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The concept of Bitcoin, introduced fifteen years ago, has grown into a nearly $4 trillion ecosystem. However, the original vision of peer-to-peer payments remains largely unfulfilled. The focus has shifted to stablecoins, which were initially designed to replace traditional banking systems. Unfortunately, stablecoins are at risk of becoming the very thing they were meant to replace: bank-like infrastructure. Tighter regulations in the US and Europe could push stablecoins towards centralized rails, rather than open money.
Regulatory Frameworks and Their Impact on Stablecoins
In the United States, the GENIUS Act has established a federal framework for stablecoin payments, outlining who can issue them, how they are secured, and how they are regulated. Similarly, in Europe, the MiCA (Markets in Crypto-Assets) Regulation, which came into force in 2024, has set strict requirements for stablecoins, categorizing them as “e-money tokens” and “asset-referenced tokens.” While these regulations promote legitimacy and security, they also push stablecoin issuers towards the world of banking, requiring them to meet reserve, audit, KYC, and redemption requirements.
As a result, stablecoins are becoming centralized gateways rather than peer-to-peer money. According to recent data, over 60% of corporate stablecoin usage is in cross-border payments rather than consumer payments, indicating that stablecoins are increasingly becoming institutional instruments and less like tokens for individuals. This shift raises concerns about the potential for stablecoins to become the next SWIFT, a system that, while efficient, is opaque and centralized.
The Risk of Becoming the Next SWIFT
The transformation of stablecoins into a system like SWIFT would mean becoming a focal point for institutions, enabling faster and more efficient transactions between banks, but not necessarily democratizing access to financial services. The promise of crypto was programmable money, allowing for cash to move with logic, autonomy, and user control. However, when transactions require issuer approval, compliance tagging, and monitored addresses, the architecture changes, and the network becomes a compliant infrastructure, not money.
This subtle but profound shift could result in stablecoins becoming less radical and more reactionary, ultimately replacing one centralized system with another. To preserve the promise of stablecoins, developers and policymakers must embed compliance into the protocol layer, maintain composability across jurisdictions, and preserve non-custodial access. Initiatives like the Blockchain Payments Consortium offer a glimmer of hope that standardizing cross-chain payments without sacrificing openness is possible.
A Better Path Forward
Stablecoins need to work for individuals, not just institutions. If they only serve large players and regulated flows, they will not disrupt the existing financial system; they will adapt to it. The design must enable true peer-to-peer movement, selective data protection, and interoperability. Otherwise, the tracks will only lock us into old hierarchies more quickly. Stablecoins still have the potential to rewrite the rules of money, but if we allow them to become institutionalized rails built for banks rather than people, we will have missed an opportunity to create a more inclusive and autonomous financial system.
The future of money depends on which path we choose. As Joël Valenzuela, Director of Marketing and Business Development at Dash, notes, the question is not whether we regulate stablecoins, but how we design them to balance regulation with the need for inclusion and autonomy. For more information, visit https://cryptoslate.com/stablecoins-were-built-to-replace-banks-but-on-course-to-becoming-one/
