What Happens When Your Dollars Go Digital?

In early 2023, a Venezuelan schoolteacher named Elena used her phone to send $50 to her sister in Bogotá. Not through Western Union. Not through a bank. She used USDC, a U.S. dollar–backed stablecoin, transferred via WhatsApp using a crypto wallet.

The money arrived in seconds. No one asked her to fill out a form. No one charged her a $12 fee. No one asked why she was sending money across a border.

This quiet moment—a small act of digital money movement—is becoming more common by the day. And while it doesn’t grab headlines like Bitcoin rallies or NFT implosions, it may be the most important thing happening in crypto.

Welcome to the stablecoin era.

The Problem with “Money”

For all the ways technology has transformed our lives, money—how it moves, how it's stored, how it’s controlled—has barely changed. Billions remain unbanked or underbanked, stuck in outdated systems. Banks still own the rails. Cross-border transfers take days. Fees and delays are routine. For example, I recently transferred money from one of my bank accounts to another I have linked to it. The transfer took 2 days to complete and came with a small fee.

Stablecoins offer a different path.

They’re digital tokens pegged to fiat currencies like the U.S. dollar or euro, designed to combine the stability of government money with the speed and openness of blockchain networks.

The result is a new kind of money: programmable, borderless, frictionless.

What Makes a Stablecoin “Stable”?

At a glance, a stablecoin like USDC looks like any other digital token. But under the hood, it's engineered to maintain a 1:1 peg with its fiat counterpart. How?

There are three major models:

1. Fiat-backed – Every token is backed by actual dollars held in reserve. Examples: USDC, USDT, TUSD.

2. Crypto-collateralized – Tokens like DAI are backed by overcollateralized crypto deposits (usually ETH).

3. Algorithmic – These rely on supply/demand mechanisms (think Terra/Luna… and their infamous collapse).

Today, over $120 billion in stablecoins circulate globally, with USDT and USDC leading the pack.

What’s remarkable isn’t just the amount—but how and why they’re used.

The Rise of Stablecoins

If stablecoins began as a niche tool for crypto traders, today they are evolving into something much larger: a parallel financial system running on blockchain rails. Adoption has surged in just a few short years. In 2019, the combined supply of all stablecoins barely reached $5 billion. By 2025, that figure is projected to exceed $150 billion, and some analysts estimate that by the end of this decade, stablecoin circulation could climb into the trillions.

This growth should be understood in context. Compared to global M2 money supply (cash plus checking and savings deposits), stablecoins remain tiny—measured in fractions of a percent. But what’s striking is not their size today, but their trajectory. While fiat supply expands gradually with monetary policy, stablecoin supply curves show steep, exponential growth—mirroring the early adoption curves of the internet and mobile phones.

A closer look at market share reveals the competitive dynamics driving this expansion. Tether (USDT) remains the dominant stablecoin, widely used in emerging markets and on exchanges as the default dollar proxy. USD Coin (USDC), backed by regulated U.S. entities, has grown quickly, particularly among institutions and payment networks, positioning itself as the “trusted” stablecoin for mainstream adoption. DAI, though much smaller, has carved out a reputation in DeFi as the leading decentralized alternative. Together, these tokens account for the overwhelming majority of stablecoin activity, with each carving out a distinct role in the ecosystem.

Real People. Real Use Cases.

For people in stable economies, stablecoins might seem like a solution in search of a problem. But look closer, and their value becomes clear—especially in regions facing:

• High inflation (Argentina, Turkey, Lebanon)

• Strict capital controls (China, Nigeria, India)

• Banking instability (Russia, Ukraine, parts of Africa and Latin America)

• Political repression (think protest donations or frozen accounts)

For these users, stablecoins provide a lifeline—a way to preserve value, make payments, and operate outside of broken systems.

But the appeal isn’t just for the economically desperate.

In the U.S., freelancers are increasingly accepting stablecoin payments for overseas work. Travel bloggers are paying for hotels in USDC. Some tech-savvy parents are giving their teenagers allowance in stablecoins—wallet-to-wallet.

Even companies like Visa and PayPal are now experimenting with stablecoin infrastructure to settle transactions on-chain.

In other words: Stablecoins are moving from the edge to the center.

The Institutions Are Coming

What began as a fringe idea—digitized dollars—is rapidly being normalized.

• Visa now settles some cross-border transactions with USDC on Solana.

• PayPal has launched its own stablecoin, PYUSD, in partnership with Paxos.

• Circle, the issuer of USDC, is expanding across Europe and Asia with increasing regulatory support.

Central banks are watching closely. Some see stablecoins as stepping stones to CBDCs (Central Bank Digital Currencies). Others, like the U.S. Federal Reserve, are wary of their systemic implications.

But one thing is clear: The future of money is not purely paper, nor purely crypto. It’s programmable, interoperable, and increasingly stable.

From Hype to Infrastructure

It’s easy to miss the quiet revolution. Bitcoin made noise. NFTs made headlines. But stablecoins? They’re just… working.

That’s the point.

In countries like the Philippines, OFWs (Overseas Filipino Workers) are using stablecoins to send remittances home. In Argentina, citizens convert pesos to USDT within hours of getting paid, just to protect their income. In sub-Saharan Africa, small merchants use stablecoins to pay suppliers and accept payments in places where traditional banking is unreliable.

Meanwhile, in the U.S. and Europe, tech-savvy consumers are experimenting with yield-bearing stablecoin accountsthrough DeFi platforms like Aave, Compound, and Notional—earning 3–7% APY on what is essentially “digital cash.”

The Risks

Let’s be clear: Stablecoins aren’t magic.

They carry regulatory, technological, and custodial risks.

• What if reserves aren’t fully backed?

• What if smart contracts are hacked?

• What if regulators ban certain issuers?

The Terra/Luna crash of 2022 revealed the dangers of poorly designed algorithmic stablecoins. Billions were lost in days.

That’s why due diligence is critical. Stick with reputable projects. Understand the underlying mechanics. And never put in more than you can afford to lose—especially in experimental protocols offering double-digit yields.

But if approached wisely, stablecoins offer something revolutionary: access. Not just to crypto, but to modern finance itself.

A Gateway, Not a Destination

Stablecoins are not the endgame. They are the bridge.

They bridge:

• Crypto and TradFi

• Dollars and the global South

• Convenience and decentralization

They’re the first crypto product that feels… familiar. Spendable. Useful. Trustworthy.

And that’s why they matter.

In the coming decade, the financial infrastructure we take for granted—banks, wires, credit cards—may slowly be rebuilt on stablecoin rails. Your kids may one day receive their first allowance in USDC. Your pension fund might be settled in a regulated digital dollar.

And you? You’ll wonder why money ever needed to move so slowly. I know I do.

TL;DR

• Stablecoins are digital currencies pegged to fiat (mostly USD), designed for stability.

• They power cross-border payments, DeFi yield, everyday spending, and store-of-value use cases.

• $120B+ in stablecoins are in circulation—and growing fast.

• Risks remain, especially with unregulated or algorithmic variants.

• But stablecoins are building the rails for the next version of global finance.

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Other Articles In This Issue:

• Editorial: In Praise of Stability: The Quiet Revolution of Stablecoins

• CHECK OUT OUR PREVIOUS EDITIONS