CHAPTER 4 · PART B
The Convergence: Who's Building This and Why Now
In 2024, stablecoins processed $27.6 trillion in on-chain volume. That's more than Visa and
Mastercard combined — by 7.7%. By late 2025, annual volumes exceeded $50 trillion. PayPal's
entire 2024 payment volume was less than 5% of stablecoin volume.
This isn't a crypto-native phenomenon anymore. The biggest financial institutions on Earth
are in. And they're in because five specific structural forces converged between 2024 and 2026
to create an inflection point that none of them could ignore.
Force 1: The Rules Finally Arrived
After years of regulatory ambiguity, stablecoin rules crystallized across the world's major
economies — nearly simultaneously.
The EU's MiCA framework took effect in mid-2024. Japan amended its Payment Services Act in
2023. The UAE's VARA launched in June 2024. Hong Kong's licensing regime went live in 2025.
Singapore tightened reserve requirements under MAS.
And in June 2025, the United States passed the GENIUS Act — the first federal law regulating
payment stablecoins. Full reserves in approved assets. Monthly attestations. Clear redemption
rights. Three pathways: federal OCC license, state license, or compliant foreign issuer.
Unlicensed issuance becomes illegal.
Former CFTC Chair Giancarlo: "There was no familiarity with stablecoins in 2019. Now there's
been extensive public work and lobbying. The world has changed."
This is the inflection. Rules turned stablecoins from a Wild West experiment into a governed
financial product. Large institutions won't enter without regulatory clarity — and now they
have it.
Force 2: The Survivors Got Stronger
Terra collapsed in May 2022. $60 billion vaporized. FTX imploded in November. Celsius froze
withdrawals. The crypto credit crisis wiped out billions in retail savings.
The surviving stablecoins got stronger. Tether eliminated all commercial paper by end-2022
and moved to US Treasury bills. Circle published daily reserve reports. The market
consolidated around "fully backed" as the winning design.
USDC survived its own stress test: when Silicon Valley Bank collapsed in March 2023, Circle
had $3.3 billion stuck there. USDC dropped to $0.87. Within 72 hours, after the FDIC
backstopped deposits, it recovered to $1.00. The market interpreted this not as a failure but as
a stress test passed.
By 2024, stablecoin users were battle-tested and more discerning. The narrative shifted from
"are stablecoins safe?" to "stablecoins proved their worth in the storm."
Force 3: Interest Rates Changed Everything
5% Treasury yields transformed the economics of stablecoin issuance overnight.
Tether earned $6.2 billion in profit in 2023 from roughly $80 billion in reserves. About 100
employees making 72% of Morgan Stanley's annual profit. Circle pulled in $1.7 billion in
revenue. The total industry earned over $10 billion annually from reserve interest alone.
This profitability attracted new entrants. PayPal launched PYUSD. Visa expanded USDC
settlement. Banks began exploring their own stablecoins. Western Union launched USDPT.
On the user side: fintech apps started passing yield to users. Turks and Brazilians earning 4-
5% on dollar stablecoin deposits — a lifeline when local bank savings give negative real
returns against inflation.
After a decade of near-zero rates when stablecoins had no yield advantage, the interest rate
environment created an unprecedented convergence of utility plus yield. This is why the
explosion happened now and not in 2020.
Force 4: The Technology Matured
Ethereum layer-2 networks — Arbitrum, Optimism, zkSync — went mainstream in 2023-24.
Stablecoin transfers that cost $5-20 on Ethereum's main chain now cost pennies.
Circle launched CCTP in mid-2023: USDC can "teleport" across blockchains — burn on one
chain, mint on another. The liquidity fragmentation problem between Ethereum, Solana, Tron,
and a dozen other networks began dissolving.
Wallets got human-readable. Usernames instead of hexadecimal addresses. Social recovery
instead of seed phrases. One-click swapping between stablecoins. A Nigerian farmer can
receive USDC on his phone and convert to mobile naira seamlessly — this was not possible two
years earlier.
Smartphone penetration in Latin America reached 85%+ of adults by 2025. Cheap Android
devices put stablecoin wallets in rural pockets. "Stablecoin as a service" APIs from Circle and
Stellar let any fintech offer stablecoin wallets without building blockchain infrastructure.
The invisible adoption milestone: in 2024-2026, someone can use a stablecoin without
realizing it's on a blockchain. Several Latin American neobanks use stablecoins on the
backend without their customers knowing.
Force 5: The Permission Cascade
In August 2023, PayPal launched PYUSD — the first stablecoin from a major US financial firm.
There was a telling contrast: when Facebook announced Libra in 2019, a global coalition of
central bankers and politicians mobilized within weeks to kill it. When PayPal launched its
stablecoin, the reaction was... muted.
The fear was gone. Permission had been granted.
Then the dominoes: Visa expanded USDC settlement to Solana and Ethereum, processing $3.5
billion in annualized volume by late 2023. Stripe launched stablecoin payouts in 60+ countries
and made a $1 billion crypto acquisition. MoneyGram went all-in on cash-to-USDC across 180+
countries. Western Union's CEO called stablecoins "an opportunity, not a threat." Telegram
integrated TON stablecoins. WhatsApp piloted stablecoin transfers. Tesla began accepting
USDC for car purchases in select countries.
29% of Fortune 500 executives expressed interest in stablecoins — up from 8% the year
before. 90% of institutional finance was exploring stablecoin integration, according to
Fireblocks.
The "permission effect": once PayPal and Visa do it, everyone else feels safe. The Fed itself
opened a path in August 2023 for supervised banks to transact stablecoins for payments.
Remember the container analogy from Chapter 3? Containers didn't just move goods faster.
They reorganized ports, eliminated entire job categories, created new logistics industries, and
shifted manufacturing to where labor was cheapest. The second-order effects were bigger
than the first.
Stablecoins will do the same. It's not just faster payments. It's the reorganization of banking,
identity, sovereignty, and power that follows.
The Rules: How Governments Tried to Stop It, Then Decided to
Shape It
The regulatory story is one of the most dramatic arcs in this entire book. It follows a clear
narrative: fear, attempted suppression, failed suppression, reluctant engagement, active
shaping.
2019: Facebook announces Libra. The most powerful corporation on Earth tries to launch a
global currency backed by a basket of assets. A global coalition of central bankers and
politicians mobilizes in weeks. Congressional hearings. European Central Bank opposition.
India threatens a ban. Libra is dead by 2022, rebranded to Diem and then shut down entirely.
But the genie is out. Every central bank now has a "stablecoin strategy."
2022: Terra collapses. $40 billion vaporized in days. Do Kwon flees South Korea. Interpol
issues a red notice. The crypto winter's darkest moment. Regulators worldwide say, "See? We
told you so." But instead of banning stablecoins outright, they start writing rules.
2023: BUSD killed overnight. The New York Department of Financial Services orders Paxos to
halt issuance of Binance's BUSD stablecoin. A $16 billion stablecoin wound down by regulatory
order. The message: regulators CAN act decisively. But they chose precision, not prohibition.
2024: MiCA takes effect. Europe writes the first comprehensive crypto-asset regulation. Not a
ban — a framework. Tether gets delisted from some EU exchanges for non-compliance. Circle
rushes to register USDC. The precedent: regulate, don't eliminate.
2025: The GENIUS Act passes. The United States writes a federal law to integrate stablecoins
into the regulated financial system. Full reserves. Monthly attestations. Redemption
guarantees. Three licensing pathways. The question is no longer "should stablecoins exist?"
but "what kind?"
The global convergence on core principles is remarkable: full backing, redemption assurance,
capital requirements, transparency, licensing. The FSB's mantra — "same business, same risk,
same rules" — is becoming operational reality.
What this means: the freewheeling era is ending. A bifurcation is coming — regulated
stablecoins flourishing in the mainstream, unregulated ones retreating to gray markets. This
is good for the thesis. Legitimacy enables deeper integration with traditional finance. Banks
and big fintechs adopt stablecoins when the rules are clear.
The regulatory story isn't over. There will be enforcement actions, jurisdictional conflicts, and
unintended consequences. But the direction is clear: integration, not elimination.
Governments tried to stop stablecoins. They failed. Now they're shaping them.
The Machine: Who's Building It
This isn't just crypto startups in a WeWork. The map of stablecoin builders reads like a who's-
who of global finance.
Issuers — the new "central banks": Circle (USDC, enterprise-friendly, BlackRock managing
reserves), Tether (USDT, dominant in Asia and emerging markets, controversial history, #1 by
volume), Paxos (powers PayPal's PYUSD, white-label services), MakerDAO (community-
governed, DAI backed by diversified collateral including $500M in Treasuries).
Payment networks: Visa (USDC settlement pilot, "just another network we will move money
over"), Mastercard (exploring stablecoin settlements), Stripe (payouts in 60+ countries, $1B
crypto acquisition), PayPal (PYUSD launched Aug 2023), MoneyGram (cash-to-USDC in 180+
countries), Western Union (USDPT on Solana).
Tech giants: Sony (USD stablecoin for PlayStation), Google (AP2 agentic payment protocol),
Coinbase (x402 protocol), WhatsApp and Telegram (stablecoin transfer pilots).
Banks: JP Morgan (JPM Coin, $300B processed), BNY Mellon (custodying USDC reserves),
Société Générale (EUR stablecoin on Ethereum), Goldman Sachs (Diginex experiments).
Infrastructure: BitGo, Fireblocks, Anchorage (custody), Chainalysis, Elliptic (compliance),
MoonPay, Transak (on/off ramps), Chainlink (oracles and proof of reserve), Circle CCTP and
LayerZero (cross-chain).
Blockchain rails: Ethereum + L2s (dominant ecosystem), Tron (50%+ of USDT volume, the
workhorse for emerging markets), Solana (high-frequency trading and merchant payments),
Stellar (purpose-built for payments, MoneyGram integration), Polygon (retail payments), Celo
(mobile-first stable currencies).
VC capital: a16z ($15M MakerDAO stake, funded Celo), BlackRock (invested in Circle, manages
reserves), Fidelity and Visa (strategic investors in Circle's $9B valuation).
The 100 stablecoin opportunities document in this book's appendix maps the full landscape:
100 companies across 10 verticals, each representing a piece of the old financial system being
rewired. It's not a list of startup ideas. It's a map of everything that breaks, shifts, or
reorganizes once stablecoins become base money.
The Numbers
Market cap: roughly $125-130 billion. 21Shares projects over $300 billion by 2027. Bloomberg
Intelligence: $2.8 trillion by 2030.
160 million+ blockchain addresses hold stablecoins. An estimated 50-75 million people
globally. Circle's CEO cites 500 million+ digital wallets with stablecoin functionality.
99%+ of stablecoin value is USD-pegged. Non-USD stablecoins are less than 1% of the market.
USDT on Tron alone handles $24.6 billion in daily transfers — seven times Ethereum's
stablecoin volume.
McKinsey calls stablecoins "the first true market fit for digital assets in payments." a16z says
they might "rival the size of the credit card industry within a decade."
The machine is running. The question is what it's building toward — and for whom.