Daniel Liu, CEO of Republic Technologies, recently shared key insights with CI on the GENIUS Act and the next phase of institutional Ethereum adoption. He also commented on the role of Ethereum (ETH) in the DeFi and broader blockchain / web3 space. In addition to sharing his perspective on these crypto industry developments, Liu provided his take on the (potential) systemic risk of stablecoins.
Our discussion with Daniel Liu is shared below.
Crowdfund Insider: Let’s start with the GENIUS Act. What’s your take on the bill, and why is it important?
Daniel Liu: First off, The GENIUS Act being passed marks a turning point in the relationship between crypto and government. Whereas previously the regulatory environment was determined on the whims of the administration and their SEC Chair, this act establishes a clear framework going forward and signals alignment between US fiscal policy and an on-chain future.
In terms of the legislation itself, it’s a pivotal moment for the crypto ecosystem: not because it’s disruptive to traditional finance, but because it’s pragmatic. Under the proposed framework, stablecoins used for payments must be backed by cash and short-dated U.S. Treasuries and cannot offer interest. The effect here is that the banking industry remains competitive with their traditional interest-bearing products, and innovation can continue in the stablecoin space.
And yield will still exist on-chain. In DeFi, composability is key. You want building blocks that are transparent, auditable, and modular. The GENIUS Act supports that by creating a clean separation between payment instruments and yield-generating protocols. It moves yield into the open, where it can be risk-priced, monitored, and integrated with other financial infrastructure. That alignment is essential for institutional participation.
Crowdfund Insider: Some fear this separation may inhibit innovation. Do you see it that way?
Daniel Liu: Not at all. Innovation thrives with clarity. What this regulation does is eliminate the gray area around how and where yield is generated. That’s a net positive for capital allocators. We expect two things to emerge from this clarity: first, a shift toward native ETH staking and restaking vaults for crypto-denominated yield; second, the evolution of yield-bearing tokens into their own asset class, distinct from stablecoins.
Both trends strengthen Ethereum’s infrastructure and create new opportunities for institutional treasurers looking to build exposure without compromising regulatory posture.
For an example of this innovation, look towards Ethena Protocol. Ethena issues USDe, synthetic dollars that aren’t backed by dollars directly, but rather hedge against ETH and generate a yield from doing so which is passed to USDe holders.
While it is not yet confirmed that USDe represents an asset class distinct from stablecoins, the SEC and Ethena had a meeting to discuss the matter prior to The GENIUS Act being passed. We remain optimistic that protocols like Ethena’s will be deemed compliant and pave the way for continued innovation in DeFi.
Crowdfund Insider: Speaking of Ethereum, how do you see its evolving role?
Daniel Liu: Ethereum is transitioning from being viewed as an asset to being recognized as infrastructure. It’s not just a token, it’s the base layer for programmable finance. Right now, Ethereum settles trillions in stablecoin volume and secures over $220 billion in total value across DeFi and tokenized assets.
For institutions, ETH is becoming a treasury-grade asset. A couple reasons:
Every transaction on the Ethereum network requires a network usage fee that is represented in ETH. Thus, as Ethereum network adoption occurs, demand for ETH the asset increases. In other words, as on-chain activity increases the value accrues to ETH.
Unlike Bitcoin, which is often positioned as a store of value, ETH has a productive quality to it. Through staking, validator operations, and composable protocols, it can generate cash flows. That’s a fundamental shift in how digital assets are understood in the context of balance sheet management.
Crowdfund Insider: How is the ETF Treasury Company different from an ETH ETF?
Daniel Liu: ETFs generally track price. They don’t offer yield. Our model is built around both price appreciation and staking economics. We view ETH as productive capital. That means compounding yield, strategic validator deployment, and selectively allocating to high-quality crypto funds.
One may compare it to holding raw gold versus investing in a gold mine. The former preserves value; the latter produces it. In this case, holding the ETH also enables you to generate more of it, a natural synergy that a treasury business model can take advantage of but that an ETF structure can’t.
Crowdfund Insider: There’s been growing concern about the systemic risk stablecoins might pose. Is that something you think about?
Daniel Liu: It’s a fair concern, especially when stablecoins are backed by opaque or unverified assets. That’s exactly the problem the GENIUS Act addresses. The analogy I like to use is a casino: you trade dollars for chips and assume the chips are worth something. But if the casino can’t cash you out, the system collapses like in the case of Terra in 2022.
What we need are structures where reserves are verifiable and redemption mechanisms are sound. If stablecoins are regulated like money market funds, and yield is shifted to well-audited layers of DeFi, we reduce the systemic risk dramatically.
Crowdfund Insider: How do you think about the global regulatory environment?
Daniel Liu: Regulatory arbitrage continues to shape how crypto firms enter public markets. Some jurisdictions, like Canada, offer a more flexible environment for listing digital asset-focused entities, particularly those engaging in staking or on-chain treasury strategies. This pathway has been used by several firms to gain earlier market access while staying within a regulated framework. As U.S. and G20 regulators provide clearer guidance on staking, tokenization, and Ethereum-based financial products, these cross-listed structures may be well-positioned to adapt and scale.
On the global regulatory environment more broadly, the GENIUS Act in many ways forces other regulatory environments to follow suit. Demand for USD, still the global reserve currency, will move on-chain as dollar-backed stablecoins continue to get issued. This means foreign markets will need to model the US’s approach and enable access to these products, their investors will demand it. Stablecoins being backed by USD basically makes it the new home for the global money market – as I said before the GENIUS Act is a turning point and paves the way for global crypto adoption.
Crowdfund Insider: If we were to check in with you a year from now, what would success look like?
Daniel Liu: Success is twofold: First, we want to demonstrate that ETH can be a productive, capital-efficient reserve asset—not just a speculative holding. That means proving our treasury model, increasing staking yield, and expanding validator operations.
Second, we want to shift the narrative. Ethereum isn’t just “crypto”, it’s the infrastructure layer for a new financial system. If Republic Technologies can help institutional investors access that system safely and profitably, we’re doing our job.