I was recently in NYC for Stablecon and had more in-person conversations with the top stablecoin minds than ever. These are my takeaways:
- There is a significant knowledge gap around USD₮ in the US market. It’s surprising, given how central Tether’s growth and impact have been to crypto. In my opinion, this should be standard study in the crypto history books.
- I have come to the conclusion that the programmability of stablecoins is the primary catalyst for western markets to innovate with stablecoins. This is radically different in emerging markets, where the permissionless nature of stablecoins is the main driver of adoption.
- A lot of people are focusing on FX in the context of stablecoins and payments. I think this is where the real value sits in the stablecoin stack, and where orchestration companies will make the most money. As a result, I suspect orchestration layers to use FX opportunities as a primary source of generating revenue, hence are unlikely to outsource this.
- Following this logic, companies focused on stablecoin-based money movement in the US will need to facilitate volume at massive scale in order to reach escape velocity.
- I have never been more bullish on MegaEth. @amiralmaimani’s MegaMafia is genius and something that should be replicated across other ecosystems.🕊️
- The user profile for stablecoins outside of the US is different for a saver, spender, and sender. A completely different user experience and application is needed to serve them properly. In the US, people are used to saving AND spending in dollars.
- Most orchestration layers and API providers are sustained by just a handful of core clients
- Local currency stablecoins will only thrive with volume from regional buyers and within a USD₮-based global liquidity pool. Chains biased toward other stablecoins will not capture the volumes or market opportunity of local currency stablecoins beyond an incentivised scale.
- Tether continues to win with two significant network effects. The first is a user network effect. If you are in stablecoins, you are probably holding USD₮. It has the most real, unique holders. These users are happy to receive in USD₮, which makes it more widely used and hence considered “harder” as an asset. The second network effect is liquidity. USD₮ has the deepest liquidity with cryptocurrencies like BTC and ETH, as well as local currencies. The growth of a stablecoin is ultimately a function of its liquidity, leaving USD₮ positioned for continued dominance.
- A lot of key people are bullish on @PlasmaFDN and understand the case for a purpose-built blockchain for stablecoin payments.
TLDR: US-based stablecoin innovation is interesting and mostly follows the path of fintech. It is fundamentally different from what we see in emerging markets. Adoption looks completely different in the US, where few people actually need access to digital dollars. Tether is winning and will continue to win, whether or not US builders recognise it.
Also trillions.
- There is a significant knowledge gap around USD₮ in the US market. It’s surprising, given how central Tether’s growth and impact have been to crypto. In my opinion, this should be standard study in the crypto history books.
- I have come to the conclusion that the programmability of stablecoins is the primary catalyst for western markets to innovate with stablecoins. This is radically different in emerging markets, where the permissionless nature of stablecoins is the main driver of adoption.
- A lot of people are focusing on FX in the context of stablecoins and payments. I think this is where the real value sits in the stablecoin stack, and where orchestration companies will make the most money. As a result, I suspect orchestration layers to use FX opportunities as a primary source of generating revenue, hence are unlikely to outsource this.
- Following this logic, companies focused on stablecoin-based money movement in the US will need to facilitate volume at massive scale in order to reach escape velocity.
- I have never been more bullish on MegaEth. @amiralmaimani’s MegaMafia is genius and something that should be replicated across other ecosystems.🕊️
- The user profile for stablecoins outside of the US is different for a saver, spender, and sender. A completely different user experience and application is needed to serve them properly. In the US, people are used to saving AND spending in dollars.
- Most orchestration layers and API providers are sustained by just a handful of core clients
- Local currency stablecoins will only thrive with volume from regional buyers and within a USD₮-based global liquidity pool. Chains biased toward other stablecoins will not capture the volumes or market opportunity of local currency stablecoins beyond an incentivised scale.
- Tether continues to win with two significant network effects. The first is a user network effect. If you are in stablecoins, you are probably holding USD₮. It has the most real, unique holders. These users are happy to receive in USD₮, which makes it more widely used and hence considered “harder” as an asset. The second network effect is liquidity. USD₮ has the deepest liquidity with cryptocurrencies like BTC and ETH, as well as local currencies. The growth of a stablecoin is ultimately a function of its liquidity, leaving USD₮ positioned for continued dominance.
- A lot of key people are bullish on @PlasmaFDN and understand the case for a purpose-built blockchain for stablecoin payments.
TLDR: US-based stablecoin innovation is interesting and mostly follows the path of fintech. It is fundamentally different from what we see in emerging markets. Adoption looks completely different in the US, where few people actually need access to digital dollars. Tether is winning and will continue to win, whether or not US builders recognise it.
Also trillions.
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