The Rise of Stablecoins

Perspectives – September 17, 2025

The rise of stablecoins is disrupting the global monetary system. Stablecoins, which are digital currencies pegged 1:1 to fiat currencies (e.g., the U.S. dollar), are rapidly transforming the global payment landscape by leveraging blockchain technology for fast, secure, and low-cost transactions. Unlike volatile cryptocurrencies, stablecoins such as Tether’s USDT and Circle’s USDC maintain stable value through their backing by U.S. Treasury bills, cash, short-term commercial paper and other relatively secure investments. This allows for near-instantaneous trade settlements at a fraction of the cost of traditional systems (e.g., SWIFT or CIPS). The recent passage of the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act in the United States establishes a robust legal framework for stablecoin issuance and regulation, mandating 1:1 backing with high-quality reserves. This legislation, alongside the Crypto-Asset National Security Enhancement and Liability for Investors and Transparency (CLARITY) Act and the Central Bank Digital Currency (CBDC) AntiSurveillance State Act, strengthens the U.S. dollar’s role as the world’s reserve currency while fostering innovation in digital payments. Stablecoins are increasingly adopted for international trade and commercial transactions, offering significant cost savings and efficiency over conventional banking systems.