Stablecoins: Replacing Banks or Turning Into Them?

Where stablecoins started — and how they’re drifting

Remember the early crypto dream: peer-to-peer money that zips around the world without middlemen? Stablecoins promised to be that speedboat. Fast-forward a bit, and it looks like that speedboat might be getting hitched to a cruise liner called “regulation.” Rules in the U.S. and Europe have been written to make stablecoins safer, and that’s great — except safety sometimes wears a suit and starts acting like a bank.

Regulators want issuers to hold reserves, submit to audits, know who’s transacting, and make sure people can redeem tokens. Those requirements push issuers to centralize custody, plug into existing banking rails, and put layers of oversight between you and your coins. The result? Stablecoins that are faster and more legitimate for institutions, but less free and peer-to-peer for everyday users.

For a lot of corporate use, stablecoins are already behaving like a back-office tool for cross-border settlement rather than a wallet-to-wallet payment method for your neighbor. That shift—useful for institutions—risks making stablecoins into the new plumbing for banks rather than the currency for everyone else.

Design choices that decide the future

Here’s the fork in the road: will stablecoins be built as open, programmable money or as regulated infrastructure that happens to be tokenized? If the answer is the latter, we’ll get rails that are efficient and boring—great for big players, meh for the rest of us. Imagine SWIFT but tokenized: excellent at moving institutional value, terrible at unbundling power.

To keep the original promise alive, the tech and policy people need to stop treating compliance as a bolt-on and start baking it into the protocol. That means thinking about things like on-chain proofs of reserve, privacy that’s selective (so you don’t have to be watched 24/7), cross-chain standards that don’t force custody, and ways to let people hold and move value without handing everything over to a third party.

There are signs of progress—groups working on standardized cross-chain payments and protocol-level compliance are experimenting with ways to have both safety and openness. But it’s not guaranteed. Design decisions made now will set the rails for decades.

If we prioritize only institutional needs—compliance checkboxes, auditability, and bank-grade custody—we’ll end up with a shinier version of the old system. If we instead prioritize peer-to-peer flows, interoperability, and non-custodial access, stablecoins can still be a genuine tool of financial inclusion and programmability.

So yeah, stablecoins can rewrite money. But whether they liberate people or just make banks faster depends on the engineers, policymakers, and communities who steer them today. Pick the path that builds for people, not just for institutions.

Guest opinion: this piece reflects the author’s views and is not financial advice. Do your own research before making any investment decisions.