Stablecoins were created as a bridge between fiat currency and the crypto economy. And for some time, that bridge held.
A Shift in Power in the World of Stablecoins
USDT from Tether has become the dominant trading pair on most exchanges, despite years of doubts about whether its reserves are truly backed 1:1 by US dollars or equivalent assets like short-term Treasury bills. $USDC from Circle followed suit, earning trust through greater transparency, regular audits, and growing partnerships with institutional investors.
Recently, Circle filed for an IPO, which reflects both its scale and its willingness to operate under regulatory oversight. DAI from MakerDAO offered a more decentralized approach, backed by crypto assets instead of fiat currencies. These models were imperfect but, to some extent, they aligned with the original values of this industry.
We are now witnessing the emergence of a new wave of stablecoins. Not from crypto-oriented developers but from large corporations and politically connected projects. Bank of America has openly stated that it is ready to launch a dollar-backed stablecoin as soon as it receives approval from regulators. PayPal has already launched PYUSD through Paxos, integrating it directly into PayPal and Venmo.
World Liberty Financial, backed by the Trump family and other politically connected investors, has launched $USD1 . It is marketed as fully backed by US Treasury securities and cash deposits, with BitGo serving as the custodian. Reports suggest that Binance has allocated $2 billion to support this initiative. Amazon and Walmart are also said to be exploring their own stablecoin initiatives, which could have far-reaching implications given their user base and retail influence.
We should expect many new stablecoin launches in the near future. The GENIUS bill, which passed the House of Representatives and is now moving towards a final vote in the Senate, aims to establish a clear regulatory framework for stablecoin issuers. It includes rules for full reserve backing, disclosure standards, licensing requirements, and annual audits for major players. If the bill is signed into law, it could provide banks, fintech companies, and major consumer brands with the regulatory clarity needed for a more aggressive market entry.
Some see this as a sign of progress. Stablecoins are going mainstream. Legacy institutions are finally catching up. But it's not that simple.
Just because a token is called a stablecoin does not mean it functions the same way. And when that label becomes more about marketing than mechanics, we have a problem. We have already experienced the collapse of Terra. It was not just a bad development. It was a failure to execute the hard work of transparency and risk management. That is the part that gets forgotten when major brands come in and assume trust by default.
It's not about restricting access. Let companies launch stablecoins. Let them compete. But do not confuse PayPal's coin with public utility. These are corporate products. They are created to achieve business goals, not necessarily for the interests of the broader crypto ecosystem.
If a stablecoin can freeze your funds, track your spending, or restrict how and where you use it, it is not an open financial instrument. It is a permissioned ledger with a friendlier interface. This may be acceptable for many users. But do not confuse this with progress.
The market will ultimately decide what wins. But before we trust, it is worth asking fundamental questions. Who controls the coin? How is it backed? Is it audited? Can it be seized from you?
