Fifteen years since Bitcoin's inception, the cryptocurrency market has grown into a nearly $4 trillion entity. Yet, the original vision for Bitcoin as a tool for everyday transactions remains largely unrealized. The focus has shifted to stablecoins as a potential solution for peer-to-peer payments. However, instead of replacing banks, stablecoins are at risk of evolving into bank-like entities. In the U.S. and Europe, regulations are driving them toward centralized systems rather than maintaining their promise of open financial access.
In the United States, the introduction of the GENIUS Act has created a federal framework for stablecoins, outlining who can issue them, how they should be backed, and the nature of their regulation. Meanwhile, Europe has implemented MiCA regulation, effective from 2024, which imposes stringent requirements on stablecoins, categorizing them as "e-money tokens" and "asset-referenced tokens." These regulatory measures aim to ensure safety and legitimacy but simultaneously push stablecoin issuers toward a banking model. Requirements such as reserves, audits, Know Your Customer (KYC) protocols, and redemption processes transform stablecoins into centralized financial gateways rather than tools for direct peer-to-peer exchanges.
Currently, more than 60% of corporate stablecoin usage is concentrated in cross-border settlements rather than consumer payments, indicating a shift towards institutional applications rather than individual usage. The risk here is that stablecoins might develop into the next SWIFT—a centralized, efficient, yet opaque system vital for institutions but not necessarily democratizing financial access. SWIFT revolutionized global banking by facilitating communication between banks, but it didn't expand access to banking services for the unbanked. If stablecoins follow a similar path, they will enhance existing financial infrastructure rather than empower individuals.
The essence of cryptocurrency is programmable money—funds that operate with logic, autonomy, and user control. Yet, when transactions require issuer permissions, comply with tagging, and monitored addresses, the nature of the network shifts. It becomes compliant infrastructure rather than true money, which could steer stablecoins from their disruptive potential to becoming more reactionary and less revolutionary.
The challenge lies not in regulation itself, but in how stablecoins are designed. To preserve the promise of stablecoins while meeting regulatory demands, developers and policymakers should integrate compliance into the protocol layer, maintain composability across different jurisdictions, and ensure non-custodial access. Real-world initiatives like the Blockchain Payments Consortium illustrate that standardizing cross-chain payments without sacrificing openness is feasible. Stablecoins must cater to individuals, not just corporations. If they only benefit large players and regulated transactions, they will conform to existing systems rather than disrupt them. The design should enable genuine peer-to-peer transfers, offer selective privacy, and support interoperability. Otherwise, the infrastructure will merely reinforce existing hierarchies, albeit more efficiently.
Stablecoins still have the potential to revolutionize money. Yet, if they become institutionalized frameworks designed for banks rather than individuals, we risk replacing one centralized system with another. The debate is not about whether to regulate stablecoins—they will be regulated—but whether they will be designed for inclusion and autonomy, or if they will entrench old systems with a digital veneer. The future of money hinges on the path we decide to take.