Policy-based cycle: The United States is reshaping its encrypted territory with regulatory policies

Written by: Jiayi

I firmly believe that this round of crypto cycles is driven by U.S. government policies.

Just last week, Trump signed an executive order on 401(k) retirement investment, allowing part of the retirement funds to be invested in private equity, real estate, and even digital assets. If we look back at the timeline: a few weeks ago, the GENIUS Act was officially passed, clearing the regulatory path for stablecoins; this month, the SEC also changed its attitude,高调喊出要做 "Crypto Everything". From stablecoins to DeFi, from on-chain identities to tokenized assets, almost every sector is being re-integrated into the U.S. regulatory system.

This is not a minor adjustment but a reorientation of the capital structure. The U.S. is doing one thing: incorporating Crypto into the U.S. dollar system as the next stage of financial growth engine.

Today, let's first discuss what the U.S. government intends to do, and which tracks crypto enthusiasts should pay more attention to and how to maximize benefits from them.

What exactly is the U.S. government planning?

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

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

At the same time, the SEC has quietly completed a shift in attitude. They launched "Project Crypto", whose goal is not to purge the industry but to "regulate" it using the existing legal framework. They are now willing to acknowledge that not all tokens are securities and are preparing to introduce uniform standards. They are also pushing forward a major initiative: bringing all on-chain trading platforms, stablecoins, DeFi, and RWA issuances into the registration framework. The core of this Crypto Everything plan is three things: 1. Unifying regulatory口径; 2. Accepting compliant funds; 3. Giving the on-chain world a "controllable role". It also means that in the future, you may see: legally licensed DeFi protocols, RWA issuance platforms that can publicly raise funds, and exchange wallet combinations that can connect to TradFi.

Therefore, what the U.S. government really wants is not for token prices to soar, but to make this on-chain system a productive tool that it can control. To allow the U.S. dollar to circulate on the chain, to allow securities to be issued on the chain, and to allow American-style finance to restructure a new round of global order. That's why I have always said: the main line of this cycle is not the self-evolution of Crypto, but the "digital asset absorption plan" personally designed by the U.S. federal government.

Policy implementation, market responds quickly

From the passage of the GENIUS Act to the signing of the 401(k) executive order today, BTC once surged to $123,000 in these few weeks, and ETH rose by as much as 54% for the whole month, approaching $4,000 at its peak.

Let's look at the macro level. In July, U.S. crypto spot ETFs attracted a total of $12.8 billion, setting a new historical high. Among them, Bitcoin-related products accounted for nearly half, about $6 billion; ETH ETF products were also strong, with $5.4 billion inflows in a single month. And BlackRock's Bitcoin trust IBIT rose to $86 billion in assets under management, even surpassing some S&P 500 component ETFs.

Traditional financial institutions are also frantically "buying on the chain". BlackRock's on-chain treasury bond fund BUIDL not only has assets under management rising 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 enter the crypto financial system as liquidity. JPMorgan also upgraded its payment chain Onyx to a new on-chain settlement system Kinexys, and joined hands with clearing giant Marex to conduct the first "7×24 real-time on-chain clearing". To put it simply, it has completely integrated things in the traditional financial system that used to take days to arrive and could not be moved on weekends into the chain.

Institutions are not "exploring"; they are really taking on-chain as a serious matter. You can continue to read KOLs' remarks, or see where the money has gone. This round of market is not driven by narratives, but after the policy direction is set, funds have actively found the direction of flow. Capital has begun to bet on targets that "can catch the policy".

Which tracks will be the first to receive policy dividends?

So, which tracks will this wave of policy dividends hit? Let's analyze slowly.

This wave of opportunities is not evenly distributed; it will be concentrated in a few directions. First, my personal judgment: stablecoins, on-chain financial infrastructure, and the compliance-driven ZK track will be the first to benefit, and other sectors will have different rhythms.

The direct beneficiaries of this wave of policy dividends: stablecoins

Stablecoins are the most direct winners in this wave of U.S. regulatory dividends. The GENIUS Act is equivalent to issuing a passport for U.S. dollar stablecoins: legal issuance, official recognition, and finally being able to enter the main road of the U.S. financial system in a justifiable way. So we also saw that the two sons of the Trump family entered the market in advance before the policy was implemented, launching USD1 through WLFI, seizing the first-mover position when the compliance era begins.

On the day the policy was implemented, JPMorgan announced the pilot issuance of JPMD deposit tokens (essentially a fractional reserve bank deposit stablecoin) on Coinbase's Base chain. Coinbase's own stablecoin USDC also grew rapidly driven by compliance benefits, adding $800 million in circulation in the recent week, and also took the opportunity to launch a crypto credit card endorsed by American Express, jointly with Shopify and Stripe to directly bring USDC payments into e-commerce cash registers.

The explosion in scale is just the appetizer. The real change is the expansion of the scope of use.

Settlement networks such as Visa and Mastercard have incorporated stablecoins into their global networks, using them for high-frequency payments, bypassing the slow and expensive fees of traditional card networks. In cross-border remittances, e-commerce, and in-game transactions, once compliant stablecoins enter, the improvement in efficiency is immediate. At the same time, the entry of "regular troops" also means a sharp increase in thresholds. Regulations stipulate that issuers must be regulated financial institution subsidiaries, licensed trust companies, etc., and must undergo security assessments by financial regulatory committees.

This almost directly blocks small innovators from the door, and the stablecoin market will move towards oligopoly faster. The confrontation between the three camps of Circle, Coinbase, and traditional banking systems will become more and more obvious. In addition, regulations prohibit paying interest to coin holders, so the positioning of stablecoins will return to payment and value storage itself, no longer having the illusion of ultra-high annual returns like algorithmic coins.

So how can ordinary users participate in this wave of dividends?

In fact, there are ways. For example, multiple compliant platforms already offer reasonable returns on USDC, with safer paths, strong liquidity, and more suitable for stable funds: Coinbase offers a USDC holding reward of about 4.1% APY. Binance has also recently launched a USDC flexible deposit product. In this promotion, each account can enjoy a maximum 12% APR on 100,000 USDC, and funds can be deposited and withdrawn at any time.

From an investment perspective, these returns are not low, and they are stable, safe, and liquid, which is much more practical than leaving funds in the exchange without taking action. Especially for cross-border users, depositing stablecoins not only earns interest but also avoids exchange rate fluctuations and the cumbersome nature of traditional channels.

To summarize my judgment: this round of policies is clearing the runway for stable, compliant stablecoins. In the short term, U.S. dollar stablecoins and their payment applications will see capital inflows; in the long term, they will become the cornerstone of on-chain finance and the core bridge for the digitization of fiat currencies.

Stablecoins as an entry point, accelerated development of on-chain basic economic facilities

The clarification of U.S. regulations is actually paving the way for the entire localized financial economy. The so-called "localization" fundamentally means that compliant public chains and protocols will carry more business from U.S. institutions, and traditional finance will more actively integrate into these on-chain underlying layers, using them as new infrastructure. This is the second track I value.

The most intuitive example is Base. Relying on Coinbase's compliance advantages and seamless connection with the exchange, it has successfully carried more and more on-chain businesses of U.S. institutions and enterprises, opening up multiple tracks such as payment, applications, and asset circulation. In this trend, I am optimistic about the ecological extension of the Base ecosystem. In addition to promoting tokenized securities itself, it also uses partners to fill in applications, such as working with Stripe to do on-chain stablecoin payments, making Base the hub of payment innovation; it also provides underlying settlement facilities for PayPal, JPMorgan, etc.

In the future, U.S. payment companies, banks, and brokers will obviously be more willing to choose such a local, communicable network that can be connected to immediately when problems arise, rather than using an overseas anonymous chain. Localization is actually a compliance moat.

Base itself does not issue tokens, and its traffic, value, and imagination are all realized through B3, the only bloodline channel. B3 is built on Base, and the founding team all come from Coinbase. B3 inherits the compliance system synchronization of Base and the advantages of the user economic entry point, which means that B3 has an unparalleled first-mover advantage in terms of U.S. dollar stablecoin payment, institutional settlement, and compliance narratives entering the North American market. This type of underlying infrastructure for on-chain finance, after opening up the closed loop of scenarization and personalization, will have great appeal to high-quality assets that want to go on-chain and operate efficiently on-chain for a long time. When Base ushered in a large-scale application explosion, B3 will become the first choice for these applications to be directly implemented and operated on a large scale, a true super application undertaking layer and on-chain economic entry point.

In addition, I know the B3 team quite well. They are very steady in their work. In addition to polishing products, they are also continuously expanding externally. I'll keep that a secret for now. What is certain is that after the announcement of the subsequent heavyweight cooperation, B3's position in the industry will be clearer.

Looking ahead, I don't think this is an isolated case. As regulations continue to improve, more traditional giants will follow the path of JPMorgan and Coinbase. Maybe in the future, we can see many major banks issuing on-chain bonds, insurance companies using on-chain to manage policies, and tech giants issuing corporate stablecoins for internal settlement... After all, every major client is a stable source of cash flow for on-chain infrastructure.

Of course, this will also raise requirements: performance must withstand massive transactions, privacy must protect corporate data, and compliance must have audits and risk controls built into the system. In short, this wave of U.S. policies is pushing on-chain infrastructure from the past "international wild growth" to "localized intensive cultivation". In this round of upgrading, local compliant chains and modular innovation networks will be the biggest beneficiaries.

ZK: New privacy infrastructure in the policy perspective

Which tracks that were once declared "dead" may usher in their second day? For example, ZK.

On August 13, the surge of OKB detonated Twitter and various communities. The token price once rose from 46 to nearly 120, almost tripling. This surge was not only due to OKX's one-time destruction of 65.25 million historically repurchased and reserved OKB, clearing some potential selling pressure from the past. The X Layer upgrade also superimposed structural changes on both the supply and demand sides. OKB became the only Gas Token for X Layer, with comprehensive diversion from wallets, exchanges, and payment scenarios.

Supply contraction + concentrated demand made the market instantly realize that the scarcity and use value of OKB were simultaneously amplified, thus leading to short-term暴击 due to capital rushing in and emotional resonance. Another trading variable is compliance expectations. The market has been paying attention to the dynamics of "OKX is preparing to go public in the U.S.", so it has expectations for its entry into the U.S. market. Of course, whether it can be realized depends on U.S. regulatory policies.

My attitude towards this sector is clear: don't Fomo, keep observing. ZK is likely to find its chance of revival in the era of compliance, or it may just be a short-term turnaround. But in any case, its trends are worth watching.

The latest U.S. digital asset report has stated that individuals should be allowed to conduct private transactions on public blockchains, and also encourages the use of self-custody and privacy-enhancing technologies to reduce the risk of on-chain data leakage. The White House's 2025 digital asset policy report also mentioned that ZK is a key path to balance privacy and compliance. This shift in attitude is interesting. In the past, privacy coins and mixers were on the "blacklist" in the eyes of regulators, but now decision-makers have instead admitted that to get more traditional funds on-chain, the短板 of "on-chain privacy" must be filled, and ZK is a ready-made solution.

On the enterprise application side. Google Wallet has launched a ZK age verification based on Succinct Labs: you can prove that you are over 18 years old without exposing any ID details. It sounds very Web2, both KYC compliant and privacy-protecting, but this time it's running on the chain.

The underlying Succinct has thus 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 accordingly.

I understand that the revival of ZK is not just an emotional rebound, but an inevitable demand in the era of compliance. After assets and transactions are moved on-chain, enterprises cannot accept all business details being exposed to competitors, and individuals are also unwilling to have their financial trajectories become transparent.

And the regulatory requirements are clear. What should be audited must be auditable, and what should be traceable must be traceable. This seemingly contradictory demand is exactly the stage for ZK: "Prove legality first, then hide details". For example, large-value interbank settlements can use ZK to verify that transactions comply with anti-money laundering regulations without disclosing who the customers are. Such scenarios will become more and more in the future: identity authentication, credit scoring... all may be reshaped by ZK. Many high-quality ZK projects have not yet issued tokens, but the policy window may urge them to speed up implementation.

In the last cycle, top ZK teams continued to raise funds, but many secondary market performances were "from top to bottom", hitting the popularity of the ZK track to a freezing point. In this round, is there a chance to reverse the impression that "ZK secondary market is doomed"?

I think we can pay attention to two types of targets: one is teams that have not yet issued tokens but have strong technical reserves and implementation capabilities; the other is projects that have issued tokens but have a healthy chip structure and solid business progress. For me, this sector is worth observing in the short term. Although it's not yet time to heavily invest without thinking, it's not impossible that a few winners will emerge.

Policy is set, a new pattern sets sail

As an investor who has been watching the track for a long time, I clearly know that once the regulatory uncertainty is resolved, the structural opportunities in the market will begin to rearrange. The clarity of this round of U.S. policies is actually changing the flow of funds and the order of the industry.

In the short term, the capital inflows and long sentiment brought by compliance benefits have made some sectors outperform the market. Stablecoin issuers, market capitalization tokenization, prices and trading volumes have given the market an intuitive feedback. This is just the first wave of capital testing. More importantly, it's the reshaping of the long-term pattern. When the rules are clear and the thresholds are clear, the truly valuable tracks will settle down. Conversely, those pseudo-concepts that are divorced from real needs and only piled up by speculative games will have less and less living space in a strong regulatory environment, and industry resources will flow to more meaningful directions.

I personally firmly believe that the real opportunity is to adapt to structural changes: in the short term, look at policies and capital flows to find the right entry points; in the long term, see which tracks can align with the future development of finance and technology. I regard this round as the "fourth stage moment of the Internet" for the crypto industry. Those who are interested can read my previous article on the development path of the web3 industry: back then, the Internet had rule establishment and technological changes, with short-term pains, but finally ushered in a larger and healthier ecosystem.

The current crypto industry is leaving the era of disorderly and wild growth and moving towards a mature stage with rules to follow. Whoever can seize the policy dividends to layout during this window will have a better chance to gain a firm position in the next stage of the landscape.

A new channel has been opened, and those who go with the wind will reach the future faster.

Disclaimer: The views in this article only represent the author's personal opinions and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness, originality, and timeliness of the article information, nor does it assume responsibility for any losses caused by the use or reliance on the article information.