The Case for Stablecoins: Utility, Scale, and the $15 Trillion Opportunity
Stablecoins are not the next Bitcoin—they’re the infrastructure layer that could reshape how money moves in the internet age.
This is the first in a five-part series where I dive into the investment theses I’m most excited about in Web3. These theses reflect areas with early signs of product-market fit, clear real-world demand, and asymmetric upside.
We kick things off with what I believe is Web3’s most practical and transformative innovation to date: Stablecoins.
Thesis 1: Stablecoins
Stablecoins are the killer app of Web3. They’re the answer to the long-standing criticism that Web3 lacks real-world utility.
While Web3 tried to position tokens and cryptocurrencies as the new form of money, it failed to resonate with the larger population. The main reason is the disconnect between two very different functions:
What acts as a vehicle for financial upside or wealth preservation? A store of value.
What acts as a well-adopted instrument for people to exchange products and services? A medium of exchange and a unit of account.
Now, theoretically, sound money is defined as something that possesses all three properties: a medium of exchange, a unit of account, and a store of value. Bitcoin was introduced as something that shares all of these characteristics, against the devaluing fiat currencies all over the world. Over the period, narratives have largely focused on the latter part, which is the store of value. The reason being, Bitcoin hasn’t fared well in the other two aspects - a medium of exchange and a unit of account. Because even Bitcoin isn’t insulated from market forces, or the economic and political power of nation-states.
What happens when a nation-state bans Bitcoin? Like China? - No access
What happens when investors, broadly markets, take money out of risk assets, Bitcoin perceived as one? - No demand
What happens when nobody wants to sell Bitcoin? - No supply.
Enter volatility. Are we going to re-price every good and service every day when things are denominated in BTC?
Further, you need a standard to anchor the price of goods, services, and even Bitcoin according to supply and demand. So, is Bitcoin a sound money or currency then? It just gets more confusing from there...
What is money? What is wealth?
While creating sound money with store-of-value properties is important, that’s not the fundamental property of money. The essence of money is that it functions as an accepted legal tender in a jurisdiction or across jurisdictions: something people can use for commercial exchange, to get paid or pay, or to save in the short term.
It goes without saying: if growing or preserving wealth is your goal, simply holding money isn’t enough. For that, you need to invest, compound your investments, or create value for society and be able to capture a part of that value. In short, it requires taking risks.
It isn’t smart to take risks with money that you hold to pay bills, pay your employees, or pay off your debt. But if you don’t take risks, how can you expect your money to grow? This is the fundamental dichotomy that Bitcoin tried to solve, or the Austrian economists who tried to define ‘sound money’.
When someone holds crypto, including Bitcoin, they are essentially taking a risk. It might go ‘up-only’ in the long term, but you are susceptible to volatility. Most often, you are taking the risk on the adoption and success of an emerging technology, which is still early in its lifecycle, considering where it will end up.
Therefore, cryptocurrencies or tokens are not going to replace money. They will be a bucket that people transfer some share of their money to preserve or grow wealth.
Enter Stablecoins
So, where does that leave the promise of Web3 - to create a better internet based on ownership, to transform the inefficient, access-resistant, and opaque financial infrastructure we have today?
The answer is stablecoins.
After all, in this internet era, dealing with money should be as simple and inexpensive as sending a WhatsApp message.
Stablecoins will, for the most part, remain pegged to fiat currencies. Let’s leave the responsibility of managing fiat to nation-states. Because money requires trust and stability, and that’s not something technology, even if decentralized and trustless, can guarantee on its own.
There are too many forces at play: economic and monetary policy, market dynamics, trade, war and peace, governance, security, and social contracts. That’s a lot of variables for any system to solve, let alone one built purely on code and game-theoretic coordination and incentive mechanisms.
Opportunities for Stablecoins
Stablecoins have seen consistent growth over the last years, despite the market cycles that Bitcoin or cryptocurrencies have gone through.
The total market cap of stablecoins stands at ~212bn1 today, which will position it around the 50th to 60th largest entities by market capitalization globally, and as big as Ethereum today. Clear evidence of product-market fit.
So far, crypto users have driven most of this growth as a safe haven to store their wealth while taking profits out of their crypto holdings. But the next wave will be powered by real-world adoption, alongside the continued growth of the crypto ecosystem.
How big is this opportunity?
E-commerce currently represents 17% of global commerce (2024)2. Stablecoins are to the internet what e-commerce is to traditional commerce: a native evolution. If we apply that 17% share to the global M2 money supply ($93 trillion)3, we get a $15.8 trillion opportunity. That’s 65x growth from where stablecoins are today. Extrapolating that growth to the remaining wave of internet adoption, stablecoins may well be one of the few 100x opportunities in Web3 over the next decade.
What are the key drivers of this growth?
Now, whether you're a VC or an active crypto participant, here are the sub-themes I believe are worth closely tracking to capitalize on the stablecoin opportunity.
1. Emerging markets and cross-border transfers (Africa, Latin America, Parts of Asia)
Businesses replacing banks or TradFi rails with stablecoin-based solutions - pay suppliers and employees across and within borders, avoid FX costs and delays, manage treasury and working capital, and handle settlements efficiently
Individuals hedging against inflation - accessing USD-based savings, payments, and credit.
Expats sending money - unlocking exotic remittance corridors, unlocking money flow in and out of countries
2. Stablecoins & DeFi
RWA moving on-chain - Stablecoins are the necessary base layer for expressing USD/any fiat value and for clearing transactions across DeFi protocols that will power the tokenized markets and RWA on-chain.
Stablecoin-based DeFi will explode once corporate treasuries and TradeFi players participate via permissioned pools.
3. Stablecoin Issuance
Interest-bearing stablecoins (e.g., Ethena’s sUSDe).
Programmable stablecoins (compliance, embedded logic, yield-sharing).
Regulated, fully-reserved stablecoins issued by banks or fintechs.
Region-specific stablecoins (EU, SE Asia, Africa, Latin America): This will be a major interest for many emerging economies as free flow of USD simply threatens the sovereignity and economic stability of many countries.
4. Middleware and tooling
Infrastructure and middleware for institutions, fintechs, and apps for issuing, integrating, and managing stablecoins.
Cross-chain protocols to move stablecoins across Ethereum, Solana, L2s.
Price feeds, analytics, and behavioral data layers on stablecoin usage.
5. AI & Stablecoins (Holy grail)
As agents and protocols become autonomous, stablecoins offer the best medium of exchange for AI-driven transactions, providing price stability, low latency, and global compatibility.
Enable machine-to-machine commerce and AI-native economic interactions with on-chain protocols.
Final Thoughts
Stablecoins aren’t the shiny new thing. They’re the quiet infrastructure play that’s already embedded in crypto’s daily operations and now stepping into the real world. As emerging markets, businesses, and even machines start demanding fast, reliable, and borderless money, stablecoins are positioned to be the internet’s financial base layer. They’re not here to replace money, they’re here to make it work better. For investors, founders, and builders, this is one of the clearest signals in Web3: follow the utility.
If you’re a founder building in this space or at the intersections of any of the themes I’ll be covering, feel free to reach out via Telegram: @raj33van. Always happy to connect and help however I can.
If you’re a fellow investor or operator and want to jam, debate, or trade notes on this thesis or adjacent ideas, I’m very open to that too. Always keen to refine thinking through open conversation.
And if you’re just curious, exploring, or thinking through similar questions, your thoughts, reactions, and feedback are always welcome. Drop a comment or reply: I read everything.
Disclaimer: The views expressed in this article are solely my own and do not represent those of any organization I am affiliated with. This content is for informational purposes only and does not constitute investment advice. Please do your own research before making any financial decisions.
https://www.coinglass.com/pro/stablecoin
https://www.statista.com/statistics/534123/e-commerce-share-of-retail-sales-worldwide/
https://streetstats.finance/liquidity/money