《Wen Hongjun Stablecoin New Finance-18》OUSD Free Competition vs Bank Deposit Tokens—Holding the Line as Old and New Forces Launch an All-Out War

The Open USD standard stablecoin has ignited a war of stablecoins driven by the enterprise sector with the "Free Financial Front," while the banking system is accelerating the settlement network for deposit tokens. Is this a real confrontation, or are two monetary concepts complementing each other?

(Background: Swift blockchain ledger ready: 17 banks including Citigroup and HSBC pilot "tokenized" cross-border payments) (Background supplement: "Wen Hongjun Stablecoin New Finance - 17" Market Share War Incoming? Ultimate Settlement Sovereignty Showdown Between Old and New Forces)

Table of Contents

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• I. A Forgotten Prophecy: Denationalization of Money
• II. This Time, Why Not Libra 2.0
• III. A Three-Stage Game of Currency Competition
  • 🛑 Stage One: Natural Selection of Liquidity
  • 🌐 Stage Two: Cutthroat Battle of Scenarios and Efficiency
  • 🏛️ Stage Three: The Agent War for Settlement Rights on Multi-Dimensional Ledgers
• IV. The Old Guard Is Not Sitting Idle: The Deposit Token Army Gathers
• V. Two Armies Face Off, Fighting for the Border, Not Annihilation
• VI. A Tougher Question: Neither Side Is Hayek's True Vision
• VII. Bringing It Back to Taiwan
• ✅ Words from the Financial Starfish

Last week, Visa, Mastercard, Stripe, BlackRock, Google, and over 140 other giants formed an alliance, grandly launching the open standard stablecoin Open USD (OUSD). Circle's stock price instantly plunged over 10%, triggering a wave of panic.

What retail investors see is giants cutting each other's throats, blood flowing like rivers.

But what I see is the soul of the Austrian school master—Friedrich Hayek—who was buried by mainstream economics for half a century, perfectly resurrected in the Web3 world.

And if you think this is just a one-way script of "giants eating Circle," the other half of the story surfaced this week with equal prominence—banks and central banks are not sitting idle; they have also loudly formed their own powerful alliance. This article lays out both fronts on the same chessboard.

I. A Forgotten Prophecy: Denationalization of Money

If you have read Hayek's Denationalization of Money, you'll remember his core argument: currency should not be a state monopoly; it should be thrown into a free market to compete like any other commodity. Only competition can filter out the most stable, fastest, and most trustworthy currency.

For half a century, this idea lived almost only in footnotes of textbooks—until stablecoins moved it from theory into the real settlement layer.

Today, OUSD bursts onto the scene. It's not about one company winning or another losing. This is the official kickoff of the second half of the great prophecy of "free currency competition."

II. This Time, Why Not Libra 2.0

Sharp-eyed readers will certainly recall Libra from 2019—also a giant alliance, also aiming to shake the existing monetary order. Yet it disbanded in less than a year under regulatory siege from various countries. On the surface, OUSD resembles a reenactment of Libra, but look closely; it has almost dismantled the three knives that killed Libra, one by one:

• First, sovereignty. Libra was a basket of currencies, directly challenging the minting rights of all central banks. OUSD is a pure U.S. dollar stablecoin, not threatening the U.S., but instead expanding the dollar's territory and creating buyers for U.S. Treasuries. Washington has gone from the executioner back then to the invisible sponsor now.
• Second, legal vacuum. In 2019, there was no framework; the default regulatory response was "no." Today, with the GENIUS Act, compliant issuance finally has a path.
• Third, a single toxic face. Libra equated to Facebook, carrying the dual sins of antitrust and trust. OUSD is an independent entity; the board is co-governed by partners. No single face can bear all the bullets; responsibility is deliberately dispersed.

What Hayek always wanted to tell us is never that "free competition leads to universal peace," but that "the market will keep trial and error until it finds a form that can survive." OUSD is the next-generation version that evolved after Libra's death, more resilient and ready to fight.

III. A Three-Stage Game of Currency Competition

The global stablecoin ecosystem is evolving into a higher dimension along the objective laws of market competition:

🛑 Stage One: Natural Selection of Liquidity

Hayek said trust is earned through competition, not printed. USDT and USDC have already undergone countless stress tests from extreme DEX and DeFi market conditions in the wild west of crypto, spontaneously winning the trust of the first wave of users. This bottom-up liquidity moat cannot be erased overnight by any powerful entity arriving from above.

🌐 Stage Two: Cutthroat Battle of Scenarios and Efficiency

As a commodity, money's value lies in "usefulness." The OUSD coalition, with incentives like zero fees and interest return on reserves, goes straight for Web2 e-commerce and cross-border B2B scenarios. This is the most beautiful aspect of the free market—competition forces extreme innovation. Faced with the coalition's pressure, incumbents like Circle will inevitably be forced to accelerate a full pivot toward the new battlefield of Agentic AI (AI agent payments). When future AI agents automatically choose the most permissionless and efficient ledger for settlement in milliseconds, it won't be dictated by any political order—it will be pure efficiency competition.

🏛️ Stage Three: The Agent War for Settlement Rights on Multi-Dimensional Ledgers

The endgame of this free competition is not the complete annihilation of one side by the other, but a contest of "interoperability" among multiple ledgers. OUSD is tied to Stripe's Tempo and Solana; Ethereum holds the established standard for global DeFi settlement; and above that, there are sovereign fiat old-system ledgers like the BIS-led mBridge and Project Agora.

IV. The Old Guard Is Not Sitting Idle: The Deposit Token Army Gathers

In the same week OUSD stole the headlines, two seemingly minor but equally weighty news items quietly landed: SWIFT announced that its blockchain ledger is officially available, with 17 systemically important banks across six continents ready to begin pilot trials; and the Bank of Korea (BOK) reiterated to the National Assembly that Korean won stablecoins should be preferentially issued by a "bank-led alliance," while expanding its own deposit token pilot.

This is no coincidence. It's the first public formation of the bank and central bank camp.

Let's review: Deposit tokens, in plain language, are bank deposits directly turned into on-chain tokens. The issuer is a bank, backed by real deposits, subject to banking regulation, and complete with KYC/AML—legally a different species from privately issued stablecoins. In the past, this was just isolated experiments by a handful of banks (JPMorgan's JPMD, SoFi). After this week, it has become an organized collective defense.

SWIFT's move this time is the real heavyweight. From concept to official availability in just nine months, it immediately lined up 17 global systemically important banks across six continents, including HSBC, Citigroup, UBS, Mitsubishi UFJ, Standard Chartered, DBS, UOB, ANZ, Bank of New York Mellon—the giants that hold the lifeline of global capital flows. The key lies in the ledger's design logic: it is not a new public chain, but a "coordination layer" that allows each bank's own deposit token ledger to interoperate—funds can move first, 24/7, and then go through existing systems for final settlement, while fully preserving each bank's original compliance, credit, and risk control standards. SWIFT currently processes the equivalent of global GDP every two to three days, connecting over 200 markets and more than 11,500 institutions. What it aims to defend is not technology, but the rule-making power.

The Bank of Korea is the most candid stance from the regulatory side: Korean won stablecoins should be preferentially issued by a bank-led alliance, with a legal policy coordination mechanism to lock the leading role in banks' hands. In the second half of the year, it will expand its own deposit token pilot, targeting payment scenarios close to people's daily lives such as government subsidies, consumer vouchers, and electric vehicle charging. This localism is not just empty slogans—South Korea's largest financial group, KB, has already completed Korean won stablecoin payment verification using Kaia, reducing cross-border remittance to 3 minutes and cutting fees by 87%. The bank camp dares to position itself so assertively because it truly holds efficiency cards, not just a defensive mindset.

V. Two Armies Face Off, Fighting for the Border, Not Annihilation

Putting OUSD, SWIFT, and BOK on the same chessboard, the global stablecoin game is clearly splitting into two camps:

Open public chain camp—OUSD, USDC, USDT, competing on zero fees, global liquidity, composability. Main battlefields: Web2 e-commerce, cross-border B2B, future AI agent payments.

Bank alliance camp—SWIFT ledger, JPMD, central bank-backed deposit tokens, competing on compliance, credit risk management, compatibility with existing settlement systems. Main battlefields: institutional large-value settlements, government payment scenarios, interbank settlement.

The real question to ask is never "Will deposit tokens defeat stablecoins?" The answer is likely: in institutional B2B and interbank settlement, the deposit token alliance wins; in global retail, DeFi, and AI payments, open stablecoins still have no rival. Both are fighting over the boundary of settlement dominance, not over mutual annihilation.

VI. A Tougher Question: Neither Side Is Hayek's True Vision

But if we read Hayek more thoroughly, we find that neither camp truly embodies what he imagined as the denationalization of money in its real sense.

Hayek's currency competition is competition between different issuing entities and different units of account—the market could even abandon the dollar and choose a more stable anchor. Yet OUSD, USDC, and USDT are essentially all dollar shadows; they compete only on "which dollar pipeline is more efficient." This is closer to an efficiency game within the dollar itself. More critically, in this "privatized dollar competition," power is not evenly released from the state but asymmetrically transferred: the U.S. Federal Reserve and Treasury are actually the biggest invisible winners of this game; what is truly weakened are non-U.S. central banks. The BIS has already warned publicly that stablecoins are accelerating dollarization, eroding the monetary sovereignty of local banking systems in various countries.

The deposit token camp stands at the complete opposite extreme—it locks currency competition back into the cage of state supervision. Bank-led, central bank-backed, legal coordination mechanisms—essentially, it recollects "issuing rights" into the existing system, using the technological shell of blockchain to package a self-defense war of monetary sovereignty.

In other words, OUSD has privatized the dollar's pipeline but not shaken the dollar's hegemony; deposit tokens have on-chained bank liabilities but not loosened the state's control over money. The kind of true parallel competition with different anchors and different issuers that Hayek really wanted—neither camp has truly put it on the table.

There is also something OUSD itself hasn't yet written: the profit-sharing formula, board seats, voting weights—these remain blank. 149 logos standing in a row is impressive but also the alliance's most fragile moment. To truly coordinate the governance rules among these frenemies who must "cooperate first, then bite each other"—historically, almost no one has succeeded. Libra died from regulatory siege. If OUSD fails, it will likely die from its own people failing to agree on how to split the money.

VII. Bringing It Back to Taiwan

South Korea's Digital Asset Basic Law has been stuck for nearly a year, stalling on the same issue—who can issue stablecoins. The central bank wants banks to lead; the industry hopes more players can enter. This battle line is the same war fought in different countries, just like the U.S. OUSD vs. Circle battlefield.

For Taiwan, this is the real cause for anxiety—we have neither the call power of a bank alliance like SWIFT, nor have we decided whether the New Taiwan dollar should go the open public chain route or the closed deposit token route. When others have already run pilot results on both paths, we are still waiting and watching. The outcome is that the settlement layer for the semiconductor and AI supply chain will be directly eaten by other architectures, regardless of which side wins.

✅ Words from the Financial Starfish

The noise from various bills in the U.S. government before the midterm elections is just surface political ripples. Privately, Washington knows very well: letting these private institutions compete and optimize the efficiency of the "digital dollar" to the extreme is the cheapest and most effective weapon to maintain the dollar's global hegemony. And banks and central banks also know clearly: instead of being bypassed by open network currencies, it's better to form their own team, packaging deposit tokens as a safer and more compliant option, and recapture home-field advantage.

Free competition has never been a one-way market invasion; it's two armies simultaneously lining up—one charging forward under the banner of open innovation, the other pulling back under the banner of compliant safety. This is not Circle's doomsday, nor a victory declaration for any alliance. It is the first time, half a century after Hayek's "Denationalization of Money," that the concept has been placed in a real market, undergoing an ultimate experiment with real money. But the two arenas of this experiment: one is drawn within the dollar's own yard, the other is drawn back inside the walls of national monetary sovereignty.

The noise is temporary. Only by understanding the underlying logic of free currency competition can you see the true value of assets in the next wave.

That's also why we named our company Hayek.