Policy-based cycle: The United States is reshaping the crypto landscape with regulatory policies

Written by: Jiayi

I firmly believe that this round of encryption cycle is promoted by the US government with policies.

Just last week, Trump signed an executive order on 401(k) pension investments, allowing some of his pension funds to be invested in private equity, real estate, and even digital assets. And let's pull the timeline forward: a few weeks ago, the GENIUS bill was officially passed, and the stablecoin regulatory route was opened; This month, the SEC also changed its attitude and shouted "Crypto Everything" in a high-profile manner. From stablecoins to DeFi, from on-chain identities to tokenized assets, almost every piece is being re-integrated into the U.S. regulatory system.

This is not a minor fix, but a reorientation of the capital structure. The United States is doing one thing: incorporating Crypto into the dollar system as the next stage of financial growth.

Let's start talking about what the U.S. government wants to do today. And which tracks we crypto enthusiasts should pay more attention to and how to maximize the benefits from them.

What is the U.S. government laying out?

The direction of this round of policy is neither "liberalizing transactions" nor "allowing speculation", but an institutional-level restructuring: using the US-led regulatory and financial framework to systematically integrate crypto assets into the US-led financial structure. This sounds abstract, but the context is very clear from the recent key actions.

A more critical step is the passage of the GENIUS Act, which is the first federal law in U.S. history to establish a "payment stablecoin". The U.S. government has personally defined the model of a "compliant dollar stablecoin" and opened the door to the financial system for it. This means that stablecoins are no longer gray patches on the chain, but financial instruments that can be incorporated into the monetary policy framework. There are treasury bonds behind stablecoins, which users use for cross-border payments, banks use them for liquidity allocation, and even enterprises can use them for bookkeeping. It is a real institutional authorization.

At the same time, the SEC has quietly completed its attitude shift. They launched "Project Crypto", the goal is not to eliminate the industry, but to "manage" it with the existing legal framework. They are now willing to admit that not all tokens are securities and are ready to introduce uniform standards. They are also promoting a major event: pulling all on-chain trading platforms, stablecoins, DeFi, and RWA issuance into the registration framework. The core of this Crypto Everything plan is three things: 1. Unify the regulatory caliber, 2. Catch compliant funds, and 3. Give the on-chain world a "controllable role". It also means that in the future, you may see: DeFi protocols that can be legally licensed, RWA issuance platforms that can raise funds publicly, and exchange wallets that can connect to TradFi.

So what the U.S. government really wants is not to fly in currency prices, but to make this on-chain system a productivity tool that it can control. Let the dollar circulate on the chain, let securities be issued on the chain, and let American-style finance reconstruct a new round of global order. This is why I have always said that the main line of this cycle is not the self-evolution of Crypto, but the "digital asset absorption plan" designed by the US federal government.

From

passage of the GENIUS bill to the signing of today's 401(k) executive order, BTC once rushed to $123,000 in the past few weeks, and ETH rose by as much as 54% throughout the month, reaching a high of nearly $4,000.

Let's look at the macro level. In July, crypto spot ETFs in the United States attracted a total of $12.8 billion, directly hitting a record high. Among them, Bitcoin-related products ate nearly half, about $6 billion; ETH's ETF products are also fierce, with $5.4 billion in inflows in a single month. BlackRock's Bitcoin trust IBIT has risen all the way to $86 billion under management, even surpassing some S&P 500 ETFs.

Traditional financial institutions are also frantically "taking over the chain". BlackRock's on-chain treasury bond fund BUIDL has not only increased its management scale to $2.9 billion, but mainstream exchanges such as Crypto.com and Deribit have also begun to accept it as collateral, indicating that it can already run into the crypto financial system as liquidity. JPMorgan Chase & Co. has also upgraded its payment chain Onyx to a new on-chain settlement system Kinexys, and asked liquidation giant Marex to do the first "7×24 real-time on-chain clearing". In other words, the things in the traditional financial system that originally arrived for a few days and could not be moved on weekends were completely connected to the chain.

Institutions are not "exploring", they are really doing business on the chain. You can continue to watch KOLs speak and see where the money has arrived. This round of market is not driven by narrative, but after the policy is set, funds take the initiative to find the direction of flow. Capital has begun to bet, and the target is to "catch the policy".

Which tracks are the first to catch policy dividends?

So let's slowly analyze which tracks this wave of policy dividends will hit.

This wave of opportunities is not evenly distributed, it will be concentrated in a few directions. Let me give you a personal judgment: stablecoins, on-chain financial infrastructure, and the compliance-driven ZK track will be the first to reap dividends, while other sectors have different rhythms.

direct beneficiary of this wave of policy dividends: Stablecoins

Stablecoins are the most direct winners of this wave of US regulatory dividends. The GENIUS Act is equivalent to issuing a passport to the US dollar stablecoin: the issuance is legal, the identity is justified, and finally it can legitimately enter the main road of the US financial system. So we also saw that the two sons of the Trump family entered the market before the policy was implemented, launching USD1 through WLFI, occupying the first position when the compliance era began.

On the day the policy was implemented, JPMorgan Chase & Co. officially announced the pilot issuance of JPMD deposit tokens (essentially partially reserved bank deposit stablecoins) on Coinbase's Base chain. Coinbase's own stablecoin USDC has also grown rapidly driven by good compliance, adding $800 million in circulation in the past week, and also launched a crypto credit card backed by American Express while it is hot, and joined hands with Shopify and Stripe to send USDC payments directly to the e-commerce checkout.

The explosion of scale is just an appetizer. The real change is: a widening of the range of use.

Settlement networks such as Visa and Mastercard have incorporated stablecoins into their global networks and used them for high-frequency payments, bypassing the slow and expensive charges of traditional card networks. For cross-border remittances, e-commerce, and in-game transactions, once compliant stablecoins are introduced, the efficiency improvement is immediate. At the same time, the entry of the "regular army" also means a steep rise in the threshold. Regulations stipulate that issuers must be subsidiaries of regulated financial institutions, licensed trust companies, etc., and must also undergo a security assessment by the Financial Supervisory Commission.

This almost directly keeps small innovators out, and the stablecoin market will move towards oligopoly faster, and the confrontation between the three camps of Circle, Coinbase, and traditional banking will become more and more obvious. Coupled with the regulatory prohibition of paying interest to coin holders, the positioning of stablecoins will return to payment and store of value itself, and there will no longer be the illusion of ultra-high annualized annualization of algorithm coins.

So how can you participate in this wave of dividends as an ordinary user?

In fact, there is also a path. For example, multiple compliant platforms have provided reasonable returns on USDC, with safer paths, stronger liquidity, and more suitable for stable funds: Coinbase offers USDC holding rewards of about 4.1% APY. Binance also recently launched its USDC flexible deposit product. In this promotion, you can enjoy up to 12% APR on 100,000 USDC per account, and funds can be withdrawn as you go.

From an investment point of view, these returns are not low, and they are stable, safe and liquid, which is far more real than putting them on the exchange without getting on the car. Especially as a cross-border user, depositing stablecoins not only earns interest rates, but also avoids exchange rate fluctuations and the cumbersome nature of traditional channels.

To sum up my judgment: this round of policy is to clear the runway for stable and compliant stablecoins. In the short term, US dollar stablecoins and their payment applications will usher in the entry of funds; In the long run, they will become the ballast stone of on-chain finance and the core bridge of fiat currency digitalization.

Stablecoins are used as an entrance, and the on-chain infrastructure is accelerating the development

of U.S. regulatory clarity, which is actually paving the way for the entire localized financial economy. The so-called "localization" basically means that compliant public chains and protocols will carry more business of American institutions, and traditional finance will also be more actively integrated into these chains and used as new infrastructure, which is also the second track I value.

The most intuitive example is Base, which relies on Coinbase's compliance advantages and seamless connection with exchanges to successfully carry the on-chain business of more and more U.S. institutions and enterprises, opening up multiple tracks such as payment, application, and asset circulation. Under this trend, I am optimistic about the ecological scalability of the Base system. In addition to promoting tokenized securities, it also uses partners to fill in applications, such as on-chain stablecoin payments with Stripe, making Base the center of payment innovation. It also provides underlying settlement facilities for PayPal, JPMorgan Chase, and others.

In the future, payment companies, banks, and brokerages in the United States will obviously prefer to choose this kind of local, communicable, and connected network as soon as possible if something goes wrong rather than using an overseas anonymous chain. Localization is actually a compliance moat.

Base itself does not issue coins, and its traffic, value, and imagination are all cashed out on B3, the only bloodline channel. B3 is built on Base, and the founding team is all from Coinbase. B3 inherits the advantages of Base's compliance system at the same frequency and user economic entrance, which also means that B3 has an unparalleled first-mover advantage whether it is US dollar stablecoin payments, institutional settlements, or compliance narratives entering the North American market. The underlying infrastructure of this type of on-chain finance, after opening up the closed loop of scenario-based and personalization, will be very attractive to high-quality assets that want to be on the chain and want to operate efficiently on the chain for a long time. When Base ushers in the explosion of large-scale applications, B3 will become the first choice for the direct implementation and large-scale operation of these applications, and a true super application undertaking layer and on-chain economic entrance.

In addition, I know the B3 team well, and I am very steady in doing things, in addition to polishing products, I am also continuing to expand externally. What is certain is that after the announcement of the heavyweight cooperation in the future, B3's position in the industry will be clearer.

Looking back, I don't think this is just an isolated case. As regulations continue to improve, more traditional giants will follow the path of JPMorgan Chase and Coinbase, and we may see many major banks issuing on-chain bonds, insurance companies using on-chain management policies, and technology giants launching corporate stablecoins for internal settlement...... After all, every major customer is a stable source of cash flow for on-chain infrastructure.

Of course, this will also raise the requirements: performance must withstand massive transactions, privacy must protect enterprise data, and compliance must be built into the system with audit and risk control. To put it simply, this wave of policies in the United States is pushing the on-chain infrastructure from the "international barbaric growth" in the past to "localized fine cultivation". In this round of upgrades, local compliance chains and modular innovation networks will be the biggest beneficiaries.

ZK: New Privacy Infrastructure from a Policy

PerspectiveWhich tracks have been declared "dead" may usher in their own next day? For example, ZK.

On August 13, OKB's surge detonated Twitter and various communities. The coin price rose from 46 to nearly 120 at one point, almost tripling. This wave of pull is not only due to OKX's one-time burning of 65.25 million historical repurchases and reserving OKB, clearing out some potential selling pressure in the past. The X Layer upgrade also superimposes structural changes on both sides of supply and demand, making OKB the only gas token on X Layer, with wallets, exchanges, and payment scenarios fully diverted.

contraction + demand concentration made the market instantly realize that the scarcity and use value of OKB were amplified at the same time, so there was a short-term critical hit of capital rush and emotional resonance. Another transaction variable is compliance expectations. The market has been paying attention to the dynamics of "OKX is preparing to go public in the United States", so there is room for imagination about its opening of the US market, of course, whether it can be implemented depends on US regulatory policies.

My attitude towards this section is clear: no FOMO, stay observant. ZK is likely to find its own resurrection in the compliance era, or it may only be a brief turnaround. But in any case, its movements are worth keeping an eye on.

The latest U.S. digital asset report has stated that individuals should be allowed to conduct private transactions on public blockchains, and the use of self-custody and privacy-enhancing technologies is also encouraged to reduce the risk of on-chain data leakage. The White House's 2025 Digital Asset Policy Report also mentions ZK as a critical path to balancing privacy and compliance. This change in attitude is very interesting, in the past, privacy coins and coin mixers were the "blacklist" in the eyes of regulators, but now the decision-makers admit that if they want more traditional funds to be put on the chain, they must make up for the shortcomings of "on-chain privacy", and ZK is a ready-made solution.

On the enterprise-level application side. Google Wallet has launched a ZK age verification based on Succinct Labs: you can prove that you are at least 18 years old without revealing any ID details. Sounds like Web2, both KYC compliant and privacy-preserving, but this time it's running on-chain.

Succinct, which is behind it, has also been pushed to the forefront, and the token $PROVE has performed well compared to other recent projects after its launch, outperforming many altcoins in the recent market. This case illustrates one thing: when top technology companies and real business scenarios start using ZK, the market's patience will return.

I understand that the revival of ZK is not just a rebound in sentiment but an inevitable necessity in the era of compliance. Once assets and transactions are put on-chain, companies cannot accept that all business details are disclosed to competitors, and individuals do not want their financial trajectories to become transparent.

The regulatory requirements are very clear. What should be audited should be able to be reviewed, and what should be traced should be able to be checked. This seemingly contradictory demand happens to be the stage of ZK: "prove legitimacy first, then hide details." For example, for large interbank settlements, ZK can be used to verify that the transaction complies with anti-money laundering regulations, but it does not disclose who the customer is. There will be more and more such scenarios in the future: identity authentication, credit scores, ...... It is possible to be reshaped by ZK. Many high-quality ZK projects have not yet issued coins, but the policy window may urge them to speed up their implementation.

In the last cycle, the top ZK teams continued to raise funds, but many secondary performances were "from the king to the heavens", which pushed the popularity of the ZK track to a freezing point. Is there a chance to reverse this impression that "ZK will die at level 2"?

I think we can pay attention to two types of targets, one is the team that has not yet issued coins, technical reserves and landing capabilities online; the other is projects that have already issued coins but have a healthy chip structure and real business. For me, this sector is worth observing in the short term, although it is not yet to the extent that it can be brainless to take heavy positions, but it is not ruled out that there will be a few winners who come out of the trend.

The policy is final, and the new pattern sets sail

As an investor who has been watching the track for a long time, I know very well: once the regulatory boots land, the structural opportunities in the market will begin to rearrange. The clarity of this round of US policy is really changing the flow of funds and the order of the industry.

In the short term, the capital inflow and long sentiment brought about by compliance have made some sectors outperform the market, and stablecoin issuers, market capitalization tokenization, price and trading volume have given the market very intuitive feedback. This is only the first wave of funds. More importantly, it is the reshaping of the long-term pattern. When the rules are clear and the threshold is clear, the truly valuable track will precipitate. In turn, those pseudo-concepts that are separated from physical needs and only rely on speculative games will have less and less room to survive in a strong regulatory environment, and the resources of the industry will flow in a more meaningful direction.

I personally firmly believe that the real opportunity is to adapt to structural changes: look at policies and capital flows in the short term, and find a point to follow the trend; In the long run, let's see which tracks can be at the same frequency as the future financial and technological development. I see this round as the "fourth stage of the Internet" in the crypto industry, and if you are interested, you can read my previous article on the development path of the web3 industry: At that time, the Internet had rule established, technological changes, and short-term pains, but in the end, it ushered in a larger and healthier ecosystem.

The current crypto industry is bidding farewell to the barbaric era of disorderly growth and moving towards a mature period with rules to follow. Whoever can seize the policy dividend to lay out during this window period will have a better chance of gaining a firm position in the next stage of the map.

The new waterway has been rolled out, and those who go with the wind will reach the future faster.