The conversation and activity around stablecoins is picking up again. What began as three subtle mentions in the first executive order about cryptocurrency signed by President Donald Trump has rapidly evolved. The most recent development is that Trump’s own crypto venture, World Liberty Financial, announced the launch of its own stablecoin, USD1, on both Ethereum and Binance Chain, with plans to expand to more protocols.
World Liberty Financial says USD1 will be redeemable 1:1 for the U.S. dollar and backed 100% by short-term U.S. government treasuries, U.S. dollar deposits, and other cash equivalents—but that’s not the real story. The real story is that stablecoins are once again becoming a centerpiece in conversations from both the White House and crypto corporations.
So the real question is, what’s behind this renewed interest?
Stablecoins: An old tool with new momentum
Stablecoins are benefitting from growing tailwinds that, I’d argue, are being pushed down from the White House, and in line with the White House’s pro-corporation approach to the economy, it’s the crypto corporations offering stablecoins that stand to benefit the most.
As a quick refresher, stablecoins are a type of cryptocurrency designed to maintain a stable value, usually pegged to a fiat currency like the U.S. dollar. What gives them that stability is the reserves backing them, which are typically a mix of cash, U.S. government bonds, and other low-risk assets. The idea is that for every stablecoin in circulation, there’s an equivalent value in reserve.
But here’s where it gets interesting, at least for the corporates; issuing stablecoins has become a major revenue stream. Users exchange billions of dollars for those tokens when a company issues their stablecoins. Not all that money just sits in a vault. A significant portion is parked in short-term U.S. government bonds—income-generating assets. And right now, those bonds pay around 4–5% annually.
That may not sound like much, but when you consider that stablecoin issuers often hold tens of billions in reserves. At that scale, even a modest yield means huge profits. For instance, 5% of $1 billion is $50 million in annual revenue, and the largest stablecoin issuers typically have much more than $1 billion in their reserves.
That passive income is a key reason why new issuers like Trump’s World Liberty Financial and even traditional finance giants like Fidelity are now entering the stablecoin arena.
Retail and institutional use cases for stablecoins
Stablecoin issuers are only half of the equation. The other half is user demand. To grow, a stablecoin needs to be used—and historically, most users have been traders and investors. For them, stablecoins serve as a temporary safe haven in volatile markets, a place to park assets between trades, or as the required token to enter a specific trading pair.
But on the institutional side, there’s a different shift happening.
According to a recent Coinbase (NASDAQ: COIN) and EY report titled “Increasing Allocations in a Maturing Market: 2025 Institutional Investor Digital Assets Survey,“ of the 352 institutions surveyed, 84% said they are either already using or seriously considering stablecoins. Their main reason is that stablecoins provide them with transactional convenience and simplified foreign exchange.
In other words, stablecoins offer institutions a frictionless, borderless way to move money, which can lead to significant gains in efficiency and cost savings when you’re moving millions or billions at a time.
The government’s stablecoin playbook
The U.S. government has been a key driver behind this stablecoin resurgence. For the government, it’s not just about being a digital-first, innovative nation, but rather a geopolitical strategy related to U.S. finance.
At the inaugural White House Crypto Summit, Treasury Secretary Scott Bessent said it outright: “We are going to keep the U.S. the dominant reserve currency in the world, and we’re going to use stablecoins to do that.”
Stablecoins allow the U.S. to digitally export the dollar—making it easy for people and institutions across the globe to transact in USD, even without access to U.S. banks. The result this has is more than just stablecoins ending up in the hands of potential users; but more importantly, increased global demand for stablecoins leads to more dollars held in reserves, which translates to increased purchases of U.S. government bonds, which results in dollar dominance and global influence.
The short end of the stick
For institutions, the use case is clear. But for retail investors? It gets shaky.
Most traders don’t need to be in stablecoins 24/7. It’s a tool—a parking lot when markets are volatile or an entry ticket into a specific trade. That’s occasional and inconsistent usage, which means limited long-term demand unless new reasons to hold stablecoins emerge.
If stablecoins will gain mass adoption on the consumer side, they need to become more than just a trading tool. They need real utility.
Imagine if users could spend stablecoins as easily as they do fiat on essentials like rent and groceries or nice-to-haves like subscriptions and takeout. That would make stablecoins much more useful than they are and could even open up a new consumer market. At that point, stablecoins start to look less like financial tools and more like modern versions of PayPal (NASDAQ: PYPL) or Cash App, which I believe is the kind of functionality that will be needed to drive widespread adoption.
Until that happens, it’s hard not to see this as another White House-fueled movement that benefits corporations but leaves consumers right where they started.
Balancing stablecoin innovation with challenges
Now more than ever, there’s an opportunity to build in and around stablecoins.
The momentum is there. The government’s backing it. Corporations are jumping in. Institutions are exploring use cases, but the most significant challenge—as usual—will be solving a pain point that gets users to care and get the product into their hands.
At the end of the day, a product without paying customers will inevitably have a short life span. If stablecoins are going to move beyond this hype cycle, the headlines, and crypto Twitter threads, someone’s going to have to figure out how to make people actually want to consistently use them in the real world, which we arguably have not seen happen yet.
Watch: Blockchain is much more than digital assets
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