.
In comparison, as of Q3 2025, the securitization process of crypto–equity linkage is closer to money than the tokenization process, but its opportunity window period is also shorter. Conversely, the tokenization process of debt–equity–FX is a long-term development direction, an important step in the process of bringing assets on-chain, and will open a larger market for strategy-based quantitative financial assets.
6. The market characteristics and problems of stablecoins, DAT, stock tokenization, RWA, and on-chain asset management.
Stablecoins, DAT, stock tokenization, RWA, and on-chain asset management can be regarded as the “five golden flowers” of the crypto industry’s second growth curve and the process of asset tokenization. Among them, stablecoins, DAT, and stock tokenization have already been discussed earlier and will not be repeated here.
RWA is an interesting track. Last year it was unpopular, yet shifting into this year, although it has regained popularity, it has also presented more problems. These are mainly: 1) most of the assets — or even platforms — engaging in RWA treat it merely as a fundraising tool, without considering issues of post-issuance turnover and purchasing power, exit mechanisms, liquidity, yield generation, market making, or sustainability; 2) lack of, or no consideration for, the problem of fair value assessment of RWA assets and the Oracle process; 3) beyond the fundraising function, failing to conduct economic design and ecosystem building with composability and programmability, thereby making it no different from Web2’s P2P or crowdfunding approaches.
In the past few months, we have interacted with a large number of RWA partners. Abstractly speaking, the essence of RWA is constructing a “Tier-1.5 market” for certain non-standard assets. This is in fact a problem of “do not impose on others what you yourself do not desire”. For assets that inherently lack sufficient consensus, purchasing power, and liquidity, it is difficult to reach a one-step solution through RWA. The entire process of asset tokenization must still undergo the stages of standardization, fair valuation, marketization, and financialization of the assets themselves. For RWA assets, the most difficult and critical problem lies in large-scale, medium-term tradable liquidity — this is essentially the same problem faced by structured finance frameworks and liquidity disposal institutions in traditional markets, and it is one that still lacks effective solutions in today’s crypto asset tokenization market.
Compared with the more intuitive areas that many people prefer to focus on — such as real estate, digital collectibles, and artworks — the more suitable RWA assets for tokenization at this stage are in fact Supply Chain Fi and PayFi, whose underlying liquidity asset characteristics support the feasibility of tokenized trading flows.
On-chain asset management is essentially the comprehensive track of categorizing and managing various assets under the wave of stablecoins. At its core, it is a systematic engineering task of connecting Liquid Assets with Liquid Funds. From economic model design to platform products, from asset screening to asset management operations, it is far more complex than TradFi, requiring multi-dimensional professional actuarial and quantitative capabilities. In the past half year of growth along the second curve, CICADA Finance has rapidly iterated its on-chain asset management capabilities, pioneering new standards for on-chain asset management, and welcomes cooperation and dialogue with different assets and ecosystems.
7. The second growth curve of Crypto has triggered industry fragmentation and cultural divides.
After the SEC launched Project Crypto in August, the rapid growth of crypto’s second curve accelerated the further differentiation of the entire crypto market. North America, Southeast Asia, the Middle East, and Africa have all begun to show completely different patterns of divergence.
The development of native DeFi and the stablecoin ecosystem has shown the strongest momentum in New York and along the East Coast. RWA and crypto–equity linkage have opportunities in global financial cities, but each is subject to certain influences from its own policy particularities, compounded by the cognitive inertia of mainstream market participants, resulting in different modes of interpretation. Africa, South Asia, and South America are developing more from the perspective of Supply Chain Fi and PayFi applications — these are in fact the true mainstream emerging markets. Although not yet priced in by the crypto market, they possess enormous latent strength. By contrast, Southeast Asia has instead become the receiving base for the subsequent development of the first curve, where centralized exchanges and narrative-driven projects are gathering to generate new purchasing power.
Different social environments across geographies have created fragmented layers within the crypto market. Global finance is facing disruptive changes in financial reforms and asset pricing mechanisms along different dimensions, with stablecoins being only the first step.
Author: Gary Yang
Date: September 9, 2025
BX: https://x.com/cicadafinance
Note 1: For the concept of “financial current”, see the definition in the article Financial Circuit and Web3 Tokenomics Theory.
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