Pioneers in the stablecoin field discuss industry prospects

In the context of the rapid development of cryptocurrency and blockchain technology, Sam Kazemian, the founder of Frax Finance, and Stani Kulechov, the founder of Aave, as leading figures in the stablecoin sector, shared their insights on the industry's development. They discussed the rapid growth of the stablecoin market, the innovation journey of projects, and their views on the upcoming regulatory changes, especially against the backdrop of stablecoins becoming the focus of the industry following the volatility in the cryptocurrency market in 2022.

Both founders expressed optimism about the current momentum in the stablecoin industry. Sam Kazemian stated that stablecoins and artificial intelligence have become the two hottest fields in today's world. He remarked that the transition of Frax from its initial experimental "hybrid model" to the now policy-maker-supported "regulated digital dollar" route is exhilarating. Stani Kulechov emphasized the important role of stablecoins in providing stability in regions of global financial turmoil, as well as their value in making DeFi yields easier to understand and use.

Regarding the impact of stablecoins on the global status of the US dollar, Sam believes that stablecoins are actually a global extension of the dollar's influence, rather than a threat. He points out that the revolutionary aspect of the GENIUS Act is that it allows stablecoins to have "legal tender status" for the first time. Stani, on the other hand, predicts that within the next 2-3 years, stablecoins will become the largest asset class on-chain, and within 5-7 years, security tokens may surpass the total of stablecoins and native crypto assets.

The two founders also discussed the significant changes that the GENIUS Act could bring. Sam explained that the Act would allow non-chartered banks to issue M1 currency under strict regulations for the first time, which could reshape the entire financial system. Stani emphasized the need to balance innovation and prudence when developing the regulatory framework.

Regarding the competition between future stablecoins, both founders believe it is a positive-sum game. They foresee that different stablecoins will coexist as payment channels or tracks, allowing users to choose the most suitable tool based on the scenario.

Sam revealed that Frax is transitioning from an "algorithmic stablecoin protocol" to a "digital dollar issuance + settlement network," while Stani introduced Aave V4's "unified liquidity architecture" design, aimed at addressing the future diversification of on-chain assets.

Finally, the two founders discussed potential collaboration opportunities, such as allowing frxUSD holders to directly earn on-chain yields through Aave, making the combination of "digital dollars + on-chain yields" a reality. This collaboration showcases the innovative potential and composability of the decentralized finance ecosystem.