Stablecoins and the battle for monetary influence | Opinion

For decades, the US dollar was the backbone of global finance. Today, the newest champion may not be a central bank or a bond market, but in fact a piece of code. With the stablecoin market now surpass At $300 billion, these digital assets are reshaping the way value moves across borders. The question is no longer whether stablecoins matter, but what financial order they will help create or influence. Could they threaten the dollar’s dominance, or its most powerful new expansion?

A new engine behind the dominance of the USD

At this point, the answer leans toward reinforcement, not replacement. Almost all stablecoins are pegged to the USD. This expansion of digital liquidity effectively extends the reach of the dollar, allowing it to circulate outside the traditional banking system. By doing this, stablecoins digitize the infrastructure of the dollar and anchor it more deeply in global trade, remittances, and financial markets.

Regulatory developments such as the GENIUS Act have accelerated this trend. By requiring that stablecoins be backed by safe, liquid assets such as government bonds, the US is ensuring that these ‘digital dollars’ are as credible as their traditional counterparts. Every stablecoin transaction strengthens demand for US assets and strengthens confidence in the dollar.

In this sense, stablecoins represent a subtle but profound shift. They allow the dollar to function in programmable form 24 hours a day, 7 days a week, in all jurisdictions, without relying on correspondent banking networks. Every time a stablecoin is used for settlement or collateral, the dollar’s network effect is magnified. Rather than undermining the system, these tokens create a new layer of the global infrastructure, built on the same foundation of trust, liquidity and accessibility that has long supported the dollar’s dominance.

Achieving an institutional, borderless financial system

The most transformative force behind this shift is the acceleration of institutional participation. Banks, businesses and payment providers are no longer passive observers. Many are experimenting with issuing their own regulated stablecoins or tokenized deposits. The motivation is clear: to modernize the financial infrastructure, reduce friction and provide services that meet the demand for instant, borderless money movements.

Institutional clients increasingly want to understand how traditional currency markets and digital assets can coexist within a unified liquidity framework. Stablecoins are at the center of this evolution. They offer the familiarity of fiat with the speed and programmability of blockchain, connecting established markets and emerging digital ecosystems.

In 2024, stablecoin transfer volumes reached $27.6 trillionsurpassing the combined volume of Visa ($15.7 trillion) and Mastercard ($9.8 trillion) for the same period. Surpassing the world’s largest card networks in process volume is no small feat. That’s why I believe stablecoins will be so embedded in the future of our financial fabric that we won’t even realize they’re being used on the exact same rails.

These developments reframe the debate surrounding the dominance of the dollar. Instead of viewing stablecoins as a threat, we should recognize them as catalysts for efficiency and inclusivity. They are restructuring the global financial sector, helping to connect previously isolated markets and enabling 24-hour access to liquidity. The modernization is a fact and the mechanism will be a subtle but profound replacement of the existing payment infrastructure.

The European opportunity

For other currencies, especially the euro, the path to adoption today is more tangible than ever. While the regulation of crypto asset markets has provided a clear legal framework and oversight for euro-backed stablecoins, we are only now seeing the next step: institutional mobilization. Earlier this year, nine major European banks, including ING, UniCredit, CaixaBank and others, formed a consortium to launch a euro-denominated stablecoin compliant with MiCA standards, with a target of issuance in the second half of 2026.

This marks an important shift: Europe’s largest financial institutions are no longer sitting on the sidelines, but are actually building the rails for digital money. Yet the difference in scale cannot be ignored. The Euro stablecoin market is currently under $1 billion, compared to over $300 billion in USD-pegged tokens. Integration will be the real catalyst for growth. For euro-backed stablecoins to scale, they must be fully embedded in banks’ core treasury, custody and settlement processes, and that will take time.

The way forward

Ultimately, how jurisdictions design and regulate stablecoins will determine who sets the standards for the next phase of global finance. If the US continues to take swift action to ramp up stablecoin issuance under clear federal oversight, it could cement the dollar’s leadership for another generation, but this time through digital rails.

That said, the competition is becoming increasingly fierce. From European bank-backed euro projects to Asian central bank-linked initiatives, competing digital currencies are emerging that aim to match the speed, scale and trust of dollar-denominated tokens. This new era of currency competition will not be defined by one currency replacing another, but by a convergence of fiat and digital standards into a single, interoperable system.