Stablecoins are the "royalists" of the crypto world: Open USD brings the old currency system into play

Author: Hu Yilin

The emergence of Open USD has shifted the competition for stablecoins from the market of crypto startups to a battle for infrastructure involving traditional finance, payment networks, technology platforms, and public chain ecosystems. Regarding this new alliance involving over 140 institutions, scholar Hu Yilin believes that stablecoins are not the moderates of the crypto revolution, but rather resemble the "royalist reformers" within the old currency system: they inherit the efficiency of blockchain while retaining the central position of the US dollar and the Federal Reserve. The true crypto revolution ultimately returns to a more fundamental question: must market life rely on central banks as the center of monetary order?

The Emergence of Open USD: Stablecoins Transition from Product Competition to Alliance Infrastructure

On June 30, Open Standard announced the launch of Open USD, a dollar stablecoin aimed at global capital flows. According to the official introduction, Open USD focuses on three design aspects: enterprises can mint and redeem at zero cost; reserve earnings are distributed to partners after deducting a small management fee; and it is operated by the independent company Open Standard, with a board of directors composed of partners participating in governance. The list of participants spans payments, banking, technology, and crypto industries, including Visa, Stripe, Mastercard, American Express, BlackRock, BNY, Standard Chartered, DBS, OCBC, Google, Shopify, Coinbase, Solana, Base, Ripple, MetaMask, Aave, and others.

The Wall Street Journal reported that Open USD plans to be available on networks such as Base and Solana later this year, with approximately 140 companies already signed on; the report also noted that USDT and USDC remain the two largest stablecoins, with a combined market value of about $260 billion. Barron's pointed out that after the announcement of Open USD, related companies like Circle and Coinbase saw their stock prices pressured, as the new alliance directly threatens the business model of USDC.

On the surface, this is an upgrade in competition within the stablecoin industry: more companies joining, more channels connecting, and a redesign of the reserve earnings distribution mechanism. However, Hu Yilin believes that the more significant meaning of Open USD lies not in how much market share it will take from USDC or USDT, but in how it reveals the historical position of stablecoins themselves: stablecoins do not truly challenge the dollar standard; they merely allow the dollar standard to operate more efficiently.

Stablecoins Are Not "Moderates," but "Royalists"

Hu Yilin supports the development of stablecoins because they directly impact fiat currency and the banking system, forcing changes in the real political and economic structure. However, he emphasizes that supporting stablecoins as a tool does not equate to acknowledging that stablecoins are the completed form of the crypto revolution.

He previously compared stablecoins to the Tycho system in the Copernican revolution: the Tycho system absorbed many technical advantages of new astronomy and could explain more phenomena, making it easier for traditional authorities to accept during the revolution; but it rejected the most core point—preventing the Earth from moving. Stablecoins are similar. They inherit the clearing efficiency, programmability, global liquidity, and cross-border payment advantages of blockchain, yet refuse to let the dollar leave its central position.

When discussing Open USD, Hu Yilin further distinguishes between "moderates" and "royalists." He said, "I think someone like Michael Saylor counts as a 'moderate'; he also wants to be compatible with the old system but holds onto the core revolutionary point of 'Bitcoin standard'." In other words, the Saylor approach can accept publicly listed companies, accounting standards, debt financing, capital markets, and regulatory frameworks, but it still views Bitcoin as a new standard asset. It compromises with the old system but does not abandon the revolutionary core of "the emperor can be replaced."

Stablecoins are different. Hu Yilin said, "Stablecoins certainly have historical significance, but they cannot be considered true revolutionaries." In his view, stablecoins resemble reformists within the old system, believing that "the emperor (the dollar, the Federal Reserve) is good; it’s just that the execution system below is somewhat bloated and inefficient, and the previous Eastern Factory did poorly, so now I, the Western Factory, will improve it."

This metaphor sharply points out the inherent limitations of stablecoins: what they oppose is not the dollar center, but the old payment systems, banking clearing networks, cross-border transfer systems, and the inefficiency of financial intermediaries. What they want to replace is the grassroots bureaucracy, not the highest authority.

Therefore, when the crypto revolution can only touch banks, payment companies, SWIFT, Visa, Alipay, and other "execution systems," stablecoins appear to align directionally with more radical cryptocurrency routes: they both oppose the expensive, slow, and opaque old financial system. But once the issue touches the dollar, US debt, the Federal Reserve, and the fiat currency standard, the differences between the two will become apparent. Hu Yilin said that stablecoins "have been preventing the revolution from going deeper from the very beginning." This does not mean that stablecoins have no progressive significance, but rather that their progressive significance has been limited from the start within the old currency order.

What Is Left for Stablecoin Entrepreneurs When the Old System Takes the Field?

The uniqueness of Open USD lies in the fact that it is not a new coin launched by a single crypto startup team, but rather a coalition project involving payment companies, banks, technology platforms, asset management institutions, and public chain ecosystems. Open Standard officially emphasizes that it aims to give enterprises a higher level of participation in stablecoin reserve earnings, governance, and large-scale usage.

This is precisely where Hu Yilin believes Open USD has symbolic significance. In the past, a core narrative of dollar stablecoins was that traditional finance was too slow, too expensive, and too closed, so crypto companies needed to use blockchain to improve efficiency. But now, traditional finance and payment giants are beginning to organize their own stablecoin networks. The old system is no longer just a target for transformation but has directly become the initiator and governor of stablecoin infrastructure.

Hu Yilin believes this poses an irony for native stablecoin companies like Circle: if the mission of stablecoins is to serve the dollar system, be compatible with the banking system, and improve payment efficiency, then when institutions like Visa, Mastercard, Stripe, BlackRock, BNY, Google, and Coinbase jointly launch their own stablecoin networks, the original stablecoin entrepreneurs will find it difficult to claim they possess an irreplaceable revolutionary legitimacy.

He frames this issue as a series of probing questions: Who exactly are stablecoins supposed to revolutionize? SWIFT? What if interbank settlements also start using stablecoins? Visa and Alipay as payment networks? What if they themselves accept, issue, or participate in stablecoin networks?

In his view, if the goal of stablecoins is merely to get the old system to adopt blockchain payment technology, then when the old system adopts stablecoins, the stablecoin movement can declare success and even "retire with merit." But if these native stablecoin companies are still unwilling to be co-opted, they must redefine their fundamental differences from the old system.

"If you still feel unwilling, you must return to the path of decentralization, abandon compromise, and continue the revolution," Hu Yilin said.

The "drawing of boundaries" here does not necessarily have to take only one form. Hu Yilin does not require all projects to follow the Bitcoin route. They can insist on a currency standard, insist on decentralized governance, insist on anti-censorship, and also insist on self-custody, non-freezable, open protocols, and exit rights. But the key is that native crypto innovators must retain some truly "disobedient" aspect.

"Of course, the currency standard is the hardest core; emphasizing governance structures is also acceptable; emphasizing anti-censorship is also fine, but you must emphasize something that is deviant," he said.

This statement highlights the awkwardness of the stablecoin narrative: when a project builds all its selling points on compliance, efficiency, low cost, institutional friendliness, and compatibility with old finance, it is likely not to disrupt the old system but to be absorbed by the old system as a new department.

The Blockchain Upgrade Package of Dollar Hegemony

Hu Yilin agrees with a more macro judgment: the more successful dollar stablecoins are, it does not necessarily mean that cryptocurrencies are more successful; rather, it may indicate that the dollar system is more successful.

If global cross-border e-commerce, remittances, on-chain transactions, RWA, DeFi, and corporate settlements increasingly use dollar stablecoins, then what may be weakened are local banking systems, traditional cross-border payment networks, and some capital controls, but what remains strengthened are dollar pricing, US debt reserves, and the US regulatory framework.

Open USD is a concentrated embodiment of this trend. It uses blockchain as a new track for capital flow, but the measure of value remains the dollar, the underlying earnings still come from reserve assets, and the governance structure is jointly participated in by corporate alliances and financial institutions. It is not an anti-dollar financial revolution but more like a blockchain upgrade package for dollar hegemony.

This also explains why Hu Yilin believes that stablecoins are becoming the long-term adversaries of most native cryptocurrencies. The issue is not just that stablecoins are taking away the function of transaction mediums, but that they may reshape the foundational structure of the on-chain world.

If the pricing unit of on-chain finance is dollar stablecoins, the collateral assets are US debt and RWA, the source of earnings is traditional financial assets, and the users' value anchoring is also in dollars, then the more prosperous on-chain activities do not necessarily mean that ETH, SOL, or other native chain currencies will have monetary premiums. The on-chain world can thrive, but wealth is deposited in off-chain dollar assets, stablecoin issuers, and traditional financial earnings structures. In Hu Yilin's previous words, stablecoins break the logic that "the more prosperous the on-chain, the more the native currency appreciates," turning it into "the more prosperous the on-chain, the richer the off-chain."

"Selling Fuel" Is Fine, But Don't Reduce Civilization-Level Narratives to Transaction Fee Narratives

The issue of stablecoins has also led Hu Yilin to re-criticize Ethereum's "oil" narrative. Many Ethereum supporters believe that even if USDT, USDC, or Open USD are primarily used on-chain, transactions still require consuming ETH, DeFi activities will still generate transaction fees, and L2 still needs to settle to the mainnet, so ETH will still benefit from the prosperity of the on-chain.

Hu Yilin's rebuttal is: transaction fees certainly have value, but transaction fees are not the currency standard.

He continues the gas metaphor commonly used in the Ethereum community but pushes this metaphor in the opposite direction. "Gas prices will not be infinite because when gas prices become too expensive, people will have a stronger motivation to seek alternative energy sources," he said. Moreover, replacing Ethereum is much easier than replacing gasoline infrastructure. Changing cars from fuel to electric requires a new industrial chain and product design; but migrating a DeFi protocol from Ethereum to a compatible public chain has a much lower technical threshold.

In his view, if Ethereum relies solely on transaction fee income, it will encounter a valuation ceiling as an infrastructure service provider. Exchanges, clearinghouses, and payment networks can be important, but their revenue scale does not equate to the monetary premium of standard assets. Hu Yilin asks: How much does the Nasdaq exchange earn in transaction fees in a year? Do the net revenues of global securities exchanges add up to more than that of a single Apple company?

However, he does not believe that all public chains must bear the same revolutionary mission. Public chains like Solana originally do not have such grand ambitions; their positioning is closer to "being a strong competitor at the company level," such as becoming a high-performance alternative to Ethereum. Hu Yilin said that if a project "is originally positioned to sell fuel, then it can certainly accept that positioning." For such chains, transaction fees, performance, ecosystem, developer experience, and application migration capability are their core competitive indicators.

The problem is that not all crypto assets can be satisfied with "selling fuel." Hu Yilin distinguishes three types of projects: the first is Bitcoin, which has aimed for a monetary revolution since its inception; the second is Ethereum, which wants to be a "world computer," aiming to become a civilization-level innovation; the third is many emerging small coins, which do not have traditional capital backing and must rely on grand narratives to attract attention and trust.

Therefore, the real divergence is not whether all coins should talk about revolution, but rather: any project that seeks a higher ceiling cannot avoid the revolutionary narrative. You can only be a blockchain space service provider, you can only be a high-performance chain, you can only be a financial application platform, but if you claim you want to change the world, restructure civilization infrastructure, or become the next generation of currency or the next generation of the internet, then you cannot reduce your native currency narrative to transaction fee fuel.

The Copernican Moment of the Crypto Revolution: The Earth Can Move

In the history of astronomy, the key to the Copernican revolution is not just that the computational model is simpler, but that people accepted an intuitive fact: the Earth can move, and daily life does not collapse as a result.

Hu Yilin believes that the monetary revolution of blockchain and Bitcoin also has a similar ideological threshold. The true Copernican moment is not that stablecoins make cross-border transfers cheaper, nor that banks learn to use on-chain settlements, but that market participants begin to realize: economic life does not necessarily need a fixed central bank as the center of monetary order.

"The key is that people liberate their thoughts: the Earth can move, and my grounded life does not depend on the Earth being still," Hu Yilin said. Corresponding to monetary issues, the core concept is: "Our lives, normal market transactions, do not depend on a fixed central bank; we do not need the central bank to intervene at all times to maintain market stability. What constitutes money and how much that money is worth are all determined spontaneously by the market, by each specific decentralized transaction, without needing a specific institution to decree this."

This is also the fundamental reason he insists on a Bitcoin standard and criticizes a stablecoin standard. Stablecoins can improve efficiency, can serve as transitional tools, and can act as a bridge between the real world and the on-chain world. But if the on-chain world ultimately still values in dollars, is based on US debt as underlying assets, and uses central bank currency as the final measure of value, then the so-called "blockchain revolution" is merely an add-on to the dollar system.

The emergence of Open USD has made this debate clearer. It may be an important step toward the commercialization, institutionalization, and scaling of stablecoins; but from the perspective of the original ideals of cryptocurrencies, it may also mark a successful co-option of blockchain technology by the old system.

Hu Yilin does not deny the historical significance of stablecoins. But historical significance does not equate to the completion of a revolution. The Tycho system was once popular precisely because it could accommodate new technologies and old authorities; but what truly changes the world’s landscape is still the new paradigm that allows the Earth to move.

For the crypto world, the question is the same: if the dollar never moves, and the Federal Reserve is always at the center, then no matter how open and efficient stablecoins are, they are merely sophisticated instruments of the old universe. The true revolution will wait until the market believes that the monetary order can rotate without revolving around that center.