Crypto's quiet workhorse is finally going mainstream
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Illustration: Maura Losch/Axios
The crypto world's most promising application is bursting into the financial mainstream — powered not by hype, but by regulation, political backing, and trillions in real-world transactions.
Why it matters: Memecoins, fraudsters and crypto volatility have overshadowed the quiet success of stablecoins — digital tokens designed to hold a steady value, typically pegged to the U.S. dollar.
- Stablecoins remain in a legal gray area in the U.S., but both chambers of Congress are racing to draft rules for what's become the most functional use case for blockchain technology worldwide.
- "We are going to keep the U.S. the dominant reserve currency in the world, and we will use stablecoins to do that," Treasury Secretary Scott Bessent vowed at a White House summit last month.
The intrigue: The digital currency has support not just from the Trump administration but from the Trump family itself.
- Their crypto venture, World Liberty Financial, has announced plans to sell a stablecoin — drawing massive backlash from Democrats, who accuse the president of profiting from his office.
- Democrats who support passing stablecoin legislation fear the Trump family's conflicts could derail the bipartisan efforts to regulate and legitimize the fast-growing industry.
By the numbers: Global asset manager Ark Invest estimates that annual stabelcoin transaction volume hit $15.6 trillion in 2024 — basically on par with what the Visa Network reported for its fiscal 2024.
- More than $230 billion in assets have been dedicated to backing this class of tokens, up more than $100 billion since Trump won the 2024 election.
How it works: The most popular stablecoins are backed by dollar deposits and other highly liquid assets, ensuring that each token can be reliably redeemed for actual U.S. dollars — even during a bank run.
- Stablecoins started as liquidity for crypto traders, but they've caught on as a way for companies to manage global treasuries, pay workers around the world and conduct peer-to-peer transactions.
- There have been questions about the soundness of stablecoin reserves in the past, but it's become normal to release regular statements from accountants verifying their adequacy.
- Circle's stablecoin — the largest based in the U.S. — holds its reserves almost entirely at BlackRock, which pays it interest.
Between the lines: Stablecoins are highly profitable. Issuers pocket the interest on the assets backing the tokens — a lucrative spread in a high-rate environment.
- One major issuer reported $13 billion in profits for 2024.
State of play: After PayPal became the first big brand to release a stablecoin, a wave of new issuers are following suit.
- A U.S. law will likely permit big banks to issue their own — alongside credit unions, financial firms and others.
What we're watching: The Senate Banking Committee has sent its stablecoin bill, GENIUS, to the floor.
- The House Financial Services Committee did the same Wednesday with its bill, the STABLE Act — setting the stage for crucial votes in both chambers of Congress.
