Strip away the crypto noise and a stablecoin is one idea: a digital IOU for a real dollar, moving on rails that never close. $320B+ of them now circulate — and the interesting part isn't the technology. It's who earns the interest.
The whole life of a stablecoin dollar, in three legs. Note where it's instant and nearly free — and where the old world (and its fees) reappears.
A regulated dollar stablecoin like USDC is backed (post-GENIUS Act, by law) 1:1 with cash and short-term Treasuries. USDT, the largest, is issued by an offshore company on a contested compliance path whose past attestations have included other assets — same mechanic, different rulebook. Either way you hold the token; the issuer holds the T-bills and keeps the interest. At ~$190B of USDT earning ~4–5%, Tether became one of the most profitable companies per employee on earth. The product is free; the float is the business.
The 2025 US law — implementing rules proposed in early 2026, full effect by January 2027 — requires 100% high-quality liquid reserves, regular audits, and licensed issuers. Translation: stablecoins got the money-market-fund rulebook. The EU's MiCA did similar in 2024. Regulation didn't kill the product — it invited the banks in.
Raw on-chain volume (~$46T in 2025) gets compared to Visa — but much of it is bots, exchange shuffling, and the same dollar lapping the track. Adjusted "organic" volume is far smaller, though still trillions and growing fast. Both things are true: the hype inflates it, and it's still enormous.
Terra/UST (2022): an "algorithmic" stablecoin backed by confidence instead of collateral — $40B+ evaporated in a week. USDC (March 2023): briefly traded at $0.87 when Circle disclosed reserves stuck in Silicon Valley Bank — even real collateral has bank risk. Every rule now on the books traces back to one of these two weekends.
Day-to-day retail payments? Rare — cards and instant rails are already good. The real demand: B2B cross-border settlement (treasury moving money on weekends), dollar savings in high-inflation economies — Sofía in Buenos Aires converts part of her paycheck to digital dollars the day she's paid, before the peso can lose more value — and exchange plumbing. Stablecoins win where local rails are weak or the local currency is weaker.
Visa and Mastercard settle some flows in USDC; PayPal issued PYUSD; banks are piloting deposit tokens; payment processors quietly added stablecoin payouts. The pattern from every chapter repeats: new rails don't replace the old ones — they get absorbed by whoever owns distribution.
The $1,000 to Mumbai took the SWIFT chain and arrived $65 lighter. Same journey by stablecoin — honest version, ramps included:
The middle leg — the actual border crossing — costs cents and takes seconds, against $40 and days for correspondent banking. But the ends are where the fight is: getting local money into stablecoins (on-ramp) and out (off-ramp, with FX) still costs real money and needs licenses, compliance, and local bank partners. The disruptors aren't competing on the blockchain; they're competing on the ramps.
The reserve-desk view: attestation vs audit, how depegs actually unfold, redemption mechanics, and the CBDC question.