For years, questions were levied about what the "killer app" was for crypto. It turns out the answer was stablecoins.
In spite of regulatory uncertainty in the largest economy in the world, stablecoins are taking over. The digital world sees the value of having low cost, frictionless transactions. Crypto brought commerce to the Internet, something that was not native in the original protocols. The ability to transfer value was never built in.
Crypto changed this. Suddenly, the ability to conduct commercial and financial transactions was native to a network. There was no need for an application layer to facilitate this. The emergence of PayPal and other siloed systems showed how the Internet was turned upside down.
We are now seeing a reversal of that.
In this article we will dive into the explosion that is coming from stablecoins.
Stablecoins Are Taking Over The Internet
PayPal. Mastercard. Visa.
These are household names at this point. We see trillions of dollars in transactions being handled. According to Grok, in 2024, Visa processed $14.7T while Mastercard was responsible for $8.4T. Naturally, not all of this was done on the Internet. In fact, we know ecommerce is only a fraction of the whole.
That said, we are seeing stablecoins take over online payments. In fact, traditional entities such as PayPal and Stripe incorporated them into their operations.
Companies like PayPal and Stripe are integrating stablecoins to leverage onchain infrastructure, enabling faster and cheaper transactions. “They’ve already surpassed Visa and Mastercard in on-chain volume by 7%,” Hurwitz noted, signaling a decisive shift in how money moves online.
My guess is this is still the early stages. Stablecoins are still rather novel. We have roughly $250 billion issued. With the passage of the GENIUS Act, the expectation is they will blossom into the trillions.
Financial institutions along with Big Tech and retailers will eventually be involved. It is likely they are going to be issuing their own stablecoins, furthering the adoption on their platforms.
When this happens, we can expected the already increasing numbers to skyrocket. Each platform will default to a stablecoin payment.
Tokenization Is Underway
The tokenization of everything is underway. We are going to see the conversion of even real world assets occurring in the next few years.
Driving this are the benefits provided by stablecoins. We cannot deny the efficiency gains made, something that comes with it being native to these networks.
Hurwitz said that stablecoins make money “cheap, fast, global, and secure to transfer.” These features have made them popular for various purposes, with broad adoption emerging across cross-border payments and prediction markets like Polymarket.
We are also watching the transition of money happening before our eyes. This occurred a number of times over the last 100 years, albeit at a slower pace in the past.
For example, the move from physical cash to digital payments took place of a few decades. Part of this move was generational. We still have older generations (Boomers) still using cash and checks as compared to payment apps which were adopted by the Millennials.
Crypto is following this trend yet at a faster pace.
He added that stablecoins have become massive buyers of US Treasurys, with Tether (USDT) alone generating $13 billion in profits last year while holding around $113 billion in US debt. “Tokenized money is the base of the tokenized financial system,” Hurwitz said, calling recent financial innovation built on this foundation “exciting.”
The last sentence is key. We are witnessing a remaking of the entire financial system. To complete, this is going to take some time. For now, we are seeing a hybrid system forming. That said, new rails are being established with payments being the first major sector to see the shift.
Over the next 24 month, the payment system will be completely redone. My guess is that we see the overwhelming majority of digital transactions done using stablecoins by the end of 2027. All financial institutions will have them standard.
Internet payments will likely occur sooner since it is already digital in nature. After all, crypto never existed anywhere but online.