Stablecoins are inherently designed to be steady and to speed up transactions. Blocking them will simply push digital finance into less transparent channels. Critics of stablecoins often point to volatility, political influence, or misuse. Those concerns were shaped by the early days of digital assets. Today, however, they risk obscuring how far asset-backed stablecoins have evolved, and the role they are increasingly playing in modernizing payments infrastructure.
These instruments are designed to prioritize price stability and settlement efficiency, typically through high-quality reserves such as cash or short-dated government securities. Like any financial instrument, they introduce new considerations around governance, liquidity, and oversight. But these concerns are already being addressed by the market. The greater risk lies in failing to integrate these tools into a regulatory framework that can revolutionize legacy payments systems that are increasingly misaligned with a digital economy.
Stablecoins did not emerge to privatize money or undermine central banks. They emerged because global payments infrastructure, particularly for cross-border transactions, remains slow, opaque and unreliable, even between advanced economies. When transferring dollars from New York to London takes days, carries fees, and offers little transparency, markets will inevitably seek better tools.
Critics frame these instruments as an effort to replace sovereign money. In reality, they are enabling reforms. Payments, securities and settlements are increasingly moving onto shared digital ledgers. Stablecoins act as the liquid layer that connects these systems. They do not compete with fiat currency; they make it functional in a digital environment.
That distinction is starting to register in the mainstream. YouTube recently added stablecoin payouts for US creators through PayPal’s PYUSD. This step is emblematic of a deeper shift. The world’s leading platforms are increasingly adopting stablecoins which are designed for speed, predictability and regulatory compliance.
The broader trend is undeniable. Throughout 2025, stablecoins have evolved to become the fastest and most cost-effective way to send a dollar to almost anywhere in the world. They have become the backbone of the on-chain economy, facilitating more than $8.9 trillion in on-chain volume this year alone, surpassing PayPal’s throughput and approaching half of Visa’s. This is not speculative trading. It is real payment activity serving creators, businesses and institutions across borders.
The rise of USD1 is a case in point. Fully backed by US Treasury bills and issued by World Liberty Financial, USD1 is now integrated into Binance, the world’s largest crypto exchange. Binance has replaced its reserves with USD1 and has enabled fee-free trading between it and other majors like USDT and USDC. This marks one of the biggest transitions in stablecoin frameworks to date. It also acknowledges that not all stablecoins are equal, and that those with transparency, compliance and institutional-grade reserves are the ones to stay.
Some stablecoins still have flaws. But flaws have never been a reason to simply dismiss the model. They are opportunities to learn and improve. Flaws are a reason to regulate, and the US GENIUS Act is a step in that direction; introducing clear criteria for reserve quality, redemption rights and disclosure. European regulators are moving in the same direction, launching initiatives like Qivalis, a euro-denominated stablecoin developed by a consortium of major banks.
Concerns that dollar-backed digital assets will reinforce US dollar dominance miss the bigger picture. The dollar already anchors global trade and finance. Stablecoins simply mirror that reality in digital form. Blocking them will not reduce dollar reliance. It will only push activity into less transparent, less regulated channels. A more effective strategy is to support compliant options across multiple currencies under consistent international standards.
These innovations are not rivals to the financial system but essential to its inevitable modernization. As capital markets migrate onto tokenized platforms, assets for digital settlement are increasingly necessary. Banks are already developing tokenized deposits to meet this demand. Stablecoins complement these efforts by providing open, interoperable liquidity across ecosystems.
The real danger is that regulators will stall progress by treating innovation as risk. Innovation without guardrails is risky. But regulation without innovation preserves inefficiency. The more constructive path is to establish high standards and to support stablecoins that meet them.
Stablecoins will not replace central banks. They will not eliminate the need for regulation. But they are already improving how money moves, making global finance faster, cheaper and more accessible; and in doing so, they are helping to bring the financial system into the 21st century.
Bobby Zhou is a Founding Partner at Aqua Labs.