💵 Stablecoins: The Quiet Giant Behind Crypto’s Next Chapter
Why Investors Should Care
Stablecoins — cryptocurrencies designed to maintain a stable value — are back in the spotlight.
Last week, Circle Internet Group Inc. made its highly anticipated public debut, while U.S. lawmakers continue to make progress on stablecoin legislation that could shape the future of digital payments. As regulation tightens and institutional interest grows, stablecoins are quietly becoming a critical layer of global finance.
🪙 Why Stablecoins Exist
Bitcoin, Ethereum, and other major cryptocurrencies are famously volatile — exciting for traders, but impractical for everyday payments or savings. Stablecoins were created to solve that problem: combining the flexibility of crypto with the price stability of fiat currencies like the U.S. dollar.
In simple terms:
“Use crypto without worrying about whether your coffee costs $3 or $300 tomorrow.”
According to a report by Coinbase Global Inc., the total outstanding supply of stablecoins now equals nearly 10% of the physical cash circulating in the U.S. economy — a remarkable figure for an asset class barely a decade old.
(Note: Stablecoins aren’t counted as part of traditional "money supply," which only includes physical notes and coins in public hands.)
📊 The Stablecoin Landscape Today
Stablecoins come in different forms depending on how they are backed and maintained. Key types of stablecoins and how each model works:
As of mid-2025, the market remains dominated by a few major players:
Tether (USDT): Still the largest, pegged 1:1 to the U.S. dollar, making up nearly half the global stablecoin market.
USD Coin (USDC): Issued by Circle, increasingly favoured by regulated institutions.
DAI: Decentralised, backed by crypto collateral.
Algorithmic stablecoins: Once hyped, now marginal after Terra/LUNA’s infamous collapse.
🔄 The Utility: Trading’s "Base Currency"
Roughly 88% of stablecoin volume today comes from crypto-to-crypto trading pairs. Traders use stablecoins to move in and out of positions without having to fully exit into fiat — offering fast, liquid, and relatively stable on-ramps across global exchanges.
In other words:
Stablecoins have quietly become the digital dollar of crypto markets.
Where Is This Heading?
The stablecoin sector is evolving rapidly on multiple fronts. Globally, regulators are advancing legal frameworks to govern stablecoin issuance. Major banks and payment providers — including PayPal (PYUSD) and JPMorgan (JPM Coin) — are entering the market with their own stablecoins. Meanwhile, stablecoins combined with tokenised real-world assets (RWA) are emerging as new tools for cross-border settlements. Central bank digital currencies (CBDCs) may coexist alongside private stablecoins, while ongoing technical innovation focuses on improving transparency, on-chain reserves, and diversified collateral models.
💡 Why Investors Should Care
The stablecoin story isn’t just about crypto speculation — it’s about who controls the future of digital money.
While Bitcoin headlines grab attention, stablecoin infrastructure quietly powers a huge chunk of today’s crypto economy — and may soon power parts of global finance.
Public companies with exposure:
Coinbase Global Inc. (in our portfolio): Key trading venue and stablecoin partner.
Circle Internet Group Inc.: Now publicly listed, directly issuing USDC.
As regulation evolves, these firms may find themselves not just beneficiaries, but gatekeepers of the next generation of payment rails.
📊 Portfolio Weekly Recap – A Temporary Calm Amid Lingering Policy Risks
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