The $230 billion stablecoin market is at a turning point. With the Trump administration aiming to make the US the global crypto leader and rapidly expanding stablecoin use, clear regulations seem likely. But will this actually improve stablecoins, or just make them bigger tools for speculation?
The Stablecoin Paradox
Stablecoins were designed to connect the crypto and traditional finance worlds. However, they’re mostly used within the crypto market itself – for arbitrage, speculation, and navigating exchange quirks. High-profile collapses like TerraUSD and concerns about opaque reserves show that today’s stablecoins share the weaknesses of the systems they were meant to replace. While some are backed by assets like treasury bonds, this introduces new risks. Essentially, many stablecoins just repackage risk instead of eliminating it.
Political Games
Trump’s push for a stablecoin bill by 2025 could bring much-needed regulation. But if the rules are influenced by lobbying and self-interest (like Trump-linked stablecoin ventures), it could lead to weak oversight and favoritism. The Terra collapse showed that without strong safeguards, stablecoins are risky. This could also create a situation where regulations benefit a few powerful players, leaving smaller, more ethical projects behind.
Empty Promises?
Stablecoins are often touted as a way to “bank the unbanked.” However, accessing them usually requires using crypto exchanges and having a good understanding of digital finance – something many underserved people lack. In reality, they mostly benefit those already in the financial system: traders and large investors. True financial inclusion needs better infrastructure, like AI-powered wallets, not just dollar-pegged tokens.
Redefining Value
With unclear reserve rules and limited access for those who need it most, the US should consider whether to support existing models or encourage stablecoins that truly power the future. The ideal stablecoin would be intelligent, AI-backed, transparent, and linked to real assets like AI computing power or DeFi lending. To achieve this, policymakers need to mandate real-time proof of reserves, reward stablecoins with real-world uses, and promote over-collateralized models to prevent failures.
The Verdict?
Trump’s crypto plans aren’t inherently good or bad. It’s a test of whether the industry can move beyond short-term profits. Stablecoins won’t revolutionize finance by simply mimicking dollars; they need to create new forms of value. The key question isn’t whether Trump’s policies will help stablecoins, but whether developers and regulators will demand a system that’s transparent, reliable, and truly innovative.
About the Author: Ian Estrada is CEO of Maitrix, building DeFi infrastructure for AI tokens. He has extensive experience in payments, lending, and credit risk./p>
