Cutting through crypto hype to reimagine movement of money

It is a common fallacy to view the cryptocurrency sector solely through the lens of price performance and fixed supply mechanisms. While headlines will focus obsessively on prices, the most transformative developments in crypto right now is not about price performance, it’s about how blockchains and smart contracts can be used to manage payments and financial services. And for those services, stablecoins are the most used assets.

The regulatory clarity for stablecoins now emerging on both sides of the Atlantic represents a paradigm shift that will fundamentally reshape global finance, moving beyond the speculative trading that has dominated crypto’s first decade. This will result in wide adoption of stablecoins, and a growing focus on how best to utilise the new blockchain-based payment rails. With more attention on the role of smart contracts and the programmability of money, platforms like Ethereum, as well as new initiatives from financial institutions, will take focus from the digital gold narrative of bitcoin.

Wildfire vision

When Vitalik Buterin and crew laid out the vision for Ethereum, they weren’t just creating another cryptocurrency to mimic bitcoin. They were architecting a network that could function as a transparent “world computer”, capable of handling programmable money and complex financial logic, without a central coordinator. This vision spread like wildfire worldwide, spawning an entire ecosystem of financial protocols that operate entirely on blockchain infrastructure. North of $150bn of assets are deployed this way, with smart contract-based exchanges processing around $40bn per day. Yet for years, this ecosystem has operated primarily with its own native digital assets, creating closed loops that remained largely isolated from traditional finance.

The first assets with ‘real world value’ in this space came with initiatives to tokenise dollar deposits, solving the fundamental problem of how to offer the stability and familiarity of the US dollar in a blockchain environment, to anyone with an internet connection.  

Tether, issuer of USDT, the world’s largest stablecoin, has turned this into the most successful business ever in history, with $93m of revenue per employee. No other company comes close.

The success of these stablecoins came despite severe regulatory uncertainty. With Europe’s MiCA regulation and America’s GENIUS Act, more risk averse actors will compete for this business, without risking lawsuits.

In fact, the regulatory environment has shifted dramatically in the opposite direction. US lawmakers are now actively looking to expand the global distribution of the US dollar through these digital channels, recognising that stablecoins create sustained demand for US Treasuries.

The legislation reinforces dollar dominance by requiring stablecoins to be backed by US Treasuries, creating demand for government debt that supports both the dollar’s reserve currency status and America’s borrowing capacity.

However, stablecoins come with a big drawback for end users — they are not supposed to pay any interest. MiCA prohibits both issuers and service providers from granting interest to stablecoin holders, ensuring that yields from the assets backing the coins, all goes to the issuer. The GENIUS Act on the other hand, while prohibiting issuers from paying interest directly, doesn’t prevent related service providers from making interest payments.

This ‘loophole’ is likely to be exploited, as we have already seen with Coinbase paying interest to holders of Circle’s USDC. Banks have already raised complaints about this “mistake”, eager to see laws protecting their revenue.

Innovation race

These regulatory frameworks have already catalysed a massive innovation race. JP Morgan, Fidelity, Stripe, Société Générale, PayPal and others, are already deeply into the stablecoin industry. But as always in crypto, not all assets are created equal.

When focus is on transaction speed and low cost, these institutions often choose to opt for a ‘shared corporate database’, where censorship is a feature, not a bug, making them distinctly different from public, decentralised blockchains. However, if the use-case is to conduct business only in stablecoins, a corporate-controlled chain works. After all, stablecoins can always be censored by the issuer, even if held on Ethereum or bitcoin.

The years ahead will show if such privately controlled environments focused on tokenised assets will be able to compete with the public, trustless chains with native assets at their core.

The third champion in this duel is Central Bank Digital Currency (CBDC), which will now face severe competition from regulated stablecoins, and will lag even more behind, if and when they are launched. Although democratic governments have now put in place regulatory guardrails for private sector initiatives, it’s not so obvious that they dare to innovate and design their own assets and networks, which is why there will likely be some time before we see CBDCs at scale.

Expected boom

No matter how it’s done, dollar tokenisation opens the door for programmable treasury management, self-executing risk systems, instant international payments, capital-owning AI-agents, and more. Unlike the speculative crypto cycles of the past, these innovations are based on solid regulatory foundations, institutional-grade infrastructure, and clear economic incentives. It’s time to reimagine how money moves, settles, and integrates with everyday business.

Oskar Åslund, Chief Strategy Officer, AKJ