E186 | The U.S. Stablecoin Issuance Wave: How Blockchain Is Reshaping Traditional Finance

Summary

• Sun Lijun’s core judgment: No technology can disrupt a network like Visa’s; only the network can keep adopting new technology to preserve its members’ interests. Visa represents the collective interests of more than 22,000 banks worldwide. Over the next 3-5 years, as commercial banks roll out compliant stablecoins, Visa and Mastercard will still set the rules for the emerging game, with Visa acting as the banks’ most powerful representative in stablecoin issuance—“the global payments and clearing networks led by Visa will set the rules of the emerging game.”
• One little-known detail: Circle sought to sell itself to Visa in 2020-2021. Sun’s personal view is that, had Circle and its investors not wanted an independent listing—and had that period not coincided with the SPAC boom—being acquired by Visa would have been USDC’s best route to winning a larger, potentially dominant market share. Only access to the network and capital pool of 22,000 banks could deliver the broadest adoption.
• The sharpest lesson from Libra’s failure is this: “Choosing a basket of currencies was a grave mistake; it should have chosen the dollar.” “Crypto is the dollar” (Crypto就是美元). If Zuckerberg had firmly positioned Libra as a powerful digital-era complement to the dollar, “it might have won.” Ethereum represents the ideals of a globalized elite, while Solana “looks very much like the American version of self-reliance.” Trump’s ban on CBDCs and support for privately issued assets and currencies is, at heart, a return to America’s ancient tradition that private actors may hold the power to issue money.
• The cost-reduction path is quantifiable: traditional Visa-network payments cost roughly 1% all-in, Alipay-style wallets bring that below 7‰, and settlement through smart contracts on public blockchains can bring it below 3‰. Blockchain’s fundamental value is compressing T+3/T+2/T+1 settlement into near-T+0, raising global liquidity “by more than 10,000x.”
• There are no truly new use cases; stablecoins will replace all the transaction methods and instruments that already exist. The 3 most tangible applications today are B2B commodity-trade settlement, cross-border e-commerce, where roughly 15-20% of volume is beginning to shift to stablecoins, and C2C remittances. MoneyGram has partnered comprehensively with Stellar to compete in the Middle East remittance market, while central banks across the region are discussing using stablecoins to bypass SWIFT. In the competitive landscape, Visa and Mastercard will monopolize pricing power at the first layer; Ripple and Stellar, along with other emerging U.S. public blockchains and ecosystems, may dominate the second. PlatON positions itself as “the Web3 Visa for emerging markets,” focusing on Southeast Asia, the Middle East and Latin America, where currencies are weaker and FX volatility is higher—but “even Ripple and Stellar must operate within the rules defined by Visa and Mastercard.”

Deep dive

1. Visa’s Origins: An Orphan Banker and a Philosopher-President

• When Sun Lijun joined China UnionPay’s strategy department in 2007, he translated Visa’s unpublished internal document The Power of Ideas. The story starts with BOA (Bank of America): its founder, Giannini, was an Italian-American orphan who got his start making small loans to grape growers in Northern California. His business slogan was “no different from the later Jack Ma—making it easier for everyone to borrow.” He later rode Hollywood’s rise to build the largest credit-card issuer in the U.S., then opened the business to other banks. That was the precursor to Visa.
• Visa’s first president, Dee Hock, was “a true thinker and philosopher” who distilled the company’s entire formula for success into one line: “It comes from, and only from, its community—the network of banks.” POS terminals (Verifone), signature systems and global data centers in Israel and the Caribbean were all developed by that generation. “You could even call it the first internet company and data-services company.”

2. Visa Was Already in the Game: USDC Integration and Circle’s Attempted Sale

• Visa launched its Crypto Partnerships program in 2022. In 2023, it supported settlement pilots connecting USDC issued on Ethereum and Solana to its network, and it has also been discussing stablecoin-wallet partnerships with World Network and others. Sun stressed that this is not passive defense: Visa is not an independent company but the representative of 20,000 banks, and “the rules it sets represent the basic common interests of commercial banks globally.”
• The most consequential disclosure was that Circle sought to sell itself to Visa in 2020-2021. Circle and its investors wanted an independent listing, and the market was in the middle of the SPAC boom. Sun’s view: for USDC to capture the largest possible market share, “being acquired by Visa would have been its best option.”

3. The Math of 4 Banks: Centralized Clearing and Blockchain Are Complements, Not Substitutes

• Why is Visa necessary? Sun’s thought experiment: with 3 banks, no Visa is needed; with a fourth, full connectivity requires 6 lines, while putting Visa in the middle requires only 4—“3 gives rise to all things” (三生万物). The logic becomes obvious with 20,000 banks. Universal interoperability is a public good: no bank can reach every user and merchant, but every bank wants its cards accepted at every POS terminal.
• The reverse is also true. Once membership reaches 1,000 or 2,000 banks, routing everything through Visa can begin to reduce efficiency. That is where blockchain gradually adds value: a peer-to-peer network can provide “an effective complement” to a centralized network. Sun expects JP Morgan, Citi and BOA to build their own consortium chains, then compete until they eventually reconnect, because each will need to collect money from the others and process FX settlement.

4. Technology Cannot Disrupt the Network: Complexity Creates Resilience

• Host Hongjun asked whether blockchain, as a parallel technology, puts Visa at risk. Sun’s answer was unequivocal: “Quite the opposite. No technology can disrupt a network like this; the network will keep adopting new technology to preserve its members’ interests.” The more complex the network, the more robust it becomes. China UnionPay, by comparison, may have fewer than one-tenth as many member institutions.
• How does the community stay together? Sun compared Visa to a “highly feudal Western European industry guild.” Who pays the fee, how much different card BINs are charged, how issuing and acquiring banks split the proceeds, and who absorbs the risk are all matters “argued, negotiated and debated within the guild.” The rules are so sticky that Alipay’s overseas push with Alipay+, including acquisitions of GCash and Paytm to build a separate wallet network, ultimately “did not work very well”; Alipay later exited several of those investments. When crypto institutions issue U cards today, they still need Visa or Mastercard to provide the card BIN and network access.

5. Libra’s Demise: Not a Conspiracy, but Historical Inertia—and the Wrong Currency

• Sun used telecom history as an analogy: the WiMAX alliances led by Intel and Motorola challenged telecom operators’ GSM standard and eventually disappeared. “The same thing happened in finance.” Bringing in David Marcus, the former PayPal CEO—when PayPal contributed more than half of eBay’s profits—was the right decision because they pursued the same idea: “Money that emerged in the internet era isn’t real money—you are using fake money.” Only blockchain could put money directly onto the protocol. But too many interests were threatened, and Visa and Mastercard withdrew under regulatory pressure. David Marcus was still posting on X about the pressure he faced at the time as recently as the prior 2 months.
• Sun rejected the idea that Libra failed because of political opposition or a conspiracy: “This is simply a problem of historical inertia.” A new institution cannot persuade every incumbent in 3 or 5 years, particularly when Crypto’s 2018 sandbox had not yet demonstrated technological stability or commercial viability. “Even bringing Visa in as a founding member would not have worked.”
• The more fundamental mistake was the currency choice: “I think choosing a basket of currencies was a grave mistake; it should have chosen the dollar. Crypto is the dollar.” A currency basket was like inventing Esperanto alongside English, Chinese and Latin—“no one would use it.” Trump’s logic is that defending the dollar’s pricing power and “America’s manifest destiny” allows innovative projects to win support. “The setbacks Ethereum faces today and Libra’s failure then can be seen as evidence of the end of the globalization era.” As an aside, “Solana looks very much like the American version of self-reliance”—America First in full.

6. Breaking Down Payment Economics: Who Makes Money on a $5 Coffee?

• There are 3 roles: the issuer, the acquirer (such as Worldpay, Global Payments or Lakala), and the network that routes and clears transactions (Visa, Mastercard or UnionPay). In Hongjun’s example of a $5 coffee, Stripe charges $0.3 plus 2.9% per transaction, with 70% potentially going to Visa or the issuer. Visa prices on the issuing side, using the card BIN to determine the rate—often 1%, 2% or even 3%; premium Amex cards cost more. China UnionPay prices on the acquiring side and follows NDRC guidance, with restaurant fees reduced from 1% to 7‰.
• The issuer takes the most, the acquirer comes second, and the network takes the least. But the network operates at enormous scale; once transaction volume is high enough, its returns on revenue become exceptionally strong. “That is why Visa’s market capitalization is so high.”
• Sun’s generational cost estimates, which he described as “not especially precise,” put the traditional Visa network at roughly 1% on average, Alipay+-style wallets below 7‰, and settlement through public-chain smart contracts below 3‰. That is the quantifiable expression of stablecoins’ value in iterating financial infrastructure.

7. Open Loops Beat Closed Loops: Apple Pay Is Both the Biggest Incremental Contributor and the Biggest Rival

• Ecosystem giants such as Apple Pay, Google Pay, WeChat and Alipay can independently build accounts, clearing, acquiring and marketplaces. “To some extent, they are the biggest challenge to Visa’s order, generation after generation.” But they are closed loops, while Visa is an open loop: it does not issue cards or directly develop merchants, and its quarterly and annual reports repeatedly emphasize that “in most cases it will not directly establish contact with the end merchant.”
• The historical conclusion is that open-loop networks have far higher margins and more sustainable growth than closed loops. “It looks like it owns nothing—but in reality it owns everything.” Hongjun sees Visa’s power as modeled on a republic: JP Morgan and BOA are the “Senate,” while the other 20,000-plus banks each contribute or exert influence in some way. Before its 2008 listing, Visa was divided into regional entities: Visa Japan could oppose Visa U.S. policy, and Visa Europe simply ignored the U.S. “It was like feudal warlords, with different autonomous entities in different places.”

8. Crypto’s 5 Genealogies: From Linux to Mesopotamian Clay Balls

• Sun traced Crypto through 5 lineages: ① the open-source movement, with Torvalds “still managing a frontline project and still getting angry and yelling at people,” alongside Stallman; ② cyberpunk, with Satoshi as a culmination rather than the first pioneer—the white paper’s consensus mechanism, elliptic curves, signatures and electronic-cash design all came from the tradition of anonymous, peer-to-peer electronic money beyond government control, and “we can say with considerable confidence that Satoshi was a PhD in cryptography”; ③ distributed systems, including consensus algorithms such as PBFT that date back to the 1980s; ④ cryptography; and ⑤ monetary history.
• The deepest cryptographic contribution came when Yao Qizhi posed the millionaire’s problem for MPC and no one knew its commercial application. Today, “the overwhelming majority of Crypto custody and wallet management is built on MPC.” It produced 3 successive layers of trust in transactions: Trusty (licensed and trusted) → Trustworthy (deserving of trust) → Trustless (requiring no trust). No license or institutional reputation is necessary; transactions can take place within an ecosystem constructed on cryptography and mathematics.
• A terminological correction: Crypto does not mean “encryption.” Encryption is only one type of cryptographic algorithm, and “there is not even any Encryption in the bitcoin Satoshi constructed.” Cryptography is the field; password should be rendered as “passcode.” “These misreadings reflect, in some sense, the enormous gulf between East and West. Getting the name right matters.”
• Monetary history supplied Sun’s favorite theory: “Money is a form of memory.” The word token comes from Mesopotamian clay balls wrapped and used as seals. Gold is “the memory of 4 billion years of changes in the Earth’s crust—the most important consensus on the planet.” With Bitcoin breaking above $100K, Sun sees it as “a public memory in a computational network constructed by humans, in an ownerless state.”

9. Financial Infrastructure vs. Financial Institutions: Disconnection Can Be Stabilizing

• Banks, insurers and brokerages are financial institutions because they own their own accounts. Visa, Mastercard, DTCC, Euroclear and China Securities Depository and Clearing are financial infrastructure: they do not own accounts and only handle clearing, settlement, registration and custody. They “typically do not issue their own account systems, wallets or stablecoins.”
• Many asset classes still are not fully connected between DTCC and Euroclear. Sun once found that puzzling, then understood what financial stability means: “A fully interconnected world can be fragile.” A single point of failure can bring down the entire network, while a partially connected or even partly isolated world has ample redundancy. After Lehman collapsed in 2008, final clearing and settlement was completed by Euroclear, because only custody and depository institutions know where every dollar and asset went. “That is why central counterparties occupy such a powerful and detached position.”
• This also complicates the case for decentralization. Trustless systems “may be a utopia.” They can improve parts of the licensed and compliant system, “but there is no substitution relationship between the two. It is like losing your money: you will ultimately call the police, not fully trust an algorithm to recover it.”

10. Blockchain’s Fundamental Value: From 84,400 Seconds to 1 Second

• Returning to Satoshi’s white paper, Sun said the technology’s fundamental value is “dramatically improving the efficiency of clearing and settlement”: turning T+3/T+2/T+1 into near-T+0, with Japan’s settlement cycle reaching as long as 1 month. The trade-off is to give up single-point performance in exchange for integrated clearing and settlement. The traditional process is serial—payment, overnight netting, then next-day posting—fast at the individual point but prone to errors; Alipay’s Singles’ Day system “would often be overwhelmed by the night’s transactions.” Turning T+1 from 84,400 seconds into 1 second of settlement raises global liquidity “by more than 10,000x.” DeFi and the various Fi experiments are simply built on this foundation; 12 years of Crypto Native creation amount to “a systematic sandbox for the evolution of human financial infrastructure.”
• When Hongjun noted that transfers already feel instantaneous to users, Sun answered with a telecom analogy: cash is 1G, bank cards are 2G, Alipay and WeChat are 2.5G, and “digital currency represented by blockchain is the real 3G.” An instant online-bank transfer only means that the backend database has recorded an entry. “The money you are dealing with is simply an entry the bank has made for you.” In the digital-currency era, the money is actually in your wallet, like a banknote in a physical wallet.

11. Trump’s Two Sides: Banning CBDCs and Returning to the Ancient Tradition of Private Money Issuance

• Hongjun’s practical objection was that users only care whether money can be spent—who cares who keeps the ledger? Sun acknowledged that “your rights are ultimately protected by law, not technology.” A bank that has a contract with you has a full obligation to compensate you; Cyberpunk is the tradition that pursues “Code is law.”
• Sun’s reading of Trump has 2 sides: he gives public chains and digital currencies strong legitimacy and legal backing while pushing legislation, but his family’s token issuance is viewed by the community as a retail fleece. The framework is that Trump banned CBDCs in his first week in office, breaking with the rest of the world, just as the dollar is issued by the privately owned Federal Reserve rather than the government. “He is returning to a very ancient tradition: the power to issue currency can be privately owned.” “There will certainly be all kinds of disorder early on; it will improve later.” A former People’s Bank governor once told Sun that even in China, an individual can legally issue a currency: “Hongjun, you can issue a Hongjun coin, as long as the people around you recognize it.”

12. Use Cases and Market Structure: No New Scenarios, Only全面 Replacement; PlatON as Emerging-Market Filler

• SWIFT is fundamentally a Financial Message Provider: it handles information flows, not money flows. When Sun prepared a blockchain report for SWIFT China in 2018, he learned that its CEO had once considered issuing a token resembling a currency basket, but “it could not possibly disrupt its own tradition.” The 3 main stablecoin use cases are B2B commodity-trade settlement; B2C cross-border e-commerce, where roughly 15-20% of volume has begun shifting to stablecoins and merchants in countries with difficult FX have every incentive to convert fiat into stablecoins immediately on receipt to protect margins—“otherwise a 10%, or even 20% or 30%, move in a single day wipes out the profit”; and C2C remittances. MoneyGram has partnered comprehensively with Stellar since 2023 to compete in the Middle East remittance market. Central banks across the region have repeatedly discussed using stablecoins to bypass SWIFT and defend financial sovereignty. Sun’s deliberately unglamorous conclusion: “There are no truly new use cases. All the transaction methods and instruments of the past will be replaced by stablecoins, and I am fully confident of that.”
• If one must identify the main point of change, “it is certainly the institutional transformation of financial infrastructure.” Front-end financial institutions gain the ability to issue stablecoins and new digital assets; end users ultimately notice only new assets, higher yields and cheaper remittances.
• PlatON’s positioning is “the Web3 Visa”: a global payments and clearing network powered by stablecoins. Sun acknowledged the hierarchy. Visa and Mastercard occupy the first layer and monopolize pricing power—not only fees, but also “highly complex business rules” and risk allocation. The second layer may be dominated by emerging U.S. public blockchains or ecosystems represented by Ripple and Stellar. “Our industry benchmarks are still Ripple and Stellar.” PlatON is targeting Southeast Asia, represented by Singapore; the Middle East, represented by Dubai and Abu Dhabi; and Latin America and Africa—markets with weak currencies, limited central-bank oversight and limited banking technology capabilities. It is “trying to fill a gap within the global order. Of course, if there is an opportunity to define new innovation together with them, that is the opportunity.”