Right now there is a lot of hype around stubcoins. After Stripe’s $1.1 billion acquisition of Bridge last year, everyone from startups to major banks is looking to take part in the action. Crypto VC recently told me that in the past few weeks I’ve heard 15 pitches for Stablecoin startups. But beneath the hype there is a powerful truth. Stubcoin is a transformative technology that is already reshaping the global payment environment and will play a pivotal geopolitical role by strengthening the US dollar’s status as a global outstanding currency.
Skeptics are tempted to condemn this as just another crypto fad. I’ve been in the industry since 2013, so I’ve seen the story rise and fall. First of all, it was “Bitcoin for the Bank.” This is a proposition that became blank after the FDIC revealed that Americans remained unbanked, not due to technical barriers. The NFT bubble came after seeing speculators pay more than $1 million for “boring apes,” helping sites like Opensea make more than $60 million in revenue each month. Who thought it was not sustainable to spend millions of dollars on digital monkeys to display at your Art Basel House party?
But the stubcoin is more than a story. Stablecoin is a digital currency fixed in the U.S. dollar, usually US dollars, and is designed to provide price stability while maintaining the benefits of crypto.
Demand is only accelerating in emerging markets, especially in sub-Saharan Africa, with an average fee paying the top 8%, the most expensive in the world. According to Chain Orisis’s 2024 Global Crypto Adoption Index, Nigeria ranks second globally for crypto adoption, with five other African countries cracking the top 20 in the world in the past four years. I’ve heard from customers on a daily basis that driving a duffle bag across the border rather than sending wire transfers within the continent before the yellow card allowed for payment of stubcoins on the continent.
But this is not just about payments. It’s financial.
Stablecoins are strengthening the role of dollars overseas when there is a lot of speculation about the future. As global tensions rise, tariffs rise and countries talk about exploring dollar alternatives, the US financial system is facing an increase in fragmentation. In this environment, Stablecoins do things that traditional finance cannot do. This is to maintain a fluid, useful dollar that is relevant to real people and businesses around the world.
The story continues