Copyright Forbes
For years, cryptocurrencies and other digital assets have been too volatile to be trusted, too resilient to be ignored. The average investor who has tried to tune out the noise can be forgiven their bemusement at the argot of decentralized finance. But it would be a mistake to overlook this space these days. Opacity, hype, and panic are often found in the digital asset economy, but that is true for every transformative technology. What is most important today is that the US government is bringing some much-needed regulatory clarity to the cryptoverse. Stablecoins, often overshadowed by the volatility of crypto markets, are emerging as the quiet infrastructure shift behind the next wave of global finance, fintech, and payments technology. They are not instruments of speculation, but of settlement. Far from speculative tokens, stablecoins represent a structural transformation in the global payments system. Investors can no longer afford to ignore them. Money without Friction The earliest evangelists of Bitcoin imagined using the blockchain to summon into being a monetary system beyond the reach of fiat currencies, central banks, and all the messiness and compromises of the traditional financial system. While that dream has not come to fruition, many have experimented with how blockchain ledgers can revolutionize the financial system. Hence the rise of the stablecoin: a digital representation of fiat money, moving not through the clogged arteries of traditional payments rails but across the incorruptible circuitry of the blockchain. They represent a productive synthesis: the venerable faith once reposed in sovereign debt and central banks now conjoined with the austere precision and instantaneity of computer code. “Stablecoin money is, for the first time, letting people transact the same way they message on WhatsApp" said Circle Chief Executive Jeremy Allaire, whose company issues the world’s second-largest stablecoin, USDC. Traditional payments rails such as ACH or SWIFT were built for a slower, bank-centric era. Because they operate on open blockchain networks, stablecoins greatly reduce friction: transfers settle globally in seconds, at near-zero cost, at any time. By removing intermediaries, stablecoins expand financial inclusion. They let anyone with a smartphone hold and transfer digital dollars in their digital wallet, cutting remittance fees and democratizing access to stable stores of value. MORE FOR YOU GENIUS ACT is Inflection Point In July 2025, US President Donald Trump signed the GENIUS Act into law, creating a sturdy regulatory platform on which stablecoin ecosystems can be built. Previously, stablecoins claimed they were backed by cash, cash equivalents, or an algorithmic contraption that preserved their value in the face of market turmoil. Unfortunately, there are plenty of examples where these assurances proved untrustworthy. The GENIUS Act changes the landscape. Under its provisions, payment stablecoin issued within the United States must maintain a full 1:1 backing of outstanding coins with high-quality, liquid reserve assets; they must publish monthly disclosures of reserve composition and undergo independent audits for larger issuers. As a report from McKinsey & Co. observed back in June, “stablecoin circulation has doubled over the past 18 months but still facilitates…less than 1 percent of global money flows.” With increased interest in stablecoins beyond niche crypto markets, stablecoins could rapidly grow as a share of the global payments economy. Traditional players eager to maintain their dominance in a rapidly evolving landscape, from JP Morgan to Visa to Zelle, have begun issuing, or will soon issue their own stablecoins. As more jurisdictions, including the EU, the UK, Hong Kong, and Japan, begin to implement stablecoin regulations, it is reasonable to assume that stablecoins will only grow more important as an asset class in the years ahead. Stablecoins Bringing New Entrants into Payments Markets “Stablecoins are reshaping the financial architecture by creating a bridge between traditional finance and the on-chain economy: bringing real-time settlement, programmable liquidity, and access to tokenized assets that extend from treasuries to infrastructure,” said Rabat Tan, an experienced asset manager. “They’re not a side experiment; they’re the rails on which the next generation of global capital markets will run.” Mr. Tan has seen his clients expressing increased interest in how stablecoins offer a new investment vehicle for exciting returns. Plenty of new companies are leaping at the opportunities provided by stablecoins, using the newfound regulatory framework to gain credibility by going public in the US. Circle, which went public in June 2025, has been issuing stablecoins, with its dollar-backed stablecoin USDC growing to ~$75 billion. As mentioned in their S-1 IPO prospectus, Circle is looking to build the “largest and most widely used stablecoin network in the world,” which will include “protocols that applications and developers build on top of and integrate.” Through its Mint service, Circle offers carefully screened institutional customers the ability to issue and redeem USDC, who in turn offer myriad benefits for end users. As I have previously argued, Circle’s IPO would help foster an “ecosystem where the speed, cost, and access of blockchain commerce unlocks global prosperity.” Mr. Tan is also taking advantage of the increased interest in stablecoins catalyzed by the GENIUS Act. Through his U.S. registered investment advisory platform, Mr. Tan is launching CoinBridge, a cross-border digital-asset wealth management platform that gives global investors access to yield-driven tokenized real-world assets (RWAs). CoinBridge will provide seamless fiat on-ramp via stablecoins and access to yield-driven RWAs and advise on tokenization for asset originators to close the loop between off-chain value and on-chain liquidity, leading the next wave of blockchain finance. What if Stablecoins Aren’t Stable? Groundbreaking technologies always carry their risks, as creative destruction and blind optimism can lead investors, regulators, and the general public to overlook perils until too late. We do not need to rehearse the litany of previous scams and frauds from railroads to the dotcom bubble to be cognizant of various harms which stablecoins may facilitate. First, there are concerns about how effectively regulations will be enforced. In this rapidly growing financial ecosystem, bad actors - e.g. rogue states, terrorists, or crime syndicates - may take advantage of the speed and anonymity of stablecoins to raise and move illicit funds. The recent presidential pardon of Changpeng Zhao, who pleaded guilty to failing to maintain an effective anti-money laundering (AML) program while CEO of the world’s largest crypto exchange, suggests the current administration may be insufficiently diligent in rooting out bad actors. Additionally, audits must be sufficiently robust to ensure payments stablecoins will actually maintain their USD peg under pressure. While the GENIUS Act has provisions ensuring that “an insolvent payment stablecoin issuer that is not a subsidiary of a depository institution will be resolved using US bankruptcy law and thus excluded from federal deposit insurance,” one needs to only remember the collapse of Silicon Valley Bank in 2023 to realize the US government can be extremely flexible when overall financial system stability comes into play. If stablecoins become large enough to affect overall markets (as US Treasury Secretary Scott Bessent hopes), a taxpayer-funded bailout could occur, with all of the ensuing financial, economic, and political ramifications. To prevent moral hazard, policymakers and regulators must credibly commit to not turn a blind-eye to or rescue irresponsible actors in the sector. The Final Verdict: Promise and Peril
