In the early-1990s, telephone companies ran ads for long distance calls highlighting the cost per minute for a U.S. customer to speak to someone in another country. Today, that business does not exist. You can now Facetime or Zoom anyone, anywhere, for free.
What changed?
The shift to Voice over Internet Protocol (VoIP) ultimately drove the price of calls down to nearly zero.
Today, we are experiencing a similar transformation as a global, embedded financial layer emerges within the internet. This will ultimately drive money transfer costs closer to zero, transforming a system long burdened by high fees, delays and middlemen.
Stablecoins are the application driving this evolution. The maxim “adoption is slow until it is fast” captures their explosive growth in recent years. To get an idea of scale, stablecoin transaction volume surged above $27 trillion in 2024 – surpassing Visa and Mastercard combined. Today, there are stablecoin providers, such as Tether, that hold more U.S. Treasuries than entire countries like Germany and the Netherlands.
Stablecoins are no longer a niche experiment. They are becoming more deeply embedded in our global financial ecosystem. As U.S. lawmakers debate stablecoin legislation, the goal should be clear: reinforce the dollar’s dominance as the global reserve currency while extending its reach into corners of the world that traditional banking cannot touch. This should include many important players — not just those based in the United States.
Two Paths, One Future
Congress is at a crossroads between two general positions. One is a closed-market approach in which U.S.-based stablecoin issuers would be privileged over their non-U.S. competitors. This is shortsighted and will ultimately stifle innovation.
The other approach is to build a regulatory framework that cultivates fair and free global competition. By allowing international players like Tether to compete alongside U.S.-based issuers, the U.S. can foster a dynamic ecosystem where the best ideas and technologies rise to the top. Competition is what would drive excellence.
There is a myth being perpetrated that only U.S.-based issuers back their tokens with sufficient reserves, attest to those reserves, and take necessary steps to prevent money laundering and terrorist financing. That simply is not true. Tether, the largest stablecoin issuer, assisted American law enforcement and over 230 law enforcement agencies in 50 countries to block $2.5 billion dollars in illicit activities worldwide. The reality is that responsible stablecoin issuers exist both inside and outside the U.S. (Tether, which is based in El Salvador, accounts for more than half the stablecoin market.)
Overly restrictive regulation could also backfire on the U.S. economy. If stablecoin legislation drives foreign-based companies out of the U.S., it could result in decreased demand for U.S. Treasuries, weakened dollar dominance and a less competitive stablecoin space.
Congress stands at an important crossroads — “two roads diverged” as Robert Frost once wrote. It could seize this moment to craft a regulatory framework that champions competition and transparency, or it could take the narrow road by taking a protectionist approach and choking innovation. The market’s diversity is not a bug to fix. It’s a feature to harness.
It’s time to make a careful choice as the stakes could not be higher. Let’s make sure we get this right for the future of finance.
