Why Next-Generation Financial Infrastructure - My Thoughts on Founding RedQ Inc.

"Promoting China's modernization is an exploratory endeavor, with many uncharted territory. We must boldly explore in practice and propel development through reform and innovation... Especially in cutting-edge practices and uncharted territory, we should encourage bold exploration, pioneering spirit, and the pursuit of effective solutions and solutions to new contradictions and problems." — Xi Jinping

This statement provides a fundamental guiding principle for understanding how China should address the most profound challenges facing the world today—including the dollar hegemony system, which will be the focus of the following analysis. Facing an outdated system supported by the twin pillars of "transactional inertia" and "control of financial infrastructure," simple responses are ineffective. Only fundamentally "exploratory" and "creative" construction can forge a new path.

Before this, I need to lay the groundwork. I believe the two pillars that truly underpin the dollar's hegemony are: the stable valuation generated by over 80 years of trading inertia, resulting in high-frequency global market transactions and the exceptional liquidity that allows the dollar to be readily exchanged for anything; and the US-dominated international financial infrastructure. These are both concrete manifestations of a nation's sovereign credit. So, while stablecoins have taken over the dollar and helped extend its reach, stripping away its credit, they have also taken away the US's control over it.

In the short term, the on-chain transformation of the dollar (stablecoins + RWAs + ETFs) will outweigh the de-dollarization of the US dollar. The net effect will tend to be a "strengthening of the US dollar system." While the black market will use encryption, on-chain traceability and US chokepoint policies make it vulnerable to infiltration and crackdowns; policies on "privacy tools" will undergo minor adjustments, but the overall goal remains unchanged.

In the medium to long term, market development and the competition among major powers will depend on whether the non-US dollar clearing community and the institutional role of Bitcoin and other non-sovereign assets can truly expand. Currently, this is still in its early stages and is regionalized. To some extent, China has historically sought to seize the right to coin the US dollar through various means, such as issuing US dollar bonds.

What we often refer to as "printing dollars" will ultimately be reduced to "sovereign debt + the US dollar clearing/governance system." So, to recap what I said at the outset, the first aspect of dollar hegemony is actually a debt creation mechanism backed by sovereign credit. The Treasury issues bonds, which are then bought by the market, sovereigns, and institutions, or taken over by market intermediaries. The Federal Reserve, when necessary, influences liquidity and interest rates through open market operations. This is not just about currency liquidity, but also, as mentioned in the second point, control over international financial infrastructure and rules (sanctions authority, influence over SWIFT and payment settlements, market regulatory access, accounting and legal regulations, etc.). In theory, if China's sovereign credit were stronger than that of the United States, the Chinese government's "printed dollars" would be more popular. However, because the United States controls key international financial infrastructure, it can extend its influence through the aforementioned legal and sanctions tools ("long-arm sanctions/dollar spillover"). This creates a power asymmetry, resulting in the continued belief that even if China's sovereign credit is stronger than that of the United States, the public still trusts the US and accepts US-printed dollars. Stablecoins, using blockchain technology for transactions, can bypass the US financial infrastructure, achieving decentralization and effectively weakening US financial power.

Within this framework, there are actually two obvious short-term opportunities.

1. Establishing a channel in the United States. The biggest risk of China using stablecoins to undermine the dollar is that it will undermine domestic capital control. Domestic moles may also use this channel to transfer assets abroad. We help by providing channels or services, but this may not be done well, and it is dangerous and unpatriotic. We are patriotic young people, and this opportunity is unworthy of our mission.

2. Helping China develop the blockchain market and accelerate the implementation of Web3. We are laying out China's blockchain infrastructure. This is what we are doing now. Let's abandon short-term temptations and focus on more fundamental and long-term goals. Accelerate the implementation and application of Web3 technology in China, building an independent, controllable, efficient, transparent, and underlying value network capable of supporting the future digital economy.

What does this "next-generation financial infrastructure" mean?

* It means sovereign control. Our transaction data, clearing rules, and asset protocols will all run on our own infrastructure, fundamentally breaking away from dependence on a single centralized system and achieving true "digital sovereignty."

* It means efficiency and inclusiveness. It will bypass the lengthy intermediary chains of traditional finance, enabling peer-to-peer value transfer, significantly reducing costs and making financial services accessible to a wider range of individuals and small and medium-sized enterprises.
* It represents an innovative paradigm. This new infrastructure will give rise to entirely new business models, financial products, and organizational forms (such as DAOs), injecting a continuous stream of "new momentum" into the Chinese economy.

So, "Why the next generation of financial infrastructure?"

Because it is crucial to whether we can control our own digital destiny in the future. In the digital economy, innovation at the application layer alone is far from enough; the true moat lies in the underlying protocols and infrastructure. RedQ's exploration is precisely the answer to this question of our time. We refuse to be "arbitrageurs" in the old world; we aspire to be "builders" in the new. The road ahead is undoubtedly long, but we firmly believe that only by laying the foundation ourselves can we build a towering building that truly belongs to us.