Stablecoins Are Eating The World

To investors,

Stablecoins are eating the world. It seems like every market participant is jumping head first into the game right now. Here are a few examples:

* The Senate recently passed the GENIUS Act in another step towards a federal framework for stablecoins.

* Stripe announced a deeper partnership with Shopify to help businesses in 34 countries immediately start accepting stablecoins via Shopify.

* Coinbase announced Coinbase Payments, which is a full-stack stablecoin payments product built for commerce platforms.

* Founders Fund invested in Ubyx, which is a clearing system for stablecoins built by a 20-year veteran at Citigroup.

* JPMorgan announced the launch of JPMD, the bank’s alternative to US dollar stablecoins.

* The Wall Street Journal reported that Walmart and Amazon are both exploring how to launch their own stablecoins.

This list is not exhaustive for even the last week, but it highlights just how quickly companies are embracing this new technology. Even Treasury Secretary Scott Bessent was pushing the stablecoin narrative in a recent interview when he said stablecoins could reinforce dollar supremacy. Here is the clip:

It doesn’t get more serious than the leader of the United States Treasury saying stablecoins are essential for the US dollar to continue winning on the global stage.

Castle Island’s Nic Carter recently reminded us about a speech he gave last year on stablecoins. Nic writes:

“Cryptodollarization has happened already, arguably in Venezuela, Argentina, and Nigeria. I believe it's much more aggressive than conventional dollarization, which is often limited by availability of physical banknotes. I believe that in a decade there will be many fewer sovereign currencies and most weak nations will be dollarized – not through USG intervention but by a spontaneous "bottom up" process.

In effect consumers engage in currency substitution and force the government's hand. Stablecoins eliminate the power of borders in currency choice and allow network effects to actually take hold. This is why we see the dollar representing >99% of stablecoins but only 40-60% of international reserves and financial flows. Stablecoins make currency substitution must faster and more aggressive, and they are also impossible to stop. In almost all cases where nation states have attempted to prohibit flows out of local FX into USD stablecoins, they have eventually relented.”

I completely agree with Nic. Bitcoin is going to win, but US dollars in stablecoin form are going to aggressively win as well. This means the weakest fiat currencies are going to fall at the feet of bitcoin and dollars.

It is crazy to watch this play out. Technologists built better payment rails for all currencies, so now the legacy players are having to bend the knee to adopt dollar stablecoins. Don’t expect this trend to slow down any time soon.

Hope you all have a great day. I’ll talk to everyone tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

Patrick McHenry on Bitcoin, Stablecoins and Regulation

Patrick McHenry is the former chairman of the House Financial Services Committee, and the Vice Chairman at Ondo Finance.

In this conversation we talk about bitcoin, ETFs, bitcoin treasury companies, legislation around stablecoins, tokenization, and how Patrick sees the world evolving.

Enjoy!

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