Stablecoins: the digital aircraft carrier in the fiat wars

The Tokenisation of Everything 

BlackRock’s Larry Fink was recently quoted as saying the financial industry is at “the beginning of the tokenisation of all assets”. Everything is heading onchain. The first asset to be meaningfully tokenised isn’t equities or funds; it’s the U.S. dollar.

Stablecoins are, in effect, tokenised dollars: now moving at internet speed over public blockchains. The market is significant and growing fast, with aggregate fiat-backed supply north of US$300 billion. And the market has already been dollarised, USD making up nearly 99% of the global stablecoin supply.

If Fink is right, the dollar is the test case, and it’s doing so with the quiet backing of Washington: tokenised dollars export U.S. monetary power and create structural demand for U.S. Treasuries at a time when traditional buyers like China and Japan are stepping back.

The debasement trade, being an inflation hedge towards hard assets like gold and Bitcoin, isn't threatened by stablecoins. But there is a fight brewing inside fiat-land for whatever global reserve market share remains.

The Tech with Real Product–Market Fit

A stablecoin is simple: a dollar (backed 1:1 with dollar assets) issued token on a public chain (Ethereum, Solana, etc.), transferable 24/7, peer-to-peer, anywhere there’s internet.

The use cases are now very real:

• Cheaper Online Payments: Stripe, a dominant global payment processor, has just rolled out stablecoin payments service. They charge merchants 1.5%. Compared to a typical online card fee of roughly 2.9% + 30c, this can cut transaction costs by half. On a $100 sale, the savings of $1.50 can translate to a 15% boost in profit for a $10 margin business, just by changing the rails. Stripe’s initial fat 1.5% fee will also come under pressure as more competition enters.
• Cross-border Settlement: For a freelancer in Manila or a small exporter in Nairobi, a client can settle an invoice over the weekend in USDC/USDT. Funds are received in seconds instead of days, without the chunky remittance haircut.

Once you accept that stablecoins are here to stay, you can ask the macro question: What happens when hundreds of billions, potentially trillions, of tokenised dollars are sitting in T-bills instead of traditional bank balance sheets?

Stablecoins to Target the Eurodollar market 

The offshore dollar system (Eurodollars) is vast, easily topping US$20–25 trillion (BIS, 2022). Historically, this fractional-reserve system meant commercial banks held only 15–20% of their dollar liabilities in U.S. Treasuries.

By contrast, the GENIUS Act of 2025 (S. 919) requires fully backed payment stablecoins to hold reserves in safe, liquid assets, in practice ~90% short dated treasuries.

This difference creates a simple "Treasury-intensity" comparison:

Every dollar that shifts from a Eurodollar bank deposit into a regulated stablecoin creates roughly $60–80 cents of incremental demand for U.S. government debt.

Just 10% of that Eurodollar market would meet Standard Chartered estimates of $2trillion stablecoin market by 2028 (Standard Chartered). U.S. Treasury Secretary Scott Bessent has also floated a $3 trillion target by 2030, explicitly linking it to stronger structural demand for bills.

On those numbers, $2–3 trillion of tokenised dollars, multiplied by the incremental $0.60–0.80 in T-bill demand, gets you in the ballpark of US$1¼–2 trillion of new, structural demand for the front end of the U.S. curve over the decade.

Tokenising the dollar doesn’t just digitise cash, it quietly bolts a new "shadow foreign central bank" onto the T-bill market.

Old Buyers Step Back, New Buyers Step In

This shift matters because some historic buyers of Treasuries are less reliable than they were:

• Foreign Investors hold around $8½–9 trillion, or a quarter of U.S. federal debt. Japan and China remain the two biggest official holders.
• Japan increasingly describes its $1 trillion Treasury book as a liquidity war chest for yen intervention, not a long-term growth asset.
• China has steadily reduced reported holdings to the lowest levels since the late 2000s, diversifying notably into gold.

Washington has a big incentive to get regulation "just right": tight enough to be safe, permissive enough to let this demand machine run. Stablecoin reserves help fund U.S. deficits and extend dollar use without the diplomatic baggage of relying too heavily on any single foreign central bank.

The First Fiat Fight: USD vs EM currencies

From the point of view of a household in Lagos or Istanbul, the choice isn’t between fiat and gold. It’s: "Do I stay in my inflationary fiat, or move into someone else’s that’s slightly less bad?”

Recent inflation history tells the story:

• U.S. CPI is running at roughly 3% p.a. annoying, but not existential.
• Nigeria and Turkey have both been dealing with high double-digit inflation, with levels still many multiples of U.S. inflation.

If that’s your reality, the U.S. dollar is hard money.

The historical escape routes were offshore KYC'd USD bank accounts which are available to few, or literal stacks of probably black market cash bought at a significant premium. Now the frictionless route is:

1. On-ramp into USDT/USDC via a local exchange or P2P broker.
2. Move to your crypto wallet
3. Sit in self custodial tokenised dollars.

You never touch a U.S. bank. Your central bank doesn't see the deposit. Your savings can now live on a public blockchain.

No wonder ex US policymakers are nervous:

• The IMF explicitly warns that USD stablecoins could accelerate currency substitution and undermine monetary policy in weaker economies (IMF, 2025).
• The ECB frets that USD stablecoins could dilute euro usage, part of the logic behind MiCA and the push for a digital euro.
• China keeps foreign stablecoins at arm’s length, conscious they function as informal dollar accounts that bypass capital controls.

The duel isn’t "crypto vs fiat" it's USD vs every local unit, with tokenised dollars as the tip of the spear.  The trade is not USD its the blockchains stablecoins are issue on.

How to trade this trend

If tokenised dollars are the future, investors should focus on owning the rails: Focus on the base layer blockchains (L1s) that host the bulk of stablecoin balances and payments (Ethereum, Solana, etc.). These chains clip a fee on every stablecoin transfer. Switching between issuers like USDT and USDC is easy, so too banks moving into to issue their own stablecoins, replicating the network effect of the existing permissionless chains is not.

Gold and Bitcoin have never been more important as debasement hedges. But the dollar will be the first leg of their debasement trade for some, as other fiats continue to bleed credibility, and tokenised dollars make it trivially easy for global savers and merchants to vote with their feet.

If Fink is right and “every asset will be tokenised,” the dollar is just the first proof-of-concept, and it’s already rewriting who funds U.S. deficits, and where the next leg of the debasement trade plays out.

Next up is equities, commodities and any other traded assets, moved on to rails that support 24/7 trading with fraction cent fees and near instant settlement. 

xStocks on Solana only launched on 30 June this year and already has $2.5Bn in transaction volume and total AUM over $185m.  This really is the start of the tokenisation of everything.

Again not just great tech, but projecting U.S. dominance of the equity market, new marginal buyers of Mag 7, SPY and QQQ, circumventing any capital controls.