When stablecoins first came onto the scene in the blockchain industry, they promised global money.
Finally, commerce would be frictionless, and we could use the USD and other currencies on peer-to-peer blockchains with low fees, fast settlement times, and next-to-no friction.
Yet that isnt what came to pass. Today, while stablecoins are a big deal, the ecosystem is a tangled messunscalable blockchains, insecure bridges, and more tokens than anyone can track. Instead of speeding things up, its slowing everything down.
Instead of one global currency we can all use, we have a dollar divided across dozens of ledgers: fragmenting liquidity, introducing security vulnerabilities, and reintroducing the very friction stablecoins were meant to eliminate.
The stablecoin explosion: promise turns into pandemonium
Stablecoins were supposed to fix a problemdigital currencies like BTC and Ethereum are inherently volatile due to their fixed supply.
However, what started with BitUSD and Tether has morphed into a chaotic flea market of USDC, USDT, DAI, FDUSD, crvUSD, and dozens of other dollar derivatives. These are spread across Ethereum, Solana, Tron, Base, Binance Chain, and dozens of other ledgers.
What started as a quest to create one unified, global, stable form of money has turned into monetary balkanization. Which makes you wonderwhy not just use the USD instead?
The problems with the stablecoin ecosystem in 2025
The biggest problem with stablecoins being spread across so many different ledgers is liquidity fragmentation. Each blockchain has its own pools, markets, and arbitrage quirks. This increases fees, limits the potential of DeFi, and destroys the seamless experience digital cash should offer.
Since these blockchains are inherently limited in transaction processing capacity, the different stablecoins must cross bridges and roll up to layer two solutions. A quick look at the Ronin bridge hack and others like it will show why these security black holes are a bad idea.
The next problem is that many chains and coins have led to regulatory chaos. Whats legal and clear in one jurisdiction may not be in another, and while some stablecoins like USDC are fully audited and backed, some refuse to prove it. Yet others, like DAI and crvUSD, are algorithmic. After the chaos unleashed by Do Kwons UST in 2021, the recently passed GENIUS Act in the USA has banned them while they remain legal elsewhere.
All of these, the regulatory uncertainty, the bridges and rollups, and the fragmentation caused by ever-increasing options across dozens of chains, lead to a subpar user experience. Imagine how much simpler it could be to have half a dozen interoperable stablecoins operating on a single scalable ledger.
Imagine every WhatsApp message had to be wrapped, bridged, or translated before delivery. Thats stablecoins today. Gavin Lucas, CoinGeek.com
Interoperability across ledgers is a myth
Regarding the ever-vague term Web3, the go-to answer for how it will work is interoperability. Industry bigwigs tout Chainlink, bridges, and shared APIs as the solutions to the problems that multiple ledgers have introduced.
However, interoperability isnt the same as unity. Just as the internet needed TCP/IP, global money needs a shared protocol. Compatible interfaces wont do when a single unified ledger is an option.The entire patchwork quilt of solutions dreamed up by industry leaders is nothing more than kicking the can down the road. Just as the competing networks that made up the early internet folded as TCP/IP ate the world, so too will most blockchains and the tokens that live on them.
Make no mistake: this fragmentation isnt some hypothetical problem that only concerns blockchain puristsit has real-world consequences. It slows down DeFi, causes transactions to fail, makes institutions skeptical of the technology, and causes users to shrug and wonder what all the hype was about.
What it could and should look like
Those of us who call for unity arent talking about having a single stablecoin issuerwere talking about all of them operating on a unified scalable ledger. Theres plenty of room for competition, and the market can decide which issuers they trust and want to use.
However, theres no need for dozens of ledgers or any of the bridges between them. The original Bitcoin protocol, now known as BSV, is capable of one million transactions per second with fees of $0.0001 per transaction. With token protocols like 1Sat Ordinals and STAS, its possible to issue stablecoins directly on a legally compliant, scalable blockchain.
Imagine if all the value and liquidity on all the different blockchains merged onto onewed have super liquidity pools, seamless token swaps, DeFi dominance, and stablecoins we could use in every type of application, from games to cybersecurity tools to Web3 apps.
Theres no future for stablecoins without scalable infrastructure. Eventually, everything will have to move onto one chain, and theres currently only one capable of delivering the scalability required to make it work.
Rebuilding the tower
The dream of global electronic cash is still alive, but not if we keep building silos.
While this author questions whether on-chain fiat is an innovation, he accepts that its a necessary bridge between inflatable fiat and hard money like Bitcoin. Like it or not, most users dont want to use currencies that change value in real-time, so stablecoins will be a necessary stepping stone if mass adoption is to occur.
What we need now is a shared language on a single base-layera tower built on a foundation that can scale. Until then, stablecoins will remain a fragmented illusion, and the path to adoption will remain slower than it should be.
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