Stepping into the Stablecoin Craze After Six Years, He Sees the Shape of the Future of Payments

Original Title: Stepping into the Stablecoin Craze for Six Years, He Sees the Embryo of the Future of Payments

Original Author: Sleepy.txt, 动察 Beating

This year is destined to be recorded in financial history as the "Year of the Stablecoin," so the current excitement may just be the tip of the iceberg. Beneath the surface lies a six-year undercurrent.

In 2019, when Facebook's stablecoin project Libra startled the traditional financial world like a depth charge, Raj Parekh was at the center of the storm at Visa.

As the head of Visa's cryptocurrency division, Raj witnessed this traditional financial giant's mental shift from hesitation to participation, a moment of non-consensus.

At that time, the arrogance of traditional finance coexisted with the nascency of blockchain. Raj's experience at Visa painfully exposed him to the industry's invisible ceiling. It wasn't that financial institutions were unwilling to innovate, but rather that the infrastructure at the time simply could not support "global payments."

Carrying this pain point, he founded Portal Finance, aiming to build better middleware for cryptocurrency payments. However, after serving a large number of clients, he found that no matter how optimized the application layer was, the performance bottleneck at the base remained the ceiling.

Ultimately, the Portal team was acquired by the Monad Foundation, with Raj at the helm of the payment ecosystem. In our view, he is not only the perfect candidate to review the business logic of the stablecoin application layer but also deeply understands the underlying aspects of cryptocurrency payments. No one is more suitable than him to replay this efficiency experiment.

Recently, we chatted with Raj about the development process of stablecoins in recent years. We need to clarify what is driving the current stablecoin craze, whether it is the feasible boundaries set by regulations, the giants finally willing to enter the field, or the more realistic ledger of profit and efficiency.

More importantly, a new industry consensus is emerging—stablecoins are not just assets in the crypto world but may become the infrastructure for the next generation of settlement and fund transfer.

However, questions arise: how long will this excitement last? Which narratives will be debunked, and which will settle into long-term structures? Raj's perspective is valuable because he is not just a bystander but has always been in the midst of the action.

In Raj's narrative, he refers to the development of stablecoins as the currency's "email moment," a future where fund transfers are as cheap and instant as sending messages. But he also candidly admits that he hasn't fully figured out what this will bring about.

Below is Raj's self-narrative, edited and published after careful consideration by Beating:

Problem First, Not Technology First

If I had to pinpoint the beginning of all this, I think it was 2019.

Back then, I was at Visa, and the atmosphere in the entire financial industry was very delicate. Facebook suddenly launched the Libra stablecoin project. Before that, most traditional financial institutions saw cryptocurrency as either a geeky toy or a speculative tool. But Libra was different; it made everyone realize that if they didn't join this game, they might lose their spot in the future.

Visa was among the first publicly named members of the Libra project partners. Libra was very special at the time; it was an early, large-scale, and very ambitious attempt that brought together many different companies for the first time around the topic of blockchain and crypto. Although the final outcome did not land as everyone initially expected, it was indeed a very significant watershed event that made many traditional institutions truly take crypto seriously as a topic that needed attention, rather than a fringe experiment.

Of course, massive regulatory pressure followed, and later in October 2019, companies like Visa, Mastercard, and Stripe withdrew.

However, after the Libra event, not only Visa but also Mastercard and other Libra members began to formalize their crypto teams more systematically. On the one hand, this was to better manage partners and the relationship network, and on the other hand, it was also to truly develop products and elevate it into a more comprehensive strategy.

My career actually started at the intersection of network security and payments. In the first half of my time at Visa, I was mainly building a security platform to help banks understand and address data breaches, exploits, and hacker attacks, focusing on risk management. It was during this process that I started to look at blockchain from a payment and fintech perspective, always seeing it as an open-source payment system. The most astonishing thing was that I had never seen a technology that could make value circulate globally 24/7 at such a high speed.

At the same time, I also clearly saw that Visa's infrastructure still relied on the banking system, on Mainframes, wire transfers, and other relatively old tech stacks. For me, the open-source system that could similarly "move value" was very appealing. At that time, my intuition was simple: the infrastructure on which future systems like Visa relied would likely be gradually rewritten by blockchain-based systems.

After the formation of the Visa Crypto team, we did not rush to promote the technology. This team is a group of some of the smartest and most hands-on builders I've ever met. They understand both traditional finance and the traditional payment system, and they have a deep respect and understanding of the crypto ecosystem. At its core, the crypto world has a strong "community attribute," and if you want to accomplish things here, it's hard not to understand and integrate into it.

Ultimately, Visa is a payment network, and we must focus a lot of energy on how to empower our partners, such as payment service providers, banks, fintech companies, and what efficiency issues exist in our cross-border settlement process.

So our approach is not to first push a particular technology to Visa, but rather to lean more towards first identifying the real problems within Visa and then see if blockchain can solve some of them.

If we look at the settlement chain, a very intuitive problem arises: since fund transfers are T+1, T+2, why can't we achieve "real-time settlement"? If real-time settlement is possible, what can it bring to the treasury and finance teams? For example, if a bank closes at 5 p.m., what if the treasury team could also initiate settlements at night? Or for example, originally there is no settlement over the weekend, but what if settlement is possible seven days a week?

This is why Visa later pivoted to USDC. We decided to treat it as a new settlement mechanism within the Visa system, truly integrated into the existing Visa systems. Many people may not understand why Visa was conducting settlement testing on Ethereum. In 2020 and 2021, that sounded very crazy.

For example, Crypto.com is a major client of Visa. In the traditional settlement process, Crypto.com has to sell their crypto assets every day, convert them to fiat currency, and then wire them to Visa via SWIFT or ACH. This process is very painful, starting with the time aspect—SWIFT is not real-time, and there is a T+2 or even longer delay. To ensure settlement without default, Crypto.com must hold a significant amount of collateral in the bank, known as "pre-funding."

This money could have been used to earn revenue through the business, but now it lies dormant in the account just to cope with that slow settlement cycle. We thought, since Crypto.com's business is built on USDC, why not settle directly with USDC?

So we approached Anchorage Digital, a federally chartered digital asset bank. We initiated the first test transaction on Ethereum. When that USDC moved from Crypto.com's address to Visa's address at Anchorage and settled finally within seconds, the feeling was truly amazing.

Infrastructure Fragility

My experience with Visa's stablecoin settlement has painfully made me realize one thing: the industry's infrastructure is just too immature.

I've always seen payments and fund flows as a "completely abstracted experience." For example, when you go to a coffee shop to buy coffee, the user simply swipes their card, completes the transaction, and receives the coffee; the merchant gets the money, it's that simple. Users are unaware of how many underlying steps take place: communicating with your bank, interacting with the network, transaction confirmation, settlement completion... all of this should be completely hidden and invisible to the user.

So I view blockchain in the same way; it is indeed a great settlement technology, but ultimately, it should be abstracted away through infrastructure and application layer services, allowing users to not have to understand the chain's complexity. That's why I decided to leave Visa and start Portal, to create a developer-facing platform where any Fintech company can integrate stablecoin payments as easily as they would with an API.

Truth be told, I never envisioned Portal being acquired. For me, it was more of a sense of mission, as I see "building an open-source payment system" as my life's work. At the time, I felt that if I could make on-chain transactions more user-friendly and truly bring open-source systems into everyday scenarios, even if playing a very small role, it would still be a huge opportunity.

Our customers range from traditional remittance giant WorldRemit to many emerging Neobanks. But as our business deepened, we found ourselves in a loop.

One might ask, why choose to build infrastructure at that time instead of developing applications, especially when many now complain that "there is too much infrastructure built, and not enough applications." I think this actually stems from a cyclical issue. Generally, better infrastructure comes first, which then fosters new applications; as new applications emerge, they in turn drive the next round of new infrastructure. This is the cycle of "application to infrastructure."

Back then, we saw that the infrastructure layer was not mature enough, so I felt that starting from infrastructure was more logical. Our goal was to run two parallel tracks: on one hand, collaborate with large applications that already have distribution, ecosystem, and transaction volume, and on the other hand, make it very easy for early-stage companies and developers to get started.

In pursuit of performance, Portal has supported various chains such as Solana, Polygon, and Tron. But after all is said and done, we always come back to the same conclusion: the network effect of the EVM (Ethereum Virtual Machine) is too strong; developers are here, and so is the liquidity.

This poses a paradox: the EVM ecosystem is the strongest, but it is too slow and expensive; while other chains are faster, their ecosystem is fragmented. At that time, we were thinking, what if one day, a system could emerge that is not only compatible with the EVM standard, but also capable of high performance and sub-second finality, that would be the ultimate answer to payments. So in July this year, we accepted the acquisition of Portal by the Monad Foundation, and I also started overseeing the payment business at Monad.

Many people ask me, isn't the public chain already oversaturated now? Why do we need a new chain? Perhaps this question itself is wrong, it's not "why do we need a new chain," but "have existing chains really solved the core problem of payments?"

If you ask those who are truly engaged in large-scale fund transfers, they will tell you that what they care most about is not how new a chain is or how well the story is told, but whether the unit economic model makes sense. What is the cost of each transaction? Can the confirmation time meet business needs? Is there enough liquidity between different forex corridors? These are very practical issues.

For example, sub-second finality may sound like a technical metric, but behind it lies real money. If a payment needs to wait 15 minutes to confirm, then it is commercially unusable. But just having this is not enough, you also need to build a large ecosystem around the payment system, stablecoin issuers, on/off ramps, market makers, liquidity providers, all these roles are indispensable.

I often use a metaphor; we are now in the era of currency email. Do you remember the scene when Email just appeared? It not only made letter writing faster, it allowed information to be transmitted to the other side of the earth in seconds, thereby fundamentally changing the way humans communicate.

I see stablecoins and blockchain in the same way; this is an unprecedented ability in the history of human civilization to move value at internet speed. We haven't even fully figured out what it will bring forth; it may mean a reshaping of global supply chain finance, it may mean the cost of remittances going to zero.

But the most crucial next step is how this technology is seamlessly integrated into YouTube, integrated into every daily app on your phone. When users can't feel the presence of blockchain but are enjoying the flow of funds at internet speed, that's when we truly begin.

Accruing Interest in Circulation, the Evolution of the Stablecoin Business Model

In July of this year, the United States signed the GENIUS Act, and the industry landscape is undergoing subtle changes. Some sort of moat advantage once established by Circle is starting to fade, and the fundamental driver behind this is the fundamental shift in the business model.

In the past, early stablecoin issuers like Tether and Circle had a very simple and direct business logic: users deposit money, the issuer uses that money to buy US Treasury bonds, and all the interest generated belongs to the issuer. That was the first phase of the game rules.

Now, if you look at new projects like Paxos up to M0, you'll see that the game rules have changed. These new players are starting to directly pass on the interest income generated by the underlying assets to users and recipients. This is not just an adjustment in profit distribution; I believe it actually creates a new financial lingua franca we've never seen before—a new form of currency supply.

In the traditional financial world, money in a bank only earns interest when the deposit is idle. Once you start transferring or making payments, that money usually doesn't earn interest as it moves through circulation.

However, stablecoins have broken this limitation. Even as funds circulate, are used for payments, or engaged in high-speed transactions, the underlying assets continue to generate interest. This has opened up a whole new possibility where funds not only earn interest when idle but also while in circulation.

Of course, we are still in the very early experimental stage of this new model. I've also seen some teams attempting more aggressive approaches, conducting large-scale US Treasury management behind the scenes and even planning to pass 100% of the interest on to users. You might ask, how do they make money? Their logic is to rely on other value-added products and services built around stablecoins to profit, rather than relying on interest rate differentials.

So, even though we are only at the beginning, the trend has become very clear post-GENIUS Act: every major bank, every major fintech company is seriously considering how to join this game. The future business model of stablecoins will not stop at simple deposit and interest collection.

Aside from stablecoins, crypto neobanks have also received significant attention this year. Combining my experience in past payment-related ventures, I believe there is one fundamental difference between traditional fintech and crypto fintech.

First-generation fintech companies like Brazil's Nubank or the US's Chime were essentially built on top of their respective local banking infrastructures. They relied on the local banking system. This led to an inevitable outcome where their services were tightly constrained, mainly serving local users.

But when you build products based on stablecoins and blockchain, the situation changes entirely.

You are actually building products on a global payment rail, something we've never seen in financial history. The change this brings is disruptive; you no longer need to build a fintech company for a single country. From day one, you can build a globalized crypto bank serving users from multiple countries, even globally.

This is what I see as the biggest unlock in the entire history of fintech, we have almost never seen this level of global-first from day one in the history of the arena. This pattern is giving rise to a new generation of founders, builders, and products who are no longer limited by geographical boundaries, targeting the global market from the first line of code written.

The Future of Agent Payments and High-Frequency Finance

If you ask me what excites me the most in the next three to five years, it is definitely the combination of AI Agents (Agentic Payments) and High-Frequency Finance.

A few weeks ago, we held a hackathon in San Francisco with the theme of combining AI with cryptocurrency. A large number of developers emerged on the scene, such as a project that integrated the U.S. food delivery platform DoorDash with on-chain payments. We are already starting to see this trend where Agents are no longer limited by human processing speed.

In high-throughput systems, Agents move funds and complete transactions at speeds that may be too fast for the human brain to understand in real time. This is not just a matter of being faster, but a fundamental shift in workflow: we are upgrading from "human efficiency" to "algorithmic efficiency," ultimately progressing towards "Agent efficiency." To support this leap in efficiency from milliseconds to microseconds, the underlying blockchain performance must be robust enough.

At the same time, the form of users' accounts is also undergoing convergence. In the past, your investment account and payment account were separate, but now this boundary is becoming blurred.

This is actually a natural product choice and is also what giants like Coinbase want most to do. They hope to become your "Everything App," where you can save money, buy coins, buy stocks, and even participate in prediction markets, all within the same account. This way, they can firmly lock users into their ecosystem, not handing over deposit and transaction data.

This is also why infrastructure remains crucial. Because only by truly abstracting those underlying components of crypto can DeFi transactions, payments, yield farming, and other activities be stacked into a unified experience, with users hardly feeling the complexity behind the scenes.

Some of my colleagues have a strong background in high-frequency trading, accustomed to conducting large-scale trades with ultra-low-latency systems on the CME or stock trading platforms. But what excites me is not to continue trading, but to migrate this rigorous engineering capability and algorithm-driven decision-making process into real-world daily financial workflows.

Imagine a corporate treasurer managing cross-border funds who needs to deal with a large sum of money spread across different banks involving multiple forex pairs. In the past, this required a lot of manual scheduling, but in the future, with the help of LLM in conjunction with a high-performance public chain, the system can automatically conduct scalable algorithmic trading and fund scheduling in the background, enabling the entire fund management operation to earn more revenue.

Abstracting the ability of "high-frequency trading" and migrating it to more diverse real-world workflows. This is no longer the exclusive domain of Wall Street but rather allowing algorithms to operate at extremely high speeds and scales to optimize every penny of the enterprise, which is the truly anticipated new category of the future.

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