The Stablecoins and the Web3 Revolution: Reshape the Global Financial Landscape?

City of London 28 November 2025

Global finance in 2025 is undergoing a quiet power shift. On-chain stablecoin transfer volumes now rival Visa and PayPal, cross-border settlements have shrunk from days to seconds, and regulators are attempting to tame the decentralization wave with existing frameworks. We stand at a delicate historical juncture: the tension between technology's rapid advance and institutions' cautious response has never been greater.

The Chinese Association of Financial Executives in the UK (CAFE UK) recently hosted a seminar titled "Stablecoins and the Web3 Investment Revolution" at Shoosmiths' London headquarters, bringing together frontline practitioners from payments, law, and trading. More than a discussion of crypto technology, this was a deep inquiry into the restructuring of financial power, the migration of trust mechanisms, and the redefinition of value flows. The leap in stablecoin settlement speeds, the expansion of tokenized assets, and the maturation of institutional-grade infrastructure are driving a profound collision between decentralized and traditional finance, ushering in a new wave of industry transformation.

Opening: From a Cup of Coffee to the Restructuring of Financial Power

Ms. Wei Wu, Partner at Shoosmiths Corporate team—a British law firm with over 180 years of history—opened with a brief introduction to the firm's corporate and equity practice. Having witnessed financial evolution from the Victorian era to the digital age, Shoosmiths' have over 1500 lawyers, and its deep expertise in technology and financial services made it an ideal host for this discussion.

CAFE UK President Nick Ye joked in his welcome remarks that with recent market turbulence—AI stock pullbacks, Bitcoin's roller-coaster ride, and the latest UK Budget announcement—opening a coffee shop in the City of London might be a lower-risk venture than financial investing. He then explained the meaning behind the association's name, "CAFE": a tribute to the coffee houses that gave birth to the London Stock Exchange three hundred years ago, and a hope that this would be a place connecting ideas and gathering insights.

CAFE UK Associate Director Klaus Wang framed the discussion's underlying logic with three key questions: What exactly do stablecoins change? How should regulation draw boundaries between protection and innovation? How should institutions and individuals enter this space? Payments represent the first major use case where stablecoins have delivered the most tangible impact for ordinary users, but its impact extends far beyond technological iteration—it points to a redistribution of financial power structures. On the regulatory front, jurisdictions are competing at different speeds and orientations; rules not only define risk boundaries but also determine capital flows. Following this is a market restructuring from retail-driven to institution-led: profit models, liquidity sources, and participation thresholds are all being rewritten. Payments, regulation, and trading are indispensable: no matter how advanced the technology, without regulatory guidance, it struggles to take root; no matter how refined the regulation, without application scenarios, it cannot form a system; even with both, if investors lack clear pathways to participate, this revolution will struggle to reach the masses.

Cross-Border Payments: Not a Technical Problem, but "Borders" Created by Banks

So-called cross-border exists only because funds are locked within each country's banking system. Zhiyi You, Senior Director of Global Payment Strategy at Worldpay, captured stablecoins' fundamental disruption in one sentence: in the blockchain world, value transfer inherently has no borders. Stablecoins challenge not just payment efficiency but the traditional model of sovereign currency control over capital flows. Central Bank Digital Currencies (CBDCs) represent extensions of national sovereignty, commercial bank tokenized deposits are the digitization of traditional systems, while private stablecoins like USDT/USDC demonstrate true innovative power. The collapse of algorithmic stablecoins like Luna proved that "stability" without real asset backing is an illusion; but stablecoins backed by US Treasury reserves are demonstrating unique value in cross-border payments: no traditional bank intermediaries, pegged exchange rates, and instant on-chain settlement. Worldpay processes trillions of dollars annually, with stablecoin-related business continuously growing; through a partnership with BVNK, merchants can achieve stablecoin settlement without holding stablecoins themselves. What's driving this trend isn't technological optimism but structural vulnerabilities exposed in traditional systems: when bank accounts can be weaponized politically, decentralization becomes not just an ideology but a pragmatic alternative. Technology's value is never about being flashy—it's about providing a reliable Plan B at critical moments.

Regulation: Not an Obstacle, but a New Round of Global Competition

If Zhiyi painted technology's potential, then Shoosmiths Partner and Head of Payment Thomas Brown presented regulatory realities. He opened with data that sparked widespread discussion: the Bank of England proposes requiring systemic stablecoins to hold at least 40% of reserves in central bank accounts, with up to 60% invested in short-term UK gilts, plus holding limits for individuals (£20k) and businesses (£10m). This approach is extremely rare globally, driven not by technical judgment but by multiple considerations around systemic risk, monetary sovereignty, and payment stability. The UK intends to build a "regulable, scalable, cross-border" framework for stablecoins to compete for regulatory discourse in the new era. Talent and capital vote with their feet: markets with clearer rules and more stable expectations are more attractive, while Singapore and Hong Kong are accumulating advantages through policy stability. The global stablecoin regulatory landscape roughly divides into three camps: the EU's MiCA unifies rules across 27 countries, emphasizing coordination; the US GENIUS Act requires 100% reserves and prohibits yield-bearing stablecoins, but is implemented by a mix of federal and state regulation; Singapore and Hong Kong emphasize predictable, compliant, low-friction regulatory environments, attracting capital through pragmatism. Regulatory transparency is a magnet for institutional capital, but over-regulation creates barriers to entry; excellent regulation has never been about restriction but about dynamic balance between promoting innovation and preventing risk. For financial institution transformation, Thomas's advice cuts to the core: rather than shouting "embrace blockchain" slogans, first solidify regulatory communication, compliance foundations, and technical infrastructure. The JPMorgan and Coinbase partnership exemplifies combining scale advantages with technological speed.

Trading Paradigm: From "Hiring PMs" to "Renting Alpha"

Lingyi Kong, Partner at Blue Coast Capital, brought the perspective back to market microstructure. "Fee arbitrage used to be a money printer with annualized returns of 20-25%, but that's halved this year. Welcome to the era of institutional competition." As high-frequency giants enter, retail advantages rapidly dissipate, leaving institutions in zero-sum games. The deeper issue is that centralized exchanges' retail traffic growth has stagnated, new funds aren't continuously flowing in, and profits in this existing market are being constantly diluted. But her focus wasn't on the negative, rather, on the structural shift rapidly taking shape: the rise of platformized and modular trading ecosystems. Traditional hedge funds hire PMs, build systems, and launch strategies in cycles, often taking nine months, with high costs and concentrated risk. Now through SMAs (Separately Managed Accounts), institutions can directly "rent strategies": if performance is good, keep running; if not ideal, switch anytime, with no lock-up periods or sunk costs. This isn't just business model innovation but a restructuring of how talent value is assessed. Lingyi views each trader as an independent alpha source, with the core task being matching them to optimal monetization paths. Some naturally make money but lack systematization ability—no need to force it; airdrops, liquidity mining, and DeFi-native strategies can all be more effective approaches. As TradFi alpha decay accelerates and top institutions compete for short-cycle strategies, the crypto market is becoming a new battleground for "alpha refugees." Lingyi calls herself an alpha architect: identifying true alpha through recruiting and strategy consulting, then designing career paths—joining platforms, operating independently, or pivoting to VC are all possibilities, with each person's optimal solution being different.

Between Speed and Depth: The True Dividing Line of the Future

The three speakers' perspectives together outlined a fact: technological acceleration doesn't automatically bring synchronized institutional upgrades. From ChatGPT reaching 100 million users in two months to on-chain settlement measured in seconds, speed limits are constantly being rewritten, but institutions, trust, governance, and human nature still advance at their own pace. Regulators apply old frameworks to new technology, institutions waver between innovation and compliance, and investors weigh risk against return. Web3's disruptive power has never been about replacing traditional finance but forcing it to reinvent itself: if stablecoins can be faster and cheaper, why do cross-border transfers still take days? If DeFi demonstrates global 24/7 liquidity, why do exchanges still close on weekends? If blockchain enables real-time auditing, why do compliance costs remain so high?

Discussion Never Ends, Ideas Never Fade

The discussion continued heating up through high-density intellectual exchange, with industry leaders and innovators from payments, law, investment, trading, and entrepreneurship engaging in deep dialogue around stablecoins, regulation, capital flows, and institutional evolution. Exploration continued during the networking reception, from macro frameworks to specific implementation paths, as professionals from different backgrounds continued exchanging insights and gathering collective thinking about the next financial leap.

The atmosphere was open and enthusiastic. CAFE UK extends special thanks to Shoosmiths and Blue Coast Capital Partners for their sponsorship support, making this high-quality seminar possible. In the future, the association will continue connecting professionals across UK-China finance through professional events, gaining insight into cutting-edge trends, and promoting ongoing dialogue and evolution of industry thinking. Stay tuned.

As CAFE UK President Nick Ye noted, modern finance was born in London coffee houses three hundred years ago, and we may now be standing at the threshold of the next leap. This is neither a story of technology conquering institutions nor a narrative of institutions suppressing technology, but of both seeking new equilibrium through conflict, adaptation, and collaboration. Where is that equilibrium point? No one can give a definitive answer today. But at moments of epochal transformation, asking the right questions matters more than giving standard answers.