Many people following the stablecoin sector were probably wondering last week why two alliances suddenly emerged in the market: stablecoins versus tokenized deposits. On one side are traditional payment giants like Stripe, Coinbase, Visa, and Mastercard, who are close to launching a new stablecoin platform. Stripe has acquired Bridge, Mastercard has bought BVNK, and Coinbase is the largest distribution channel for USDC, owns the Base network, and has also launched payment services. On the other side are major US banks like JPMorgan Chase, Bank of America, Citi, and Wells Fargo, who plan to launch a nationwide tokenized deposit network through The Clearing House, aiming for a launch in the first half of 2027. This network will represent bank deposits on-chain, providing 24/7 settlement, corporate treasury, liquidity management, and cross-border payments. The catalyst for this alliance is, of course, related to regulation, as the Clarity Act has begun to clarify previously blurred boundaries of interests. Stablecoins used to be able to package themselves with a grand narrative: faster USD payments, cheaper cross-border payments, a more open financial network, and better on-chain liquidity. But as stablecoins truly enter mainstream finance, the questions become concrete: Can stablecoin balances generate returns? If issuers don't pay interest, can wallets, exchanges, merchants, and membership programs offer rewards? If they can't pay interest like bank deposits, does transaction-based rewards circumvent regulation? The CLARITY Act, pushed forward by the Senate Banking Committee, brings this contradiction to the forefront. According to relevant legal analysis, the bill allows bond-based activity-based or transaction-based rewards, but only if these rewards are not economically equivalent to bank deposit interest. It also requires the SEC, CFTC, and Treasury to continue delineating the boundaries between prohibited interest-like returns and permitted transaction-based rewards within a year. This line, seemingly highly technical, actually determines the profit pool of the entire stablecoin market. If stablecoins can only serve as payment tools, banks can accept them as a new rail, and even participate in settlements themselves. If stablecoins can be transformed into a high-interest checking account through rewards, rebates, merchant incentives, and membership benefits, then banks aren't competing with crypto companies for transaction fees, but rather protecting their deposit franchises. For banks, deposits aren't just a product; they're the foundation of all products. Credit cards, mortgages, loans, wealth management, corporate treasury, foreign exchange, and cash management all stem from account relationships. Therefore, large banks must step forward.The way major banks have stepped forward is interesting. Instead of directly announcing a joint launch of a USDC competitor, they've chosen tokenized deposits. This choice itself is political rhetoric. The discourse on stablecoins rests with cryptocurrencies, while the discourse on tokenized deposits rests with banks. The former speaks of an open dollar, the latter of regulated bank money. The former emphasizes programmability and global liquidity, the latter emphasizes balance sheets, deposit attributes, and regulatory acceptability. Banks aren't ignorant of stablecoins; they simply need to reinterpret the issues they raise into a more familiar and controllable institutional language. JPMorgan's position here is particularly delicate. JPMorgan didn't just realize the value of on-chain dollars today; it has been operating for years through Kinexys and JPM Coin. But if JPMorgan were to declare that its network would be the future standard for on-chain deposits in the banking industry, Bank of America, Citi, and Wells Fargo would find it difficult to genuinely support it. Major US banks certainly share common interests, but common interests don't equate to a willingness to accept a single bank as the de facto standard setter for clearing. The Federal Reserve will not allow the US banking system to return to the fragmented state of decades ago, hence its emphasis on interoperability over the past year. Therefore, forming an alliance through The Clearing House is more politically important than technically. The Clearing House is inherently a clearing infrastructure shared by the banking industry. Placing a tokenized deposit network there essentially packages JPMorgan's "first-mover advantage" as a "common defensive line for the banking industry." This isn't the optimal technical solution, but rather the optimal solution for alliance governance. So, on the surface, this appears to be a demarcation between the stablecoin and banking camps. However, the more I think about it over the weekend, the more I feel this isn't a battle for supremacy. In the Chu-Han Contention, only Liu Bang and Xiang Yu ultimately prevailed, but in the stablecoin arena, no two individuals can represent all interests. Visa and Mastercard are caught between two camps, unable to function without banks yet fearing being bypassed by the next-generation settlement layer. Stripe and Coinbase appear to be in the same camp of open stablecoins, but one aims to capture money movement from businesses and merchants, while the other seeks to control wallets, liquidity, and on-chain execution layers. Coinbase and Circle are not equal allies either; Coinbase has consistently held a stronger position in the distribution and revenue sharing of USDC. JPMorgan already possesses its own on-chain deposit infrastructure, yet it has had to rely on other major banks to package its first-mover advantage as a common standard in the banking industry.Looking further outward, Tether's ambitions lie not in the Central Plains (the US domestic compliant market), and chains like Ethereum, Solana, Base, BNB, and Tron are not the feudal lords of traditional finance. This is more like the Warring States period. On the surface, it's a battle between two armies, but in reality, it's a complex alliance of seven states. Everyone is forming alliances, and everyone is wary of their allies. The alliances of the Warring States period weren't based on mutual affection, but on the desire to avoid being swallowed up by Qin. So who is Qin? I think Stripe is most like Qin. Not because it's currently the largest stablecoin, but because it most seems to be redefining the system through engineering, productization, and API-based approaches. What's truly terrifying about Qin isn't a single battle, but its counties, military merit, laws, provisions, and weights and measures. Stripe's approach is similar. It doesn't necessarily need to issue the largest stablecoin itself, but it wants to define how businesses issue tokens, receive payments, settle accounts, manage balances, handle merchant acceptance, and integrate with the global payment stack. Stripe's acquisition of Bridge is significant not just because it bought a stablecoin infrastructure company, but because it transformed stablecoin issuance into a Stripe-like capability. Bridge's Open Issuance states it simply: businesses can launch and manage their own stablecoins, controlling mint, burn, reserves, and product experience. The threat to issuers like Circle isn't about a single new coin, but about the commoditization of "stablecoin issuance" itself: once issuance capabilities become APIs, the real value lies not in the coin itself, but in distribution, compliance, liquidity, merchant relationships, and routing. Stripe's ultimate goal may not be to become the largest issuer, but to become the operating system between all issuers and businesses: you can issue your own coin, use USDC, use USDT, accept bank tokenized deposits, use cards, use ACH, use Base or Solana, but the entry point, reconciliation, risk control, compliance, merchant relationships, and developer experience should ideally remain with Stripe. Just as the Qin Dynasty unified China by standardizing weights and measures. Stripe is working on stablecoins, so it's first focusing on a unified interface. Visa and Mastercard are more like the State of Wei. Wei was a traditionally powerful state in the Central Plains, with a mature system, an important geographical location, and strong early reforms. However, in the mid-to-late Warring States period, its biggest fear was being caught between the old and new forces.Visa and Mastercard are currently in this position. They control the core of the old payments world: acceptance networks, card-issuing bank relationships, risk control rules, dispute resolution, and brand trust. However, they also understand best that if stablecoin settlement and agency payments bypass the card network, they will be relegated from "payment network rule-makers" to "an optional interface." Therefore, Visa/Mastercard won't truly betray the banks. They cannot function without bank card issuance, accounts, KYC, credit, and regulatory relationships. But they cannot simply stand behind the banks. Visa has expanded its stablecoin settlement pilot to nine chains, including Base, Polygon, Canton Network, Arc, Tempo, and existing chains like Ethereum, Solana, Avalanche, and Stellar; Mastercard is also continuously advancing its acquisitions of stablecoin capabilities and related infrastructure. This indicates that their strategy is not to bet on a single stablecoin or a single chain, but rather to turn both stablecoins and chains into settlement options. For Visa/Mastercard, the most important thing isn't the card itself, nor a particular payment method, but acceptance, rules, risk allocation, and routing power. As long as transactions need to be accepted, authorized, cleared, accountable, refunded, and compliant, they still have value. In other words, Visa/Mastercard doesn't want to be a dinosaur in the stablecoin world; they want to be the roads and checkpoints. Large banks are like the state of Qi. Qi is wealthy, commercially developed, and resource-rich, but its internal coordination costs are high. The banking system has the deepest deposit pools, the strongest regulatory relationships, and the most core corporate treasury clients, but it is also most easily held back by its own institutional inertia. They cannot restructure as nimbly as Stripe, nor can they operate outside of mainstream US regulation like Tether. Their strengths are trust and balance sheets, and their weaknesses are also trust and balance sheets. The fundamental goal of the banking alliance is not to prevent the existence of stablecoins, but to prevent stablecoins from turning the banks' core deposit relationships into part of someone else's growth flywheel. This is why the regulatory boundaries of rewards/yields are so critical. If a consumer or business is simply using Stablecoin for cross-border payments, a bank can argue that it's competition from Payment Rail. However, if users, due to rewards from Coinbase, Stripe Wallet, Merchant Wallet, or a certain agency finance account, long-term transfer cash that would normally be held in a bank to their Stablecoin balance, then the bank faces not just a reduction in payment costs, but a complete rewriting of its liabilities. Coinbase is like the state of Zhao. Zhao has cavalry, highly mobile, and has long been situated between the Central Plains and the frontier.Coinbase's advantage isn't a single coin, but rather its flexibility: exchange liquidity, wallet, Base, institutional custody, developer ecosystem, US compliance, and the general public's perception of crypto. It can be linked to Circle, or partner with Stripe/Visa/Mastercard; it can earn USDC yields, or develop Coinbase Business; it can make Base an entry point for on-chain applications, or push protocols like x402 towards agency payments. Coinbase's participation in the new stablecoin alliance is not a "betrayal of Circle." The relationship between Coinbase and Circle has never been one of two completely equal allies. In 2023, Circle and Coinbase entered into a Collaboration Agreement, under which Circle pays Coinbase a fee corresponding to its role in USDC distribution and ecosystem growth. According to the agreement, Coinbase retains 100% of the interest income generated by USDC on its platform, while USDC revenue from off-platform and DeFi ecosystems is split 50/50 with Circle. Coinbase has veto rights in the new USDC partnership, with an initial agreement term until August 2026. It will automatically renew unless there is a violation of the agreement or a mutual decision not to renew. Therefore, Coinbase's stance isn't a temporary change of heart. It has always been a major player in the USDC economic structure, controlling a significant portion of the distribution. This also explains why Coinbase must be multi-home. USDC is important to it, but Coinbase's ultimate goal isn't to be a channel for Circle, but rather to become the gateway to on-chain USD. Whether the future trend favors USDC, PYUSD, RLUSD, a Stripe-issued stablecoin, a bank deposit token, or a merchant coin, Coinbase aims to be part of the liquidity, wallet, on-chain execution, and developer ecosystem. Circle, on the other hand, is like South Korea. South Korea isn't unimportant, but its geographical location is too precarious, sandwiched between powerful nations; any attack from either side would be painful. The problem with Circle isn't that USDC isn't growing; quite the opposite, USDC remains one of the most important compliant USD stablecoins globally, and Circle itself is actively promoting USDC to exchanges, clearinghouses, banks, neobanks, payment companies, and multiple blockchains. USDC natively supports 20 blockchains, including Ethereum, Solana, Base, Arbitrum, Avalanche, Polygon, Stellar, and Sui, and also relies on exchanges and markets like Coinbase, Binance, Kraken, and OKX for distribution. But this is precisely the problem. Circle appears to be at the center of the stablecoin stage, but its core capabilities are being dismantled: issuance capabilities are being productized by Stripe/Bridge, distribution is controlled by Coinbase, the compliance narrative is being absorbed by banks, settlement is being multi-currency-based by Visa/Mastercard, and on-chain execution is being taken away by Base, Solana, and Ethereum.USDC can continue to grow, but Circle may not be able to capture a profit pool commensurate with that growth. Therefore, Circle must transform from an issuer into a network. It cannot simply prove that USDC is the most compliant, transparent, and institutionally suitable stablecoin; it must also prove that it has a distribution independent of Coinbase, deeper enterprise treasury integration, more native use cases with banks and payment companies, and its own CPN and stablecoin network capabilities. Otherwise, it will become a high-quality option on someone else's menu, not the menu itself. Tether is like the State of Yan. Far from the Central Plains and often outside the center of social order, Yan has its own space to thrive. Tether doesn't need to rush into joining the alliance of mainstream US finance, because its advantages come precisely from outside the Central Plains: offshore dollar demand, the global South, exchange liquidity, capital-controlled markets, low-cost pathways like Tron/BNB, and sufficiently deep path dependence. The clearer US regulations become, the more suitable USDC, bank-tokenized deposits, and compliant stablecoins will be for institutions and the US context. However, in markets where banks are inefficient, dollars are scarce, regulations are ambiguous, and users only care about quickly obtaining digital dollars, USDT still maintains its strong vitality. Tether's strategy is likely not to enter the market (USAT can be seen as a cooperative test with the Trump administration), but to continue collecting taxes outside the borders. While others are arguing about whose standards are acceptable to Washington, Tether is arguing about whose wallets already contain USDT. Finally, there's the Chu Kingdom, which represents the public blockchain ecosystem. The public blockchain ecosystem is not marginal. It's more like the Chu Kingdom: culturally outside the Central Plains' rules and customs, yet vast in territory, with diverse military forces and abundant resources. Internally not entirely unified, but anyone aspiring to unify the world cannot ignore it. Ethereum, Solana, BNB, Tron, Polygon, Canton, and even chains with kinship ties to other major powers like Base, Tempo, and Arc, these chains are not part of the traditional centralized culture of finance in the Central Plains. They have their own language, developers, wallets, gas, MEV, validators, sequencers, bridges, DEXs, DeFi, and community culture. The Central Plains see them as wild, while the Chu people see the Central Plains as corrupt. Banks and card organizations want to turn blockchains into pluggable settlement rails, but a blockchain is more than just a rail. A blockchain has its own application layer, asset network, and liquidity gravity. Ethereum aims to be the settlement layer for institutional assets and tokenized finance. Solana aspires to be the on-chain highway for high-frequency, low-cost consumer payments and agency transactions. Base aims to capture Coinbase distribution, USDC liquidity, and access to compliant US users. BNB and Tron continue to dominate global South, exchanges, and USDT liquidity.Chains like Canton, Tempo, and Arc, which are more geared towards institutional and payment customization, are attempting to translate their cultural elements into a language acceptable to the Central Plains. Stripe wants a unified interface, but it can't possibly cover all scenarios. Visa/Mastercard wants to maintain its rule-based network, but it can't prevent all new Rails. Banks want to hold onto deposits, but businesses and agents will demand faster and more flexible cash flow. Coinbase wants to become the on-chain USD gateway, but it can't monopolize all enterprise scenarios. Circle wants to transform from an issuer into a network, but it must break free from its dependence on a single distribution. Tether continues to collect taxes outside its own borders, but it may not be able to enter institutional compliance scenarios. The public chain ecosystem is as vast as the State of Chu, but it also needs to translate its language into a language understandable to the Central Plains. This is the essence of alliances and counter-alliances. In the short term, both alliances will strengthen their narratives. The stablecoin alliance will claim to represent open networks, global payments, developer innovation, and agency commerce. The banking alliance will claim to represent security, regulation, deposits, corporate treasury, and system stability. Both sides will continue to tug at the CLARITY Act's reward/yield boundary, as this line determines whether stablecoin is a payment instrument or a deposit substitute. In the medium term, the two alliances will begin to interconnect. Visa/Mastercard will simultaneously support bank deposit tokens and multiple stablecoins. Stripe will integrate with banks, chains, issuers, and enterprises. Coinbase will continue to benefit from USDC while promoting Base, Coinbase Business, and x402. Circle will strive to move away from its reliance on a single distribution, shifting its focus from issuer to network. Large banks will criticize stablecoin rewards while simultaneously integrating stablecoin settlements due to customer demand. Public chains will shift their focus from competing for TVL (TVL) to competing for stablecoin flow. In the long term, the market will not unify into a single coin or a single chain. Enterprise treasury may use tokenized deposits and tokenized money market funds. Platform payouts, agency commerce, and API payments may use stablecoin rails. Offshore USD and exchange liquidity will continue to heavily utilize USDT. Institutional settlements and tokenized assets tend to favor networks that are easier to interpret for compliance. High-frequency consumption, agent calls, and low-cost transactions will leave room for platforms like Solana, Base, BNB, and Polygon. The ultimate winner won't necessarily be the one issuing the largest stablecoin. Issuance rights will be commoditized, blockchains will become multi-hosted, wallets will become proxy-based, and compliance will be protocol-based. The real tax isn't on the coin itself, but at the points where value flows from one system to another.This explains why Visa is expanding across multiple blockchains simultaneously, and why the x402 Foundation's list includes Adyen, AWS, American Express, Base, Circle, Cloudflare, Coinbase, Google, Mastercard, Microsoft, Polygon, Shopify, Sierra, Solana, Stripe, ThirdWeb, and Visa. It illustrates that while these seven countries may have their own agendas, they are compelled to sit in the same room on the new standards of agency payment and agency finance. Agentic commerce is just the first layer; it describes agents buying things, ordering services, calling APIs, paying for content, purchasing data, and completing checkouts on behalf of people. Agentic finance goes a step further, describing agents managing funds for individuals and businesses: determining which rail to use for payment, when to exchange currency, when to redeem money market funds, when to convert USDC to deposit tokens, when to use card payments, when to use stablecoins, when manual approval is required, and when to automate the process. Traditional payment systems are designed for people. Humans open apps, enter card numbers, click checkout, perform 3DS operations, accept subscriptions, process invoices, and view bank statements. But agents shouldn't be forced to mimic human web browsing. An agent's objective function is cost, speed, success rate, compliance, accountability, refundability, auditability, and programmability. It won't be inherently loyal to any particular chain, issuer, bank, or card network. It will only choose the optimal path within a given policy. This is why the ultimate goal of stablecoins isn't just payments, but routing. Without agency finance, the stablecoin war will likely be absorbed by the old payment systems. Consumers might not even know they're using stablecoins, merchants will only know that payments arrive faster, and Stripe, Visa, Mastercard, PayPal, and banks will integrate the underlying settlement rail into their existing product experiences. Stablecoins will become a better backend component. But if agency finance succeeds, stablecoins will be more than just payment tools; they will become the settlement language of the machine economy. API calls, model calls, data purchasing, advertising, supply chain procurement, cross-border payouts, corporate cash management, automated expense reimbursement, real-time taxation, and tokenized asset allocation may all require a value transfer method more suitable for machine-to-machine communication than cards, ACH, or wire transfers. This is also a real opportunity for entrepreneurs. Large countries compete for standards, small countries build barriers. In the Warring States period, those who truly drove institutional change were not often rulers, but rather itinerant scholars, Legalists, strategists, artisans, merchants, and the military elite. [Charlie]