Stablecoin Scenarios

Summary

The digital asset ecosystem has graduated from a decade of speculative experimentation to a decisive phase of infrastructure modernization. For fifteen years, the discourse surrounding blockchain technology has been dominated by the volatility of crypto-assets, effectively obscuring the underlying utility of the technology. That era has concluded. We are now witnessing the industrialization of the sector, where stablecoins have emerged not as a new form of money, but as a fundamental settlement innovation (see blog).

The GENIUS Act has provided the regulatory clarity required to transition stablecoins from the periphery of finance to its very core. This legislative milestone has catalyzed a geopolitical shockwave, prompting European finance ministers to declare U.S. stablecoins a greater threat to monetary sovereignty than trade tariffs. But while the Genius act codified “trust” in an instrument (reducing settlement risk to stablecoin issuer balance sheet), it does not address disputes and broader governance issues associated with managing participants across diverse processes and regulatory regimes.

The maturation of stablecoins is not a revolution that overthrows established banks and payments system; it is an evolution that upgrades it. The rails are being replaced while the train is moving, and those who understand the mechanics of the new tracks will determine the destination of global capital.

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Genius Law – What to Expect?

Yesterday President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law, clearing the path for dollar-backed stablecoins. As I’ve argued before, the future of money is a new model of trust, and this legislation provides the regulatory certainty needed for that trust. 

The GENIUS Act is a landmark piece of legislation. It establishes a dual charter system, enabling both federal and state-regulated stablecoin issuers. The key provisions are precisely what the industry needed: a mandate for 1:1 reserves with high-quality liquid assets like cash and short-term treasuries, a prohibition on reusing those reserves, and the designation of issuers as financial institutions under the Bank Secrecy Act. This isn’t just about compliance; it’s about building a foundation of trust that can be exported globally.

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Open Baning is Dead in the US

Last week, I shared the news that JPMorgan has started charging for API access, a move that many see as a death blow to pay-by-bank and open banking in the US. While this might sound dramatic, I believe it’s a necessary reset. The truth is, the current model was never sustainable, and with the CFPB’s recent move to vacate its unlawful 1033 rule, the writing is on the wall. Open banking as we know it is dead in the US.

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Message to Bank CEOs as Stablecoins Take Hold

Bank Payment Strategy in the World of Agentic and Stablecoin

Stripe’s recent moves are massive and will solve stablecoin acceptance (globally). When (and if) a consumer champion goes all in on stablecoin we will see change in payment innovation akin to the “age of enlightenment”.  What are banks to do?


Cards are the most profitable banking product in the history of retail banking, and the power of banking is unlocked within the networks that link them (blog). While the power of banking is unlocked in networks, network innovation is like herding cats as each stakeholder works to protect their existing investments and competitive advantage (see Network Innovation).

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Open Banking in US – Quick Take CPFB Proposed Rule

Before listening to anyone on this topic its important to get a feeling for experience. I’ve been fortunate to run two of the largest online banks: Citi and Wachovia. Wachovia was the very first customer of Yodlee (1999), a service our customers loved. My banks were also scraped endlessly, representing over 30% of our traffic and 20% of our call center complaints. We were also the largest PFM bank (think MS Money and Quicken), keeping our OFX servers up and running was key. After my banking life I spent time rearchitecting payment data flows from point of sale to payment at Google. Then spent 8 years creating Commerce Signals, a payment data business. 
CPFB’s Proposed Rule

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Wallets, APIs and Trust

6 Page Blog

Top of mind today are Wallets, Identity and Application Program Interfaces (APIs). APIs are the core concept behind many new business models investors must decipher:

  • Software as a Service (SaaS)
  • Payments as a Service (PaaS)
  • Banking as a Service (PaaS)
  • Open Banking – PISP, AISP, ..etc
  • Account Aggregation – FDX, Plaid, Akoya, … etc
  • Payment Service Provider (PSP) – Stripe, Adyen, PYPL/Braintree, … etc

Previously, I’ve covered this topic in Open Banking and Open Payments and Trust Networks (2020)  Part 3 – Internet 2.5 (2022), Modularity and Trust (2022) and Evolution of V/MA – Moving Beyond Cards (2021). Summary points from these previous blogs:

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Apple – #1 Payment Innovator

As Apple is set to launch the iPhone 14 today, I was thinking about the significance of ApplePay’s innovations to V/MA and how these innovations benefit the entire network of merchants and consumers. Making payments easy is hard… Apple is the lead “innovator” within the V/MA networks at the consumer touchpoint (with Google, Samsung, PayPal and others in the mix). Their “wallet” and branded integration into both POS AND mCom is unrivaled and represents 93% of all mobile wallet payments in the US (2021).

This 2021 Pulse Network Debit Whitepaper provides the best public view on performance (US Only), with TPV CAGR over 50%. Quite frankly, when it comes to mobile payments, it’s silly to talk about anything else by ApplePay in the US

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