This year, we are faced with an unexpected question – what exactly is the future of money? The traditional “cash vs. card” debate is just the beginning. We’ve all tried to understand cryptocurrencies, but we’ve only managed to understand half of them at best. But in 2025, there were clear signs that a new battle for control of capital flows and transactions would erupt. Many are based on new creations called stablecoins, which may or may not live up to their name over time.
To understand the battle ahead, we need to focus on two things. One is the kind of anarchic and anti-establishment mood that led to the creation of cryptocurrencies. It was money created and managed outside the normal rulebook. This was a power play by the technology sector and crypto promoters pushing into territory traditionally reserved for governments and central banks. This is, not surprisingly, the kind of Wild West finance that Donald Trump really loves.
Another relevant factor is that this is primarily a battle for control of the plumbing of the financial system. For many years, this was the domain of central banks, commercial banks (e.g. via the Swift system), and various regulated financial intermediaries. The emergence of cryptocurrencies was based on blockchain, a decentralized database or ledger that allows users to communicate and make payments directly using intermediaries such as banks rather than traditional routes. Importantly, it promised speed and the absence of regulatory barriers or checks on the movement of funds.
Blockchain transactions have been central to the growth of cryptocurrencies and also to stablecoins, a new player in the market. It’s been around in various forms for several years, but it’s only now that it’s really starting to gain traction. Like traditional cryptocurrencies, it is a digital currency, but it also acts as a bridge to the traditional financial world by linking its value to assets such as larger currencies (most often the US dollar). And to meet this promise of convertibility, the companies promoting it (by far the largest financial technology companies, Tether and Circle) require holdings in US dollar assets, typically US Treasuries or Treasuries.
The average value of cryptocurrencies fell by more than 25% toward the end of last year, with the main decline occurring in mid-October, leaving many new investors in Bitcoin and other popular digital currencies with losses. But unlike cryptocurrencies, which many people used as investment funds, the key to stablecoins is their stability of value, and therefore their use in transactions.
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The Genius Act (Guiding and Establishing National Innovation in U.S. Stablecoins), a law introduced in the United States in July to regulate digital currencies, prohibits interest returns to stablecoin holders and sets rules regarding the assets that issuers must hold. This official recognition and regulation has given stablecoins a boost, with some forecasters predicting that issuance could rise to $2 trillion by 2028, up from around $250 billion today. Skeptics such as JPMorgan believe that the market is likely to grow two to three times to between 500 billion and 750 billion euros in the next few years, with growth likely to be more gradual. Other types of digital assets, such as tokenized deposits issued by commercial banks, are also being thrown into the field for common use.
But stablecoins are at the center of this construction war over control of money and payment systems. Tensions are also rising between central banks and traditional players in the banking and payments sectors. Their concerns relate to several areas. One is the lack of public regulatory control over this new ‘money’ infrastructure, which could have implications for monetary policy and the control of crime. For traditional operators (banks and payment companies), profits and potential deposits are at risk.
The essence of a stablecoin is a promise that it can be converted into a set asset value (usually in US dollars). As long as coin holders remain confident that their stablecoin is truly worth $1, all is well. But if they start to lose confidence and start demanding dollars in exchange for stablecoins, will issuers be able to cope? And if the U.S. Treasury market starts releasing more holdings at once, what will this mean for the broader stability of financial markets?
For now, the Trump administration is betting that stablecoins will work to its advantage and increase demand for U.S. assets, especially government bonds, as the U.S. runs a large budget deficit and needs financing. Stablecoin issuers are already important buyers of U.S. Treasuries. The United States also hopes that its currency will be used even in countries with unstable currencies, and that “dollarization,” which is advantageous to the United States, will spread. Major global retailers are also reportedly considering using their own stablecoins, as are some of the largest financial companies in the US. It remains to be seen whether this technology can make the jump from its current uses (mainly cross-border and crypto trading) to the retail space.
Concerned about the growing dominance of the United States, 10 European banks, including major banks such as ING, UniCredit and BNP Paribas, are planning to launch their own euro stablecoin, Kyvaris, in the second half of 2026. And the US move means pressure is mounting on the European Central Bank to move forward with issuing a digital euro, a digital representation of the euro currency rather than a stablecoin.
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In other words, it’s a money mayhem, a struggle for control, influence, and, of course, profit. But the big question is whether stablecoins actually live up to their name. The biggest company, Tether, is based in El Salvador, and rating agency S&P recently downgraded it to weak, saying it holds too many high-risk assets such as Bitcoin and isn’t financially transparent enough. Naturally, the company did not agree to this.
The test of this will be the downturn in financial markets that will occur sooner or later. Only then will we know whether the new era of blockchain-based digital money will truly take the trading world by storm, or whether its rapid progress will face a major real-world test.
