The stablecoin era: The history and future of stablecoins
Abstract
A new era of stablecoins and digital money has appeared. Stablecoins have demonstrated product-market-fit and real-world demand for cross-border payments activity. Importantly, they have also broken the link between crypto prices and payments volume growth. At the same time, the European Markets in Crypto-Assets Regulation (MiCA) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act 2025 are now laws, firmly positioning stablecoins in the mainstream. This means that financial institutions must bring stablecoins into their scenario planning and ask questions about the strategic impact of stablecoins on financial market infrastructure (FMI). This paper explores that potential impact to help organisations formulate their own strategies. In particular, the paper draws on an historical analogy, from the roots of the Industrial Revolution in England, to suggest that stablecoins are a necessary but interim innovation in payments, but that it is the development of new kinds of financial institutions made possible by such innovation that will be the paradigm shift in FMI for the new economy. In short, innovation around stablecoins will in time engender much more radical innovation around digital assets and the institutions to create, store and exchange these assets. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.
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Author's Biography
David G. W. Birch is an author, adviser and commentator on digital financial services. A recognised thought leader in digital identity and digital money, he holds a number of board and advisory roles across these fields. He is a Forbes contributor and a columnist for Financial World. His most recent book, ‘Money in the Metaverse’ (LPP, 2024), written with Victoria Richardson, looks at the building blocks of next-generation financial market infrastructure.
Simon Taylor is the author of the Fintech Brainfood newsletter, a must-read for over 45,000 leaders, chief executives and venture capitalists. He is currently Head of Market Development at Tempo, a payment-focussed blockchain. Previously Simon was a co-founder of 11:FS and former Head of Blockchain R&D at Barclays. Simon is a sought-after keynote speaker who advises global financial institutions, regulators and tech companies on the future of money.
