CHAPTER 5 · PART D

   Who Loses
   If stablecoins win, somebody loses. A credible book names them.
   Western Union and MoneyGram. Their core business — charging 5-7% to move money across
   borders — is directly threatened. $58 billion in annual global remittance fees is the tax that
   stablecoins eliminate. They're adapting — WU launched USDPT, MoneyGram integrated USDC
   — but the high-margin fee model is dying. They may survive as off-ramp infrastructure. They
   won't survive as toll collectors.
   Correspondent banking chains. Deutsche Bank estimates $50-100 billion in annual
   correspondent banking revenue at risk by 2030. The six-hop chain that moves $200 from New
   York to Lagos — each intermediary taking a cut — becomes a single ledger transfer. Over 20%
   of correspondent banking relationships already cut since 2011. Stablecoins accelerate the
   collapse.
   FX brokers and retail currency traders. If people hold USD stablecoins instead of local
   currency, FX conversion revenue shrinks. The $7.5 trillion daily FX market won't disappear, but
   the retail FX markup of 3-5% on consumer transactions gets competed away.


   Central bank seigniorage in emerging markets. When Nigerians hold USDT instead of naira,
   the Central Bank of Nigeria loses seigniorage — the profit from issuing currency. Tether
   earned $13 billion+ in 2024 from reserves. That revenue used to accrue to governments.
   Standard Chartered: stablecoins could draw $1 trillion in emerging market bank deposits over
   three years. For small economies, this is an existential fiscal threat.
   Local currency stability. "Private re-dollarization" — citizens choosing digital dollars —
   weakens local currencies further, creating a vicious cycle. Governments lose monetary policy
   tools. What's rational for the individual is destabilizing for the collective.
   Traditional banks' deposit base. If users hold stablecoins in self-custody wallets instead of
   bank deposits, banks lose the cheap funding they use to make loans. The power dynamic
   shifts from "banks hold your money by default" to "banks compete for your money."
   Privacy. Every stablecoin transaction on a public blockchain is more traceable than cash. The
   informal cash economy — anonymous, untaxed — gets partially digitized. For people in
   authoritarian regimes, this could be worse than cash. For tax authorities, it's a windfall.
   Credit card fee margins. Visa and Mastercard charge 2-3% per transaction. Stablecoin
   payments cost less than $0.01. The networks won't die — they're integrating stablecoins —
   but their fee margins compress. They become routing layers, not toll collectors.


   These losses are real. The argument is that the gains outweigh them. But hiding the cost
   doesn't strengthen the case. It weakens it.