Last week, I met with a seasoned player in the industry. He said something that has stuck with me: “Next year’s market could upend many people’s expectations—not because of a tech narrative, but because the floodgates of the traditional financial system are being pried open.”

He was talking about a policy that quietly went into effect at the end of November—the permanent eSLR exemption. The news caused a stir in major institutional groups that day, but mainstream media barely covered it. This policy adjustment directly unleashed over $210 billion in liquidity, with an impact far deeper than most people realize.

First, let’s clarify what eSLR is: Over the past decade, banks had to allocate Tier 1 capital when buying US Treasuries, with regulatory requirements almost as strict as holding high-risk assets. Now, that restriction has been permanently removed. This means banks can now allocate an unlimited amount to short-term Treasuries, no longer constrained by capital adequacy ratios.

The chain reaction from this change is crucial. Currently, major stablecoins like USDT and USDC hold short-term Treasuries as their primary reserve assets. As banks aggressively buy up Treasuries, yields on short-term debt will be compressed to extremely low levels, drastically reducing the cost of issuing stablecoins. Lower costs and a more relaxed liquidity environment will give stablecoin issuers even stronger incentives to scale up.

There’s a prevailing view in the industry now: If this policy window lasts until 2030, stablecoin market cap could surpass the $1 trillion mark. An explosion in stablecoin supply is often a precursor to a surge in crypto market liquidity. Every past bull run has shown this pattern—funds flow in via stablecoins first, then gradually move into various digital assets.

So my friend’s assessment isn’t unfounded. When the traditional financial system proactively supplies liquidity to the crypto market, the story that follows could truly exceed expectations.