Written by: Chris Dixon, General Partner at a16z
Compiled by: Block unicorn
The internet has globalized information, and cryptocurrencies are having a similar impact on currencies. While recent headlines may focus on the price of Bitcoin, a deeper and more lasting transformation is taking place in the digital payments sector. This year, stablecoins—cryptocurrencies pegged to assets such as the US dollar—are increasingly becoming the mainstream choice for online and international payments.
This could be called the "WhatsApp moment" of the monetary world. Just as messaging apps like WhatsApp reduced the cost of international text messaging from around 30 cents per message to zero, stablecoins are playing a similar role in financial transactions. Data confirms this: last year, after excluding bots and other irrational transactions, stablecoin trading volume exceeded $12 trillion—approaching Visa's $17 trillion trading volume last year, but at a much lower cost.
In this process, stablecoins are bringing the internet's original vision of openness and interoperability to the financial sector. Given that blockchain technology allows stablecoins to be programmed, currency is essentially becoming software.
While most stablecoin transactions currently originate from "crypto-native" and global business activities rather than everyday consumer spending, this is changing. With the rollout of improvements, such as integrations with more traditional financial partners aimed at making transactions more convenient for users, widespread adoption of stablecoins is on the horizon.
People around the world rarely realize they're using stablecoins when transacting. Most people think they're just using US dollars. And that's true, because the distinction between stablecoins and the dollar has become incredibly abstract for end-users. Since each token is backed by one dollar or its equivalent, the name itself doesn't matter. What matters is that the product is more reliable than any previous payment technology, virtually free, and settles much faster—almost instantly.
Stablecoins have also demonstrated the immense potential that comes from a synergy between policy and technology. Last year's Genius Act established clear rules for stablecoins in the United States. More importantly, Congress is currently considering the Clarity Act, which aims to regulate the broader blockchain networks and digital asset ecosystem that underpin stablecoins. The Clarity Act will help determine whether these networks can scale to become part of the global financial infrastructure or stagnate. Markets exert their magical power when they provide a level playing field and space for innovation for challengers. The internet used this power to defeat traditional giants; the United States used this power to dominate the internet; and stablecoins will use this power to surpass today's payment system.
Businesses have begun to recognize the advantages of stablecoins. Some of the world's largest tech companies, banks, and retailers are actively promoting stablecoin adoption, or, like Fidelity, have already issued their own. Payment giant Stripe, which has acquired several cryptocurrency companies over the past year or so, now supports stablecoins at checkout, instantly reducing payment processing fees from about 3% to 1.5%, with significant room for further reduction. SpaceX is using stablecoins to move funds out of countries with fragile local banking systems or strict capital controls, such as Argentina and Nigeria. Some companies are using stablecoins to pay their global employees faster. Ultimately, the internet may transform into an open marketplace where machine-to-machine transactions flourish, and AI agents conduct transactions and settlements on behalf of users in real time.
The proliferation of stablecoins also generates an often underestimated second-order effect: these tokens solidify the dollar's dominance in a multipolar world, creating robust new demand for U.S. Treasury bonds. Leading stablecoin issuers like Circle and Tether already directly hold nearly $140 billion in short-term U.S. government bonds, placing them among the top 20 holders of U.S. Treasury bonds today. If stablecoin adoption continues at its current pace, stablecoin holdings could jump into the top 10 by next year. (Citigroup even predicts that by 2030, stablecoins could hold more U.S. Treasury bonds than foreign governments and commercial banks.)
This is not just about payments; it's about reshaping the global financial landscape. The internet enables borderless communication, while stablecoins enable borderless value transfers. Provided there are clear rules and a sound market structure, they can become the conduits and pillars of the new financial system.
