It’s not every day you get to watch the financial system reinvent itself in real time, but stablecoins are making that happen—and the next five to ten years promise to redefine the financial system. The US reasserted a global leadership role last week when President Trump signed the Guiding and Establishing National Innovation in the U.S. Stablecoins (GENIUS) Act. This came one day after the House gave final congressional approval with a significant bipartisan vote, as 102 Democrats joined 206 Republicans. The question isn’t just whether stablecoins will stick around; it’s now who will control them, how they’ll be used, and what happens to the rest of the world when everyone wants a piece.
GENIUS is significant for DeFi as well in that it recognizes decentralized blockchain networks as base layer infrastructure in a dollar-backed global financial system and protects peer-to-peer transactions. Stablecoins are a critical feature of onchain financial markets and used for swapping tokens on decentralized protocols, providing DeFi liquidity, spending, remittances, or transacting peer-to-peer. Simply said, stablecoins play a critical role in onchain digital asset markets, and now we have a regulatory framework that creates guardrails and confidence in the largest global financial markets system.
Stablecoins in the US
Stablecoins don’t just replicate the stability of the US dollar—they supercharge it, giving the dollar unprecedented speed, programmability, and reach in both domestic and global markets. While the US dollar already underpins the world’s financial system, its potential is hamstrung by legacy payment rails and slow settlement times. By moving the dollar onto blockchain infrastructure, stablecoins reduce operational risk, lower transaction fees, and eliminate the delays of traditional banking. For businesses, this means real-time payroll and instant settlement; for consumers, it translates into fewer hidden charges and faster access to funds. Imagine if Walmart or Amazon began accepting stablecoins: they could offer layaway plans at 3% interest instead of the standard 8%, simply by eliminating outdated payment networks and their associated costs. Or picture these retail giants paying their entire workforce in real time, hour by hour, rather than every two weeks—transforming how millions of people manage cash flow and handle day-to-day expenses. Ultimately, instead of replacing the dollar, stablecoins transform it into a more powerful, universally accessible financial tool—modernizing the dollar for a new era of efficiency, innovation, and inclusivity.
The Global Demand for Dollar Stability
A globally used dollar stablecoin brings with it a complex web of conflicting forces that pit efficiency, innovation, and personal financial security against the deeply held priorities of national sovereignty and policy autonomy. For citizens and businesses in countries with volatile local currencies, dollar stablecoins are a source of immediate financial stability, offering a safe haven from hyperinflation and unpredictable market swings. Multinational companies and global consumers benefit from near-instantaneous, low-fee, cross-border payments, helping power economic inclusion and trade. Yet, this very efficiency concentrates economic power and data with the issuers of these stablecoins—often large US-based entities—and, by extension, with the US government and regulatory apparatus. As stablecoins assume a larger role, local central banks begin to lose critical levers of control: they can no longer shape the money supply, guide interest rates, or enforce capital controls with the same effectiveness. The threat of de facto “dollarization” means that entire economies risk becoming satellites of the US monetary system, unable to respond to local crises or to set independent macroeconomic policy.
At the same time, the global spread of dollar stablecoins appeals to those seeking the perceived security, trust, and liquidity that the US dollar has long represented. However, this raises uncomfortable questions about equity and resilience within the international financial system. Should domestic economies yield monetary control for stability, or fight to maintain autonomy at the price of efficiency and personal security for their citizens? Furthermore, reliance on a single dominant stablecoin could exacerbate centralization, increase systemic risk, and make economies dangerously dependent.
The key, then, is to acknowledge both the enormous utility and the potential dangers of a one-size-fits-all solution. By viewing the global reach of the dollar not just as a tool of economic dominance but as a form of risk management for participating countries, it is possible to imagine a smarter system. For example, countries that are especially vulnerable to market shocks could adopt a hybrid pegging or utility mechanism, officially allowing dollar stablecoins to operate alongside the local currency. These stablecoins could serve as an emergency fallback for both public and private sectors, without fully supplanting the sovereign currency; during times of volatility, citizens could temporarily shelter in dollar stablecoins, while sound periods would privilege the domestic currency.
Stablecoins Will Replace Fiat
Stablecoins have the potential to fundamentally replace traditional fiat by bridging the gap between physical cash and digital bank entries, offering a near-perfect blend of instant accessibility, peer-to-peer transferability, and global programmability. While cash and digital dollars in bank accounts were once truly fungible, modern banking has introduced barriers like delays, fees, and limits that erode this interchangeability. Stablecoins, existing on distributed ledgers, restore and even enhance this fungibility—making a digital dollar usable anywhere, anytime, without reliance on local banks or payment cutoffs.
If stablecoins become the default, the need for physical fiat would diminish, as digital assets could move freely, be self-custodied, and interact seamlessly with programmable financial systems. The link to US Treasuries that currently anchors stablecoins could even pave the way for a transformed public debt market, where tokenized bonds and fully digital dollars circulate in an ecosystem far more efficient and resilient than today’s. In this light, stablecoins not only can—but likely will—replace many fiat functions, heralding a new era in how money is held, moved, and trusted.
On-the-Ground Reality: From Coffee to Credit
The new reality: where stablecoins have seamlessly replaced cash and digital bank dollars, reshaping not just payments, but how value itself moves around the world. Your daily coffee runs on USDC, not because it’s trendy, but because it’s instant and almost frictionless. Payroll isn’t biweekly; it’s hour-by-hour, always-on, settling in real time straight to your self-custodied wallet. Retail giants pass savings directly to customers, and global commerce happens at the speed of code—not wire transfers. What matters now is who sets the standards, manages the rails, and calls the shots. If the dollar remains at the core, the U.S. can continue to shape this digital era; if not, someone else will. Stablecoins are here, and they’re changing everything. But the next decade? Make no mistake—it's going to be a sprint, not a marathon. And the finish line is a whole new financial system.