If software ate the world, stablecoins now command the stage, crafting new financial rules for the coming age.

The global financial system is on the brink of its most transformative shift since electronic banking emerged. Stablecoins — digital currencies pegged to traditional assets — have moved well beyond their cryptocurrency roots to become the bedrock of an entirely new financial architecture.

With annual transaction volumes rivaling traditional payment networks (an impressive $11.1 T) and market capitalizations exceeding $220 billion, stablecoins are not just a new financial instrument; they represent a fundamental reimagining of how value moves across the global economy.

Last year, we did a primer on stablecoins and shared why we believe it’s the future. Today, we are going to explore the structural implications of this shift and its potential impact on financial institutions, markets, and entire economic systems.

The New Financial Architecture

Today’s financial system still relies on a complex web of intermediaries, with each layer adding cost, delay, and friction to transactions. For example, a typical cross-border payment must navigate multiple correspondent banks, clearinghouses, and settlement systems — processes that can take days to complete and incur fees at every step.

This legacy architecture, designed in a pre-digital era, increasingly falls short of meeting the needs of a globalized, digital economy.

Enter stablecoins.

Stables are not merely a technological upgrade; they are a catalyst for a complete overhaul of financial infrastructure. By providing programmable, instantly settleable digital money, stablecoins bypass the need for numerous intermediaries and eliminate cumbersome reconciliation processes.

Today, their primary (yet changing) role is the exchange of value — driving remittances and payouts — but their potential reaches far deeper and further.

Our thesis is that stablecoins are set to rebuild finance from the ground up, extending their influence into every corner of the industry. From enhancing the operational efficiency of the office of the CFO and transforming capital markets to revolutionizing retail banking, lending, etc., this technology offers a unique opportunity for innovators and builders to redefine financial services.

And then to rebuild it.

Market Evolution and Network Effects

Recent market data underscores an accelerating adoption curve for stablecoins. Despite only about 7 million active users, transaction volumes have already reached parity with major card networks. This striking disparity — low user adoption paired with high transaction activity — signals robust institutional and commercial usage and hints at vast untapped potential.

A key driver behind this growth is the significant decline in transaction costs and settlement times (see excerpt from a16z report below). More importantly, each new participant adds value to the ecosystem, creating a self-reinforcing cycle of adoption that sets stablecoins apart from traditional payment networks, where regulatory and technical constraints might often limit such dynamics.

Let us now take a look at how these network effects will continue to transform and (r)evolutionize the key pillars of the financial services industry.

Global Payments & Remittances

Stablecoins emerged initially to tackle the inefficiencies of traditional cross-border payments and remittances. Today’s global payments infrastructure is often hampered by high fees, slow settlement times, and the complexity of multi-currency exchanges. Meanwhile, stablecoins — digital assets pegged to fiat currencies or baskets of assets — offer near-instantaneous settlement, lower transaction costs, and improved transparency. Their programmability enables automated compliance checks and smart contracts, further enhancing efficiency and security.

But the potential of stablecoins in the payments space goes far beyond mere money transfers.

They can serve as a digital representation of value, enabling micro-payments, automated microtransactions/payouts for content creators, and even programmable money that releases funds upon meeting specific conditions. For global remittances, stablecoins provide a solution to currency volatility in emerging markets, ensuring that funds hold their value even as they cross borders. As regulatory frameworks evolve, these digital assets could become a cornerstone of a new, more inclusive global financial system that reduces friction and increases financial accessibility for billions of unbanked or underbanked individuals.

Moreover, with the integration of blockchain, each transaction leaves an immutable trail that not only bolsters trust but also aids in compliance efforts across jurisdictions. That said, the future of global payments powered by stablecoins is not just about efficiency; it’s about reshaping the entire infrastructure to be more agile, transparent, and accessible.

Moving forward, the continued collaboration between traditional financial institutions and blockchain innovators will likely only accelerate adoption, making stablecoins a ubiquitous part of the global payment ecosystem.

Corporate Treasury & Cash Management

The role of stablecoins in corporate treasury functions represents one of the most transformative opportunities for enterprise finance. Traditionally, corporate treasuries grapple with the complexities of liquidity management, FX hedging, and inefficient cross-border transfers. With the advent of stablecoins, CFOs and treasurers now have a tool that can fundamentally change how companies manage their cash and execute financial operations.

Stablecoins offer the promise of real-time, borderless transactions, eliminating the lag inherent in traditional bank transfers and reducing reliance on intermediary banks. For multinational corporations, this means faster settlement of intercompany transactions, more effective liquidity management, and enhanced cash flow forecasting. On top of that, by holding a portion of their balance sheets in stablecoins, companies can hedge against volatile currency fluctuations while enjoying the benefits of digital transparency and programmability.

Key players such as JPMorgan have already begun exploring these possibilities with initiatives like JPM Coin, designed to facilitate instantaneous settlements within its network. Similarly, other major banks and fintech innovators are developing solutions that integrate stablecoins with enterprise resource planning (ERP) systems, enabling a seamless transition from legacy systems to a more digital, agile treasury model. This integration can therefore automate routine tasks such as reconciling payments, managing intercompany transfers, and even triggering automatic FX conversions based on preset conditions.

In addition to that, the programmability of stablecoins enables the implementation of smart contracts that can execute conditional payments — such as releasing funds when certain performance metrics are met or automating supplier payments based on delivery confirmations. This can hence significantly reduce administrative overhead and lower the risk of human error.

But beyond just operational efficiency, stablecoins also offer enhanced security and traceability through blockchain technology aka decentralized ledger. As we already know, every transaction is recorded on a tamper-proof ledger, which aids in internal audits and regulatory compliance.

Looking ahead, as corporations become increasingly digital, the ability to manage finances on decentralized, blockchain-based payments rails will become a critical competitive advantage, making stablecoins a foundational technology for the corporate treasury of the future.

Capital Markets & Asset Tokenization

As we have written earlier, stablecoins are set to revolutionize capital markets and the way assets are tokenized and traded. By serving as a stable, liquid medium of exchange, stablecoins can bridge the gap between traditional financial markets and the emerging world of digital assets. In the realm of capital markets, the tokenization of securities — ranging from equities and bonds to real estate — has the potential to democratize access, enhance liquidity, and reduce friction in the issuance and trading processes.

The ability to tokenize assets means that large, traditionally illiquid assets can be broken down into smaller, tradable units. Stablecoins here thus serve as the ideal medium for these transactions by providing a reliable, stable store of value that mitigates the volatility typically associated with cryptocurrencies.

Platforms like tZERO, Securitize (with BlackRock), and Polymath, or even giants like Franklin Templeton are already pioneering the tokenization of various asset classes, enabling fractional ownership and opening up investment opportunities to a broader audience.

For issuers, the use of stablecoins can streamline the settlement process, reduce counterparty risk, and cut down on the administrative overhead associated with clearing and settlement. For instance, when securities are tokenized, the entire process — from issuance to secondary trading — can occur on a blockchain, ensuring near-instant settlement and a significant reduction in the risk of default or counterparty issues.

Stablecoins here thus provide the necessary stability to ensure that these transactions are executed smoothly, without the unpredictable swings that might deter investors.

Moreover, stablecoins can also serve as collateral in margin trading and derivatives markets, providing a stable base for complex financial instruments. Their programmable nature also allows for innovative financial products such as automated dividend payments and dynamic interest-bearing tokens that adjust yields based on market conditions.

This isn’t theory or wishful thinking — institutional investors and regulators are beginning to take notice of this paradigm shift. As trust in blockchain technology increases and regulatory clarity improves, the integration of stablecoins into capital markets will lead to more efficient, transparent, and accessible trading systems.

Ultimately, the tokenization of assets — powered by stablecoins — will redefine market structures, making capital markets more inclusive and better aligned with the digital age.

Retail Banking & Consumer Finance

Stablecoins are not only poised to disrupt institutional finance but also to transform retail banking and consumer financial services. In an era where digital-first banking solutions are becoming the norm, stablecoins offer a new way to manage everyday financial transactions, from savings and payments to lending and micro-investing. Their inherent stability, coupled with the speed and security of blockchain, makes them an attractive alternative to traditional fiat accounts.

For consumers, stablecoins provide a bridge between the traditional financial system and the burgeoning world of digital assets. They offer a reliable store of value that can be easily transferred, spent, or saved without the volatility typically associated with cryptocurrencies like Bitcoin or Ethereum. FinTech innovators and challenger banks — such as Revolut, Chime, Nubank, or Klarna — have already integrated or currently are exploring ways to integrate stablecoins into their digital wallets, providing customers with real-time access to funds, seamless international transfers, and innovative payment solutions that operate around the clock.

The programmability of stablecoins also opens the door to automated financial services. Imagine savings accounts that automatically invest spare change, or lending platforms that offer immediate, peer-to-peer loans secured by stablecoin collateral — all executed via smart contracts. These innovations not only improve convenience but also reduce the friction and cost associated with traditional banking processes. For example, remittances and day-to-day payments can be executed with minimal fees and near-instantaneous settlement times, addressing common pain points such as high transaction fees and long processing delays. And they are global and run 24/7/365 by default.

Moreover, stablecoins can play a critical role in enhancing financial inclusion. In regions where access to traditional banking infrastructure is limited, stablecoins can enable a new generation of mobile-first financial services. By leveraging this technology, service providers can offer secure, low-cost banking solutions that reach underserved populations, thereby fostering economic growth and stability.

The same way M-Pesa transformed financial services in Africa setting a global standard for mobile payments, the same way we’re going to see stables transforming FinTech. But this time, globally from Day 1.

As regulatory frameworks evolve, and as more traditional banks and FinTech companies adopt stablecoin solutions, the consumer banking experience is likely to become more transparent, efficient, and inclusive.

Stablecoins therefore stand as a beacon for the future of retail banking — one where financial services are not just digitized, but reimagined to better serve the modern (& global) consumer’s needs.

Lending, Credit, & Investment Ecosystems

Lastly, the rise of stablecoins is fundamentally altering the landscape of lending, credit, and investment ecosystems. In traditional finance, the process of extending credit is often slow, opaque, and burdened by intermediaries. Stablecoins, with their digital-native infrastructure and design, offer a way to streamline these processes, making lending faster, more secure, and more accessible — both in centralized and decentralized contexts.

In the burgeoning field of decentralized finance (DeFi), stablecoins have already become indispensable. Platforms like Compound, Aave, and MakerDAO use stablecoins as the backbone for lending and borrowing operations. By serving as both the medium of exchange and a form of collateral, stablecoins thus enable protocols to offer competitive interest rates, reduce counterparty risks, and ensure that loans are backed by a relatively stable asset.

This integration has led to the creation of new financial products that cater to a wide range of investors, from individual retail participants to large institutional players.

But beyond the DeFi space, traditional financial institutions are taking notice as well. Banks and credit providers are beginning to experiment with stablecoin integration to enhance their lending platforms. The key advantage here lies in the ability to settle loans in real time, bypassing the delays inherent in conventional systems.

Moreover, the programmable nature of stablecoins allows for the automation of various aspects of the lending process. For instance, smart contracts can enforce loan terms automatically, trigger repayments based on preset conditions, and even manage collateral adjustments in response to market fluctuations — all without manual intervention.

Additionally, stablecoins also have the potential to transform credit scoring and risk assessment. By leveraging blockchain’s transparent ledger, lenders can access verifiable financial histories and transactional data, enabling more accurate and dynamic risk models. This could lead to a more efficient allocation of credit, particularly for underserved segments (or crypto/DeFi natives) that have traditionally been excluded from mainstream lending due to a lack of conventional credit histories.

In essence, the integration of stablecoins into lending and credit ecosystems offers the promise of lower operational costs, reduced risks, and enhanced accessibility.

Looking ahead, as traditional finance and DeFi continue to converge, stablecoins are positioned to become the linchpin that unites these disparate systems, driving innovation and fostering a more inclusive, efficient global credit market.

And this is what the global financial infrastructure inversion is all about.

The Spacemen From Pluto

Stablecoins represent not just an evolution, but a revolution — a moonshot opportunity to rebuild the world’s financial infrastructure as an internet-native technology. As we stand on the brink of this transformation, the potential for creating generation-defining companies is as real as it is exciting.

The journey ahead may be fraught with regulatory ambiguities and technical hurdles, yet these challenges serve as catalysts for innovation rather than roadblocks.

Just as “Back to the Future” (originally called “The Spaceman From Pluto”) challenged us to reimagine what’s possible, the advent of stablecoins invites us to take financial services truly online, creating a system that is more agile, transparent, and inclusive than anything seen before.

For centuries, financial services have operated in silos and offline. Today, we have the chance to bridge the gap between real-world use cases and the groundbreaking technologies that enable them.

Our optimism is not naive; it is a deep-seated belief in the power of collaboration between visionary founders and cutting-edge technology to reforge the economic landscape. As we invest in teams that are pioneering products on top of stablecoins, we are laying the groundwork for the next hundred years of financial innovation.

This is the frontier of finance, and the opportunities to shape a more efficient and equitable global economy are vast — truly a call to build the future of money in the digital age.

If software ate the world, stablecoins now command the stage,

Crafting new financial rules for the coming age.