Stablecoins: A Decentralized Payment Revolution
Author: Chris Dixon, Executive Partner at a16z crypto
Translation: Zombit
The Internet has made information free and global. So why are remittances still difficult and expensive?
The early Internet painted an ideal future: anyone could freely publish content, create applications, and conduct transactions without others’ permission. Open and neutral protocols like email and websites ignited a wave of innovation and entrepreneurship. Yet, we seem to have deviated from this path at some point.
Today, the global financial system resembles a closed network puzzle dominated by corporate monopolies: centralized, closed, and extracting value. Behind every transaction lies an entire set of intermediary structures akin to a “Rube Goldberg machine” — POS machines, payment processors, acquiring banks, issuing banks, local banks, remittance banks, foreign exchange platforms, credit card organizations, and so on — each step taking a cut, causing delays, and imposing restrictions. This not only creates a tax burden on businesses but also stifles innovation, transforming what should be a “neutral infrastructure” for cash flow into a high-friction bottleneck.
However, stablecoins (cryptocurrencies pegged to stable assets like the US dollar) offer a reboot opportunity, allowing money to return to the original spirit of freedom on the Internet.
Disruptive Opportunities Brought by Stablecoins
The current payment infrastructure was not born for the Internet but designed to accommodate a world filled with “fee-charging intermediaries.” These intermediaries emerged to manage local cooperation, fraud prevention, and operational risks. Even today, international remittance costs can reach as high as 10%. (As of September 2024, the average cost for sending $200 is 6.62%.) This cost constitutes a reverse tax system for billions of workers globally. The current financial system is slow, closed, and excludes a vast number of users, leaving many people outside the global economic system.
For many businesses, traditional payment methods are also fraught with efficiency bottlenecks. For instance, B2B payment processes from Mexico to Vietnam can take 3 to 7 days, and the transaction cost for every $1,000 can reach $14 to $150, passing through as many as five intermediaries. Stablecoins can bypass these traditional settlement systems (like SWIFT) and their lengthy processes, achieving near-instant and nearly zero-cost cross-border payments.
This is not a theoretical vision but a reality that is already happening. Companies like SpaceX are using stablecoins for fund transfers, including sending money from currency-volatile countries like Argentina and Nigeria. ScaleAI is paying global workers faster and at lower costs using stablecoins.
On the B2C front, Stripe has become the first mainstream platform to offer cryptocurrency payments, charging only 1.5% in transaction fees, half that of traditional payment platforms. For industries like supermarkets with extremely low profit margins, saving 1.5% could double their profits. With competition in the blockchain market, transaction fees are expected to decrease further.
Unlike traditional financial systems, stablecoins are inherently global from the start. They operate on blockchains (a type of open, programmable, and composable network). Businesses do not need to negotiate with multinational banks one by one; they simply connect to the network. In 2024, the total transaction volume of stablecoins reached $15.6 trillion, nearly equivalent to Visa. Although most of it is financial flow rather than retail payments, it still indicates that financial infrastructure is transforming.
This is a genuine restructuring opportunity, as Stripe describes it: “A room-temperature superconductor for the financial industry” — transmitting money with zero loss, akin to the superconducting phenomenon in energy.
Stablecoins: The WhatsApp Moment for Money
Stablecoins are the first to enable money to possess “open, instant, borderless” characteristics akin to email.
Imagine the evolution of text messaging. Before the advent of WhatsApp and Telegram, a cross-border text message cost 30 cents without a guarantee of delivery. Now, anyone can communicate instantly, for free, and without limits. Payments today resemble text messaging from 2008 — blocked by national borders, guarded by layers of intermediaries, constrained by design.
Stablecoins provide a ground-up alternative. Unlike the patchwork of traditional systems, stablecoins can flow seamlessly on blockchains. These systems feature programmability, modular design, and cross-border scalability. Today, stablecoins can significantly reduce remittance costs: sending $200 from the US to Colombia traditionally costs $12.13; with stablecoins, it only costs $0.01. While converting stablecoins to local currency may still incur costs (ranging from 0% to 5%), competition is driving those costs down.
Stablecoins are disrupting cross-border cash flow just as WhatsApp disrupted international long-distance calling.
From Bottlenecks to Breakthroughs: Regulatory Changes
While regulation is often seen as a hindrance, clear and prudent regulatory frameworks are actually key to liberating innovation.
For a long time, decentralized finance (DeFi) has been trapped in a “self-contained” cryptocurrency economy, not because the technology itself is ineffective, but because existing systems make it difficult to integrate with the traditional financial world.
This situation is changing now. Legislatures and regulatory bodies are working to establish clear rules for stablecoins and cryptocurrency markets, hoping to protect consumers, maintain US competitiveness, and encourage innovation. For example, regulations distinguishing “network tokens” from “security tokens” help weed out bad actors while providing clear construction space for good entrepreneurs. Congress is also drafting new legislation, which could become the first stablecoin regulatory act in the US this year.
Building Public Infrastructure for Everyone
Traditional finance is built on closed corporate networks, whereas the Internet has already demonstrated the global collaboration and innovation potential brought by open protocols (like TCP/IP and Email).
Blockchain is the “internet-native financial layer,” combining the composability of public protocols with the economic incentives of private enterprises. These systems exhibit neutrality, auditability, and programmability. With stablecoins, we will finally have a truly “open monetary infrastructure.”
This can be likened to a “public highway system”: private companies can still build vehicles, operate services, and develop businesses, but the roads themselves are neutral and open to all.
Stablecoins and blockchain are not only lowering transaction fees but are also creating entirely new financial applications:
- Automated machine-to-machine payments: AI-driven markets can automatically mediate and pay for resources.
- Micropayment models: Instant rewards for media, music, and AI contributions.
- Fully auditable payment processes: Enhancing transparency for public entities like governments.
- Intermediary-free global trade: Instant settlement and nearly zero-cost cross-border transactions — no longer a fantasy.
Today, technology is mature, demand is urgent, and the policy environment is gradually aligning, making these scenarios increasingly real. A stablecoin bill may be voted on this year, and major regulatory bodies are designing more appropriate frameworks. Just like early Internet entrepreneurs experienced explosive growth after gaining clear legal space, the cryptocurrency industry is now ready to cross this threshold, led by stablecoins, transitioning from financial experiments to infrastructure.
We need not patch the old system; we can build a better new one.
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