Stablecoins Gain Traction as Crypto Becomes Part of Mainstream Finance

Crypto has become increasingly integrated into global markets, reacting to macroeconomic forces like other financial assets. However, beneath the volatility and speculation, something more interesting is happening.

Crypto is becoming finance, some of its technologies are being adopted as part of the infrastructure of mainstream finance. Stablecoins, in particular, are gaining traction. They aim to solve a fundamental problem: making money programmable.

The regulatory landscape is shifting from trying to stop crypto to institutionalizing it. Europe's MiCA (Markets in Crypto-Assets) regulation has led to a shake-out, with fewer than 10% of crypto firms receiving authorization to continue operating in the EU. This marks a shift towards a clearer regulatory perimeter.

The next challenge is interoperability, ensuring that regulated digital assets can move across jurisdictions. The UK and US are discussing interoperable approaches to stablecoins through the Transatlantic Taskforce for Markets of the Future.