[Editorial] Cryptocurrency should go beyond the "yield" controversy to resolve the "credit" issue

In the cryptocurrency market, “Interest(Yield)” has always been a hot topic. Funds are transferred in pursuit of returns higher than bank savings, and traditional finance remains cautious about this. Our publication has sharply criticized the banking industry for hindering innovation and only protecting vested interests. Of course, it is true that banks try to protect their profits, and such criticism remains valid.

But we need to approach this issue more calmly and with the so-called “Steelman(Steelman)” argumentation method. What would happen if large amounts of funds originally stored in banks were to flow out massively and flood into the crypto ecosystem? This is not merely about banks feeling the pain. The cost of raising funds for banks would become higher and more unstable.

This increase in costs would inevitably lead to higher loan interest rates and tighter loan approval processes. The groups that would feel this pain first and most deeply are not large corporations or high-net-worth individuals. It is precisely small and medium-sized enterprises(SME) and low-credit consumers with the most fragile financial accessibility.

This is the real challenge faced by the crypto industry. It is no longer just about boasting “we can offer higher interest rates.” If crypto becomes a new pool of funds to replace savings, then what is the corresponding “alternative credit system”? This question must be answered.

The Nature of Credit Creation and the Challenges for Crypto

There are three fundamental principles for the operation of a credit system: ① Risk-bearing capital(Risk-bearing capital), ② Underwriting and servicing(Underwriting and servicing), ③ Structure that survives stress(Structure that survives stress).

Assuming funds circulate outside the banking system, on the blockchain, we can explore two solutions.

First, investor-funded credit(Investor-funded Credit). That is, banks or professional lending institutions still responsible for issuing and managing loans, but their funding sources are replaced from short-term savings to long-term investor funds (such as crypto liquidity, etc.). This is also the future model often referred to as RWA (Real-World Assets) or tokenization.

However, there is a difficult area here, namely “relationship-based finance.” Small and medium-sized enterprise loan data are messy, soft information(Soft information) is important, and loan characteristics vary. This makes it difficult to standardize and “easily securitize(Securitize)” loans as in mortgage lending. Ultimately, for blockchain to solve this problem, it must go beyond simple token issuance, requiring better data tracking, more advanced loan approval technologies, and supporting collection infrastructure.

Second, improving banking efficiency through technology. If increased competition forces higher deposit interest rates, then significantly reducing operational costs via technology is a way to maintain credit supply capacity.

For Sustainable Finance

So far, we have spent too much energy debating “where do returns come from.” Now, this energy should be directed toward building “what kind of credit system do we truly want.”

A sustainable solution may come from a better banking system, or from investor-led new crypto credit markets, or perhaps a third way. The key is that crypto must transcend being merely a means of asset appreciation and evolve into a主体 that addresses the lifeblood of the real economy—“credit.”

While ensuring smooth channels for ordinary people and small and medium-sized enterprises to access loans, creating innovative financial flows. This is the true value that crypto needs to demonstrate.