Stablecoins in Suits: The Hidden Plumbing of the GENIUS Act, Dollar Payments and Fintech
Original Chinese title: 穩定幣穿上西裝之後：GENIUS Act、美元支付與金融科技的隱藏水管
The risks of stablecoins lie not only in whether their price equals one dollar, but in reserve assets, redemption pressure, the Treasury market, software governance and how platform power is institutionalised.
鄭淑禎
鄭淑禎 is a full-time assistant professor at Shih Chien University, with long-standing attention to commercial public policy, digital transformation, social innovation and technology governance.
Stablecoins in Suits: The Hidden Plumbing of the GENIUS Act, Dollar Payments and Fintech
The most successful marketing of stablecoins is to make people think they are just a digital version of dollars. On screen it shows 1.00, transfers are fast, cross-border payments are convenient, open twenty-four hours a day; it sounds like old-school finance finally learned not to close at three-thirty in the afternoon. The problem is that financial systems never become simpler just because their interface looks simple. Where stablecoins truly matter is not how steady that number appears, but whether the reserve assets, redemption arrangements, market-making mechanisms, custodian banks, software permissions and regulatory responsibilities behind them can hold up.
When stablecoins were still internal pass-through tools in crypto circles, many treated them as a subculture adventure: if something went wrong it was just market education. But once policy starts legislating, platforms start integrating, payment companies start connecting, merchants start talking about settlement, they are no longer just toys of the crypto community; they are moving toward public payment infrastructure. At that point using "market self-correction" as a cop-out is like saying next to high-speed rail tracks: cars will naturally know where problems lie if they go faster. Speed can be charming, but publicness is always more troublesome.
The GENIUS Act Puts Stablecoins in Suits and Brings the Problems into the Meeting Room
The importance of the US GENIUS Act lies not only in giving stablecoins a legal coat, but in formally pulling them into the financial governance meeting room. Reserve assets, redemption rules, disclosure obligations, regulatory responsibilities—issues that the industry has often glossed over with vague language—must now be institutionalised. This is certainly progress; at least it is more honest than "believing technology will self-repair". Yet institutionalisation does not mean risk disappears; it means risk begins to have clearer transmission paths. In other words, stablecoins move from an uncontrolled external system into a possible internal component tightly linked with mainstream finance.
This shift appears to increase security but also makes risk more systemic. As stablecoin scale grows, the large holdings of short-term US Treasuries, cash equivalents and custodian assets by issuers can affect other financial markets. Normally everything looks stable; once mass redemptions, platform accidents, cybersecurity issues or political risks hit, issuers may need to rapidly deploy liquidity, and pressure no longer stays on-chain. Put simply, what people thought was just another payment tool is likely the next generation of financial plumbing: usually hidden behind walls, but when it breaks you discover the whole building is connected.
The Real Risks Are in Infrastructure, Not Advertising Slogans
Many industry pitches list three advantages for stablecoins: fast, cheap, globally usable. These are not wrong; especially for cross-border commerce, migrant remittances, small merchant settlement and digital platform economies, if costs really fall and time shortens there is natural value. But once we talk about public applications we cannot stop at the pretty surface of user experience. Payment systems are not marketing lexicons; they are trust infrastructure. This means we must ask more troublesome questions: who holds admin permissions? who can freeze or restore assets? how are private keys managed? are cross-chain bridges secure? If a wallet service provider collapses, on-chain congestion occurs, smart contract vulnerabilities emerge or custodians fail, who do consumers turn to?
What makes these questions most annoying is that they usually hide in the deepest parts of product documentation and never appear on advertising boards. Traditional finance at least has a relatively clear responsibility path, though it may not be pleasant; stablecoins often mix "decentralised" with "compliant and controllable" narratives—on one hand emphasising free flow of globally programmable assets, on the other needing blacklists, freeze powers and regulatory compliance. This is not necessarily contradictory, but at least we should admit: they are not centreless, they have many layers of centres, and when each layer fails users can get lost in a maze of responsibility.
The Expansion of Dollar Payments Could Also Be a New Round of Power Redistribution
If stablecoins remain crypto speculation items their impact is relatively limited; once they enter payment infrastructure they involve monetary sovereignty and platform power. Especially dollar stablecoins, given the global heavy reliance on dollar settlement, naturally seep into cross-border e-commerce, platform revenue sharing, digital services and small remittances. For some users this may be convenient; for certain small economies and local financial systems it could become new dependency. Previously constrained by traditional banking networks, in the future they might instead depend on a few issuers, platform wallets and US regulatory rhythms.
This shift cannot simply be called financial innovation or financial colonialism; often both coexist. On one hand new tools can indeed improve efficiency; on the other efficiency gains frequently accompany concentration of governance power. This is the most paradoxical aspect of fintech: it always claims to de-intermediate, yet often just swaps intermediaries from counters to APIs, from bank staff to platforms and protocols. As payment infrastructure becomes more platformised society should ask more actively: do these platforms carry public responsibility? Or are they simply packaging infrastructure as products and offloading risk onto users?
Taiwan Does Not Have to Rush to Follow Suit but Cannot Pretend This Is Not Happening
For Taiwan the stablecoin issue often swings between two crude attitudes: one is seeing foreign legislation and enthusiastically shouting "opportunity has come", the other is treating any cryptocurrency as fraud. Neither is serious enough. Stablecoins can indeed improve cross-border payments, platform settlement and digital commerce, but they may also amplify money laundering, fraud, cybersecurity, consumer protection and foreign currency dependency risks. Real policy work is not about giving industry slogans or lazily sweeping complex problems into a risk black box; it is to take use cases one by one and unpack them.
For example migrant remittances, corporate cross-border settlement, game platform internal payments, e-commerce refunds, inter-bank clearing—each carries different risks. If regulatory sandboxes only let operators test transaction volumes without including stress tests, complaint processes, exit mechanisms, reserve audits and cybersecurity incident reporting, that is not regulatory innovation; it is just a higher-end product trial sale. Public policy must ensure innovation and responsibility are tested together, not let innovation run out first and then have society pay the bill.
Truly Mature Fintech Productises Responsibility Alongside Features
If stablecoins really want to move from speculative contexts into public infrastructure the key is not whether they are trendy enough but whether they are responsible enough. Users need not just speed and cheapness; they also require reserve disclosure, redemption commitments, security audits, permission governance, dispute handling and failure scenario explanations. These things are usually not sexy, but without them all innovation is just elegant risk packaging.
Put plainly fintech fears nothing more than pretending to be new while hiding old problems deeper. Stablecoins in suits mean they finally have to admit they are not rebellious teenagers; they are adults ready to enter public space. Since they must act as adults they cannot only talk about dreams and speed; they must also speak of responsibility, transparency and consequences. Otherwise they merely swap the appearance of dollars for a platform power interface and push social trust to its limits.
Do Not Reduce Financial Infrastructure to Interface Thinking Alone
There is another underestimated problem: the stablecoin industry too easily thinks of itself as software. The software world is used to rapid iteration, launch first then patch; but payment infrastructure cannot rely on users doing stress tests for you. When stablecoins start touching daily transactions, merchant settlement and cross-border salary flows they are no longer just product features; they become part of financial trust. In other words we cannot handle public payment logic with APP growth logic anymore. If issuers want to eat the market of financial infrastructure they must assume infrastructure-level transparency, audit and accountability.
Sources retained from the Chinese original
AI use and content-safety disclosure
This article was assisted by AI for data organisation, structural drafting and sentence polishing; human editors set the viewpoint and fact-checking direction