Exclusive | Gary Liu and Liu Xiaochun on what role stablecoins could play in China and the US | South China Morning Post

VirtualRichDream · 2026-03-24T22:19:23+00:00

The essay discusses the significance of stablecoins in the cryptocurrency market, emphasizing their essential role in facilitating transactions and derivative trading. Industry experts from China and the U.S. reflect on the strategic implications and future applications of stablecoins.

VirtualRichDream

2026-03-24 22:19:23

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Welcome to Open Dialogue_, a series from the South China Morning Post where we bring together leading voices to discuss the stories and subjects occupying international headlines._

In this edition, we invited a prominent industry player and economist to reflect on the role of stablecoins, cryptocurrencies pegged to fiat currencies or other assets. They discuss the differing approaches of China and the United States, as well as Hong Kong’s role in China’s strategy, as the city is expected to issue its first batch of stablecoin licences.

Gary Liu is the co-founder and CEO of Terminal 3, an advanced cryptography company with a focus on data privacy and security. Liu is a former CEO of the South China Morning Post and the chair of Web3 Harbour, an industry association promoting the decentralised internet and digital asset economy across Asia.

Professor Liu Xiaochun currently serves as an adjunct professor at the Shanghai Advanced Institute of Finance (SAIF) of Shanghai Jiao Tong University. He also holds the positions of vice-president of the China Academy of Financial Research at Shanghai Jiao Tong University and vice-president of the Shanghai Finance Institute.

Stablecoins have become one of the fastest growing cryptocurrencies around the world. What kind of role do stablecoins have and how will they be applied in the future? Some hold the view that this has huge potential beyond payments with strategic importance, others think otherwise. What is your take?

Gary Liu: Stablecoins today are almost exclusively used for plumbing in crypto and digital asset finance. In particular, any transaction that happens needs to be paired with some other asset, and that other asset is stablecoins – which accounts for 90 per cent of stablecoin use. Volume is tied to plumbing, which makes decentralised asset finance work.

The reason for that is because, right now, the killer use case for blockchain is derivative trading. It is the ability to compose different assets that are tradeable on blockchains, create the derivative products and have everything settled. Universally, stablecoins are a necessary anchor for every trade. That is why we call it plumbing.

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