2025.04.17
SNZ × Stacks AMA: Bitcoin DeFi and Asia’s Institutional Future
Last month, we teamed up with our friends at DeSpread to ask the Korean community their most pressing questions for SNZ Holdings, one of the most active VCs in Asia and a long-time supporter of the Stacks ecosystem. You delivered sharp, thoughtful questions about institutional interest, the rise of Bitcoin DeFi, and what the future looks like for sBTC. Now, we’ve got answers.
If you’re not already familiar with SNZ, they’re a Beijing-based crypto VC firm with a global footprint and a portfolio of over 200 projects across infrastructure, middleware, fintech, DeFi, and more. They go beyond capital by playing an active role in research, community building, and long-term ecosystem growth. And yes, they’ve been supporting Stacks from the early days.
From regional insights across Korea, China, and Japan to why they’re doubling down on Bitcoin L2s, this AMA is loaded with insights. Let’s get into it. 💥
If you’re not already familiar with SNZ, they’re a Beijing-based crypto VC firm with a global footprint and a portfolio of over 200 projects across infrastructure, middleware, fintech, DeFi, and more. They go beyond capital by playing an active role in research, community building, and long-term ecosystem growth. And yes, they’ve been supporting Stacks from the early days.
From regional insights across Korea, China, and Japan to why they’re doubling down on Bitcoin L2s, this AMA is loaded with insights. Let’s get into it. 💥
What are the key trends shaping the blockchain and cryptocurrency industry in Asia? How do these trends vary across major markets such as Korea, China, and Japan?
South Korea
On one side, South Korea is a retail-driven popular crypto hub in Asia, best known for its strong interest in trading (Upbit, Bithumb, Coinone, Korbit, etc.). NFTs, GameFi, and memecoins also carved out distinct niches within the country’s vibrant crypto ecosystem.
In South Korea, the cryptocurrency exchange market is tightly regulated, which resulted in only a handful of players. Since the 2021 crackdown, only 5 exchanges secured full compliance for KRW trading (crypto trading directly against the Korean Won). The “Kimchi premium” — the tendency for cryptocurrencies to trade at higher prices in South Korea than on global exchanges — is likely to continue in 2025. The Virtual Asset User Protection Act further tightened oversight in 2024, mandating user asset segregation, insurance enrollment, and 15-year transaction record retention. By mid-2025, the FSC plans to introduce phase 2 regulations, focusing on Stablecoins and cross border trades. The recent March crackdown on 17 unregistered foreign exchanges underscores South Korea’s commitment to enforcing compliance.
On the other side, South Korea enterprises, particularly in tech, gaming, and finance (Samsung, Kakao, NCSoft, Wemade, Shinhan bank etc.) are increasingly participating in crypto. FSC’s institutional crypto investment guidelines to be released in Q3 2025 could be a game changer.
South Korea
On one side, South Korea is a retail-driven popular crypto hub in Asia, best known for its strong interest in trading (Upbit, Bithumb, Coinone, Korbit, etc.). NFTs, GameFi, and memecoins also carved out distinct niches within the country’s vibrant crypto ecosystem.
In South Korea, the cryptocurrency exchange market is tightly regulated, which resulted in only a handful of players. Since the 2021 crackdown, only 5 exchanges secured full compliance for KRW trading (crypto trading directly against the Korean Won). The “Kimchi premium” — the tendency for cryptocurrencies to trade at higher prices in South Korea than on global exchanges — is likely to continue in 2025. The Virtual Asset User Protection Act further tightened oversight in 2024, mandating user asset segregation, insurance enrollment, and 15-year transaction record retention. By mid-2025, the FSC plans to introduce phase 2 regulations, focusing on Stablecoins and cross border trades. The recent March crackdown on 17 unregistered foreign exchanges underscores South Korea’s commitment to enforcing compliance.
On the other side, South Korea enterprises, particularly in tech, gaming, and finance (Samsung, Kakao, NCSoft, Wemade, Shinhan bank etc.) are increasingly participating in crypto. FSC’s institutional crypto investment guidelines to be released in Q3 2025 could be a game changer.
“The FSC’s institutional crypto investment guidelines to be released in Q3 2025 could be a game changer.”
China
While crypto trading and mining are banned in Mainland China, Hong Kong has strategically positioned itself as a global leader in Web3, leveraging its status as an international financial hub, proximity to mainland China, and proactive regulatory framework. Hong Kong is a unique global crypto hub where TradFi meets DeFi due to:
Japan
Japan has long been a pioneer in blockchain and cryptocurrency, such as the early adoption of Bitcoin as a legal payment method in 2017. Now, Japan FSA continues to drive regulatory development to foster innovation with progressive policies. Web3 National Strategy, launched in 2022, continues to push blockchain as a strategic priority, with potential tax reforms and financial regulation updates by 2025.
Besides BTC and ETH remaining as dominant cryptocurrency, XRP, with SBI holdings as a major stakeholder, is quite popular. Recently, Circle has become the first and only stablecoin issuer approved in the Japan Market and formed a strategic partnership with SBI Holdings. On the enterprise side, Sony has launched Soneium via partnership with Astar network.
What are Stacks' key competitive advantages compared to other blockchain platforms like Ethereum and Solana? Are there any unique advantages that integration with the Bitcoin network brings?
Stacks stands out compared to Ethereum and Solana by tightly integrating with Bitcoin, the most secure and decentralized blockchain. Proof of Transfer (PoX) consensus, which anchors to Bitcoin, inherits its security and allows smart contracts to react to Bitcoin transactions. While Ethereum has a broad developer ecosystem and Solana has a currently high transaction speed, Stacks’ Bitcoin tie-in markets it uniquely for Bitcoin-centric DeFi.
What impact do you believe sBTC could have on the Bitcoin ecosystem? Why should institutional investors take notice of sBTC, and what opportunities does it present?
sBTC is a pivotal development in the Bitcoin Ecosystem. It is designed to enhance Bitcoin’s utility by enabling its use in DeFi applications and smart contracts in the Stacks network.
Before the Nakamoto upgrade, sBTC existed as a conceptual and developmental milestone rather than a fully operational asset. sBTC was proposed as a trustless, two-way pegged asset backed by 1:1 Bitcoin. Unlike WBTC, sBTC doesn’t rely on centralized intermediaries.
Nakamoto upgrade decouples Stacks’ block production from Bitcoin’s schedule, enabling faster block times (~5 sec). This set the stage for sBTC’s mainnet launch. sBTC impact becomes more concrete and significant. It has begun transforming Bitcoin into a programmable asset, driving real economic activities and positioning Stacks as a leader among Bitcoin L2s.
While crypto trading and mining are banned in Mainland China, Hong Kong has strategically positioned itself as a global leader in Web3, leveraging its status as an international financial hub, proximity to mainland China, and proactive regulatory framework. Hong Kong is a unique global crypto hub where TradFi meets DeFi due to:
- Proactive regulatory leadership and progressive regulation framework
- Its position as a gateway to China and Asia
- The integration of Web3 into a top tier financial ecosystem
- Talent and web3 ecosystem growth via various programs
Japan
Japan has long been a pioneer in blockchain and cryptocurrency, such as the early adoption of Bitcoin as a legal payment method in 2017. Now, Japan FSA continues to drive regulatory development to foster innovation with progressive policies. Web3 National Strategy, launched in 2022, continues to push blockchain as a strategic priority, with potential tax reforms and financial regulation updates by 2025.
Besides BTC and ETH remaining as dominant cryptocurrency, XRP, with SBI holdings as a major stakeholder, is quite popular. Recently, Circle has become the first and only stablecoin issuer approved in the Japan Market and formed a strategic partnership with SBI Holdings. On the enterprise side, Sony has launched Soneium via partnership with Astar network.
What are Stacks' key competitive advantages compared to other blockchain platforms like Ethereum and Solana? Are there any unique advantages that integration with the Bitcoin network brings?
Stacks stands out compared to Ethereum and Solana by tightly integrating with Bitcoin, the most secure and decentralized blockchain. Proof of Transfer (PoX) consensus, which anchors to Bitcoin, inherits its security and allows smart contracts to react to Bitcoin transactions. While Ethereum has a broad developer ecosystem and Solana has a currently high transaction speed, Stacks’ Bitcoin tie-in markets it uniquely for Bitcoin-centric DeFi.
What impact do you believe sBTC could have on the Bitcoin ecosystem? Why should institutional investors take notice of sBTC, and what opportunities does it present?
sBTC is a pivotal development in the Bitcoin Ecosystem. It is designed to enhance Bitcoin’s utility by enabling its use in DeFi applications and smart contracts in the Stacks network.
Before the Nakamoto upgrade, sBTC existed as a conceptual and developmental milestone rather than a fully operational asset. sBTC was proposed as a trustless, two-way pegged asset backed by 1:1 Bitcoin. Unlike WBTC, sBTC doesn’t rely on centralized intermediaries.
Nakamoto upgrade decouples Stacks’ block production from Bitcoin’s schedule, enabling faster block times (~5 sec). This set the stage for sBTC’s mainnet launch. sBTC impact becomes more concrete and significant. It has begun transforming Bitcoin into a programmable asset, driving real economic activities and positioning Stacks as a leader among Bitcoin L2s.
“sBTC is a pivotal development in the Bitcoin ecosystem.”
Despite ongoing discussions around institutional-level LP participation, the adoption of smart contracts for financial transactions remains limited. What are the primary barriers to institutional adoption of BTC on decentralized financial platforms? In addressing these challenges, what unique advantages does Stacks offer that other blockchain networks do not?
Regulatory uncertainty and market fragmentation are still major barriers for institutions to jump on the BTC / DeFi wagon despite the approval of Bitcoin ETFs making institutional adoption easier.
There are also infrastructure gaps that affect both BTC custody solutions and DeFi integration, limiting institutional scalability. Liquidity fragmentation, especially in DeFi, can cause slippage and limit the scale of institutional adoption. Additionally, DeFi risk management is also a daunting task for institutions to overcome before deploying more on BTC/DeFi. Stacks definitely has an edge in terms of regulatory compliance and liquidity via CEX listing.
Are institutions viewing sBTC mainly for yield, or as a secure way to use Bitcoin in DeFi? Do they see potential in actively deploying capital?
Asian institutions operate in diverse markets with different regulatory and economic environments. Security always comes first. Institutions will prioritize sBTC's security features, such as its trust-minimized nature, backed by Bitcoin's finality and a decentralized signer network requiring 70% consensus for transactions. Audits by firms like Asymmetric Research and bug bounties via ImmuneFi would reassure them, especially in markets like Japan with strict regulations.
Yield is an attractive secondary factor, varying from one market to another. Different types of institutions also have different risk/reward appetites. The overall crypto market condition also plays an important role here. Asian institutions are competitive and programmatic in search of better yield under the condition of security.
Regulatory uncertainty and market fragmentation are still major barriers for institutions to jump on the BTC / DeFi wagon despite the approval of Bitcoin ETFs making institutional adoption easier.
There are also infrastructure gaps that affect both BTC custody solutions and DeFi integration, limiting institutional scalability. Liquidity fragmentation, especially in DeFi, can cause slippage and limit the scale of institutional adoption. Additionally, DeFi risk management is also a daunting task for institutions to overcome before deploying more on BTC/DeFi. Stacks definitely has an edge in terms of regulatory compliance and liquidity via CEX listing.
Are institutions viewing sBTC mainly for yield, or as a secure way to use Bitcoin in DeFi? Do they see potential in actively deploying capital?
Asian institutions operate in diverse markets with different regulatory and economic environments. Security always comes first. Institutions will prioritize sBTC's security features, such as its trust-minimized nature, backed by Bitcoin's finality and a decentralized signer network requiring 70% consensus for transactions. Audits by firms like Asymmetric Research and bug bounties via ImmuneFi would reassure them, especially in markets like Japan with strict regulations.
Yield is an attractive secondary factor, varying from one market to another. Different types of institutions also have different risk/reward appetites. The overall crypto market condition also plays an important role here. Asian institutions are competitive and programmatic in search of better yield under the condition of security.
“Asian institutions are competitive and programmatic in search of better yield under the condition of security.”
Is the fact that Stacks is an SEC-qualified U.S. project and part of the Coinbase 50 Index a major consideration for institutional investors? How important is compliance with U.S. regulations in your firm’s investment decisions—is it a primary factor or just one of many considerations?
Stacks’ SEC qualification and Coinbase listing boosts credibility and imbues more trust in sBTC ecosystem. This likely reduces legal risks for institutions, which is crucial in Asia, where markets like Hong Kong and South Korea have growing institutional adoption driven by regulatory framework.
The coinbase listing also enhances Stack’s visibility and liquidity, making it easier for institutions to trade and invest. It is one of the factors, but at the top of the list, and it depends on the project targeted markets and audience groups.
SNZ recently joined as an sBTC issuer, alongside other major investors like Jump and UTXO. Do institutional investors engage in peer discussions and conduct joint due diligence when reviewing investment opportunities? If so, what aspects of Stacks do you believe have attracted so many institutional investors to the ecosystem?
Leveraging its regulatory compliance and major CEX listing, Stacks can partner with deep-pocketed institutions by offering custody and staking solutions. It can further introduce BTC/DeFi protocols, such as Zest Protocol and Hemetica’s USDH, allowing advanced institutional participants to deploy Bitcoin capital into lending and stablecoin markets.
Educational programs and professional regional developer community engagement are also critical to building more trust in the ecosystem.
Stacks’ appeal certainly comes from its built-on-Bitcoin security, programmability, enhanced block times, regulatory compliance, and major CEX listing. That said, being a long-term supporter since the early days, SNZ believes compounding a strategic partnership over time will be more valuable and rewarding than focusing on short-term market volatilities.
What support does SNZ Holdings provide beyond investment in portfolio projects? Are there any notable technical or operational collaborations contributing to the growth of the Stacks ecosystem?
SNZ goes well beyond traditional investment by offering strategic advisory support that transforms portfolio projects into ecosystem builders. “Connect to Empower” is SNZ’s mission. Besides holding STX and participating in Stacks sBTC liquidity programs, SNZ actively engages with Stacks DeFi applications and Bitcoin communities, promotes the ecosystem vision, co-hosts events and activities, supports talent search, gathers developer communities’ interests and offers development resources as well as operating as a signer to support Stacks infrastructure.
In closing, what are the broader implications of Bitcoin's integration into DeFi ecosystems, and how might this reshape global financial systems, institutional investment strategies, and regulatory landscapes over the next decade?
Since the Taproot upgrade in 2021 opened the door for BTCFi, the transformative journey has begun to redefine Bitcoin’s role in finance beyond store of value. Bitcoin’s liquidity and programmability, unlocked via technological innovations, hold immense potential to further democratize finance, reduce reliance on intermediaries, and create a more inclusive and transparent global financial ecosystem.
With further improvements on BTCFi security, scalability, and regulatory clarity, institutions are likely to increase their exposure to the Bitcoin enabled DeFi ecosystem and introduce novel instruments over the next decade.
Bitcoin has evolved into a digital equivalent of gold, distinguished by its permissionless and decentralized nature as an alternative asset. The passage of the STABLE and GENIUS Acts this year is poised to reinforce the U.S. dollar's position within the traditional finance systems. Furthermore, these legislative developments are expected to foster a more conducive regulatory framework for BTCFi, thereby accelerating its growth and enhancing the long-term potential of the decentralized finance (DeFi) ecosystem.
Stacks’ SEC qualification and Coinbase listing boosts credibility and imbues more trust in sBTC ecosystem. This likely reduces legal risks for institutions, which is crucial in Asia, where markets like Hong Kong and South Korea have growing institutional adoption driven by regulatory framework.
The coinbase listing also enhances Stack’s visibility and liquidity, making it easier for institutions to trade and invest. It is one of the factors, but at the top of the list, and it depends on the project targeted markets and audience groups.
SNZ recently joined as an sBTC issuer, alongside other major investors like Jump and UTXO. Do institutional investors engage in peer discussions and conduct joint due diligence when reviewing investment opportunities? If so, what aspects of Stacks do you believe have attracted so many institutional investors to the ecosystem?
Leveraging its regulatory compliance and major CEX listing, Stacks can partner with deep-pocketed institutions by offering custody and staking solutions. It can further introduce BTC/DeFi protocols, such as Zest Protocol and Hemetica’s USDH, allowing advanced institutional participants to deploy Bitcoin capital into lending and stablecoin markets.
Educational programs and professional regional developer community engagement are also critical to building more trust in the ecosystem.
Stacks’ appeal certainly comes from its built-on-Bitcoin security, programmability, enhanced block times, regulatory compliance, and major CEX listing. That said, being a long-term supporter since the early days, SNZ believes compounding a strategic partnership over time will be more valuable and rewarding than focusing on short-term market volatilities.
What support does SNZ Holdings provide beyond investment in portfolio projects? Are there any notable technical or operational collaborations contributing to the growth of the Stacks ecosystem?
SNZ goes well beyond traditional investment by offering strategic advisory support that transforms portfolio projects into ecosystem builders. “Connect to Empower” is SNZ’s mission. Besides holding STX and participating in Stacks sBTC liquidity programs, SNZ actively engages with Stacks DeFi applications and Bitcoin communities, promotes the ecosystem vision, co-hosts events and activities, supports talent search, gathers developer communities’ interests and offers development resources as well as operating as a signer to support Stacks infrastructure.
In closing, what are the broader implications of Bitcoin's integration into DeFi ecosystems, and how might this reshape global financial systems, institutional investment strategies, and regulatory landscapes over the next decade?
Since the Taproot upgrade in 2021 opened the door for BTCFi, the transformative journey has begun to redefine Bitcoin’s role in finance beyond store of value. Bitcoin’s liquidity and programmability, unlocked via technological innovations, hold immense potential to further democratize finance, reduce reliance on intermediaries, and create a more inclusive and transparent global financial ecosystem.
With further improvements on BTCFi security, scalability, and regulatory clarity, institutions are likely to increase their exposure to the Bitcoin enabled DeFi ecosystem and introduce novel instruments over the next decade.
Bitcoin has evolved into a digital equivalent of gold, distinguished by its permissionless and decentralized nature as an alternative asset. The passage of the STABLE and GENIUS Acts this year is poised to reinforce the U.S. dollar's position within the traditional finance systems. Furthermore, these legislative developments are expected to foster a more conducive regulatory framework for BTCFi, thereby accelerating its growth and enhancing the long-term potential of the decentralized finance (DeFi) ecosystem.