Leaders in the stablecoin industry discuss future development

In the rapidly evolving world of cryptocurrency and blockchain technology, stablecoins have undoubtedly become the focus of the industry. Recently, two well-known figures in the field—Sam Kazemian, the founder of Frax Finance, and Stani Kulechov, the founder of Aave—were interviewed to share their views and future outlook on the stablecoin industry.

The stablecoin market is booming

Sam Kazemian stated that stablecoins and artificial intelligence have become the two hottest fields in today's world. As the founder of a stablecoin protocol, he is excited that the industry is finally gaining widespread recognition. The evolution of Frax from an experimental "hybrid model" to a "regulated digital dollar" route that policymakers are willing to legislate support for is exhilarating.

Stani Kulechov emphasized the importance of stablecoins in regions of global financial turmoil. In Argentina, parts of Africa, and the Middle East, the financial stability offered by stablecoins is more attractive than local currencies. He believes that stablecoins are not only tools for "stability" but also bridges that make the benefits of DeFi understandable and accessible to mainstream users.

The Relationship Between Stablecoins and the US Dollar

Regarding whether stablecoins pose a threat to the global status of the US dollar, Sam Kazemian believes this is a misunderstanding. He views stablecoins as an "extension" of the dollar, a global extension of its influence. He points out that the development of stablecoins has gone through two stages: from purely market-driven decentralized algorithmic stablecoins to the current realism phase that has gained recognition from the US government.

Stani Kulechov believes that stablecoins actually expand global dollar trade. He predicts that in the next 2-3 years, stablecoins will become the largest asset class on-chain, and within 5-7 years, security tokens will surpass the total of stablecoins and crypto-native assets.

The Impact of the GENIUS Act

Sam Kazemian explained the revolutionary significance of the GENIUS Act. This Act allows non-chartered banks to issue M1 currency under strict regulations for the first time, breaking the traditional banks' monopoly on issuing M1 currency. He believes that this development has not yet been fully priced in by the market and may gradually be recognized in the future as more related news emerges.

Stani Kulechov emphasized the importance of a regulatory framework, calling for the GENIUS Act to establish clear, precise, yet inclusive rules to avoid excessive caution that hinders innovation.

Collaboration between Stablecoins

Both founders believe that there is no real competition among different stablecoins in the future, but rather a collaborative relationship will form. Stani Kulechov likens stablecoins to "payment channels" or "rails," allowing users to choose the most suitable stablecoin based on different scenarios. Sam Kazemian emphasizes that the digital dollar is a positive-sum game, and the total market capitalization of on-chain stablecoins currently only accounts for 1% of the global M1 market, indicating significant room for growth.

Future Outlook

Sam Kazemian revealed that Frax is transitioning from an "algorithmic stablecoin protocol" to a "digital dollar issuance + settlement network". They plan to implement the issuance of stablecoins, cross-chain settlement, and value transfer on the high-performance EVM chain, Fraxtal.

Stani Kulechov introduced Aave V4's "Unified Liquidity Architecture," which is designed to address the diversification of on-chain asset types and the elongation of risk curves in the future.

Finally, the two founders discussed the possibility of allowing Frax's stablecoin to directly participate in the Aave ecosystem, which would make "on-chain dollar yields" a real scenario.

With the continuous development and innovation of the stablecoin industry, we can expect to see more exciting changes and opportunities.