A $300 billion market. Dominated 98% by instruments pegged to the dollar. And a European share of 0.2%. These three figures, drawn from an analysis by the Bank of Italy and confirmed by the Fed’s FEDS Notes published in March 2026, describe a monetary reality that has been built without any treaty, vote, or public deliberation.

Stablecoins, these cryptocurrencies whose value is indexed to a sovereign currency, have ceased to be a technological curiosity. They have become a real payment infrastructure for tens of millions of people in emerging economies. And this infrastructure is almost exclusively wired in dollars.

The Essentials

  • The global stablecoin market reaches $300 billion, with 98% pegged to the dollar and 0.2% to the euro, according to the Bank of Italy and the Fed’s FEDS Notes (March 2026).
  • On-chain transaction volume reached $33 trillion in 2025, a 72% increase year-over-year, according to Artemis Analytics, cited by Bloomberg (January 2026).
  • Nigeria: approximately $22 billion in stablecoin transactions (all categories) according to Chainalysis/IMF; Indonesia: rapidly growing volumes; Brazil: hundreds of billions of dollars in crypto-assets annually, of which ~90% in stablecoins.
  • Stablecoins backed by US T-Bills mechanically create structural demand for American debt, extending dollarization to economies whose central banks decided nothing about it.
  • Europe has a regulatory lever with MiCA, but deployment remains slow against a US GENIUS Act that explicitly aims to secure the dominance of digital dollars.

A trader in Lagos paying a Chinese supplier in USDT, a Brazilian entrepreneur saving in Tether to protect against a volatile real, an Indonesian exporter settling operations in dollar stablecoin on a mobile platform: these gestures, repeated tens of millions of times each month, are rewriting the global monetary geography. Not by ideology. By pragmatism.

33 Trillion Reasons to Take the Matter Seriously

The figure is dizzying but must be read correctly: $33 trillion in on-chain stablecoin transactions in 2025, up 72% from the previous year, according to Artemis Analytics, cited by Bloomberg in January 2026. This volume now exceeds the annual GDP of the European Union. It includes speculative movements, arbitrage between platforms, transactions counted multiple times in settlement chains. It does not directly reflect $33 trillion in real economy activity.

But disaggregated data tells a different story. In real payment corridors, those connecting Nigerian importers to their Asian suppliers or migrant workers to their families, stablecoins have ceased to be a niche. Tazapay, a cross-border payments operator active in Southeast Asia and Africa, notes significant volume growth in Indonesia year-over-year. Brazil handles hundreds of billions of dollars in crypto-assets annually — Chainalysis estimates approximately $318 billion received between July 2024 and June 2025, of which nearly 90% in stablecoins, USDT and USDC. The figure of $78 billion sometimes cited corresponds only to transactions reported to Brazilian tax authorities, not the actual total. Tether remains the dominant issuer, with approximately 59 to 61% of global market share in 2025.

What makes these figures analytically interesting is their reason for existing. Stablecoins do not take hold in emerging economies because they are technologically superior to conventional bank transfers. They take hold because the alternatives are costly, slow, or inaccessible. An inter-zone SWIFT transfer takes two to five business days and costs between 3% and 8% in fees. A USDT transfer on a public blockchain takes minutes for a marginal cost. For an importer in Lagos who must pay a Guangzhou supplier, the calculation is straightforward.

This is precisely the angle that Tyler Cowen, economist at George Mason University and a central figure in the American liberal debate, developed in his recent work on platform economies: markets do not organize around institutions preferred by regulators, they organize around the lowest friction. When formal infrastructure is expensive, slow, or discriminatory, a less regulated but more efficient alternative captures the market de facto. The absence of a decision is itself a decision.

How a Stablecoin Becomes an American Obligation Without Saying So

The mechanics are less abstract than they appear. Tether, the issuer of USDT, the most used stablecoin in the world, backs each token issued with a dollar reserve. These reserves are largely invested in short-term US Treasury bills, T-Bills. As of December 31, 2025, Tether’s total exposure to US T-Bills — direct and indirect — is estimated at approximately $135 to $141 billion, making it one of the world’s largest holders of short-term American debt, ahead of several European central banks.

The Fed explicitly analyzed this in its March 2026 FEDS Notes: each dollar of stablecoin issued and used in an emerging country constitutes a dollar of indirect demand for American debt. The mechanism is automatic, structural, and requires no active American political decision. It is enough that issuers manage their reserves prudently, which they have an incentive to do to maintain confidence in their parity.

This point deserves attention. Classical dollarization, which economies like Ecuador or El Salvador chose deliberately, results from a sovereign decision. Digital dollarization through stablecoins, meanwhile, results from millions of individual decisions, aggregated into a macroeconomic reality that the central banks of the countries concerned neither decided nor anticipated. Nigeria’s central bank did not vote to allow a growing share of its commercial flows to pass through a private dollar infrastructure. According to Chainalysis and the IMF, Nigeria processed approximately $22 billion in stablecoin transactions between July 2023 and June 2024, all categories combined — a volume that developed outside any decision by Nigerian monetary policy.

This dynamic directly fuels monetary room for maneuver. A country whose growing fraction of internal transactions and commercial flows is denominated in dollars gradually loses its capacity to use the exchange rate as an adjustment tool. Monetary policy remains formally sovereign, but it operates on a monetary base that is partially externalized in fact. This is what economists call currency substitution, a phenomenon known in Latin America since the 1980s, but now deploying at a speed that traditional banking channels never permitted.

Europe Chose Caution, the Dollar Chose Ground

The divergence between Europe and the United States on this subject is not accidental. It reflects two regulatory philosophies confronting each other in real time on a global market.

Europe produced MiCA, the Regulation on Markets in Crypto-Assets, which came into force in 2024. MiCA is technically serious: it imposes capital requirements on issuers, transparency rules on reserves, and reporting obligations to regulators. It creates a framework protecting users against default risks. But MiCA was designed with an implicit priority: financial stability before deployment. The result is that no large-scale euro stablecoin has emerged within the European regulatory framework, and the cross-border payment market in euros remains dominated by traditional banking channels, expensive and slow.

The United States followed a different trajectory. The GENIUS Act, introduced on May 21, 2025, and passed by the US Senate on June 17, 2025, creates a federal framework for dollar stablecoin issuers, requiring 100% backing in liquid dollar assets, but without blocking deployment. The objective, explicit in legislative debates, is to secure the dominance of digital dollars in emerging payment corridors before other currencies can establish themselves there. The legislation states the thing without detour: dollar stablecoins are an instrument of projection of American monetary power.

This is where Joseph Stiglitz’s analysis, economist and Nobel Prize winner who has devoted considerable work to asymmetries of power in international monetary relations, provides a useful counterpoint. Where Cowen sees the market rationally allocating according to friction, Stiglitz insists on the structural dimension of power: the rules of the game are not neutral, they are established by those who have already won. The dollar is dominant because the United States has spent seventy years building institutions, networks, and legal instruments that reinforce this dominance. Stablecoins merely add a digital layer to an existing architecture of power.

Both readings are compatible. The low friction is real, the market responds to it. But this friction is itself the product of deliberately constructed infrastructure. What the Europe-United States divergence on MiCA and the GENIUS Act shows is that digital monetary policy is not the natural extension of traditional monetary policy: it partially frees itself from it, on corridors where central banks are not present.

Where the Euro Should Be and Is Not

The payment corridors where the euro would be naturally dominant are identifiable. Trade between Europe and North Africa, transfers from the African diaspora in Europe to their families in Senegal, Mali, or Côte d’Ivoire, commercial flows between the European Union and the Balkans or Turkey: on these corridors, the euro should have a structural comparative advantage. The eurozone is Africa’s leading trading partner, ahead of China and the United States. It should be the de facto currency of current exchange there.

It is not. On these corridors, USDT and USDC, the two dominant dollar stablecoins, have captured market share that European banks either could not or would not contest. Costs for transfers from the African diaspora in Europe remain among the world’s highest, around 8% for remittances to sub-Saharan Africa according to World Bank data. It is precisely in this gap that stablecoins lodge themselves.

The problem is not solely technological. Europe’s difficulty in producing digital giants is a symptom of the same phenomenon: a structural preference for ex-ante regulation over deployment, which protects existing markets at the expense of emerging ones. In the case of stablecoins, this choice has a direct geopolitical consequence. Each month that passes without a large-scale euro stablecoin becoming accessible in the Africa-Europe corridors is another month where users grow accustomed to a dollar infrastructure, where developers build their applications on a dollar stack, where technical standards align with dollar protocols.

Network effects in payments are powerful and semi-irreversible. Ethiopia illustrates how structural reforms take time to produce effects and how infrastructure bifurcations create durable dependencies. When a country has migrated its payment systems to a particular infrastructure, going backwards costs dearly and takes years.

MiCA Can Still Open a Space, If Europe Chooses to Act

The analysis is not one of inevitable decline. It is one of a closing window, with measurable timing.

MiCA provides a framework within which euro stablecoins can be legally issued, with serious guarantees for users. The ECB is working in parallel on wholesale digital euro, an interbank instrument that would allow large transactions to be settled without passing through private intermediaries. These two projects are complementary: wholesale digital euro secures settlement between financial institutions, MiCA stablecoins can irrigate retail payment corridors.

The question is one of tempo. The first MiCA licenses for euro stablecoin issuers are expected for 2025-2026, but no operator has yet reached the critical size needed to seriously contest USDT on emerging corridors. Discussions on wholesale digital euro are in the prototyping phase, with operational deployment envisioned around 2028. Until then, the market continues to consolidate in dollars.

Tyler Cowen would probably frame the choice thus: Europe can wait to have the perfect regulatory framework, or it can accept that a good framework deployed quickly is better than a perfect framework deployed too late. The distinction is not trivial. It implies a risk tolerance that European institutions do not spontaneously possess.

Yet there are recent precedents of a Europe that chose to play the field rather than arbitrate from outside. Data regulation, regulation of digital platforms, industrial policy on semiconductors: in these areas, Europe chose to use its market weight as a lever, not only as a defensive line. The same logic applied to euro stablecoins would consist in conditioning access to the European internal market, one of the world’s largest consumer markets, on the use of MiCA-compliant stablecoins on corridors where the euro is the natural currency. This is a lever that Europe has not yet activated.

The Long Arc: What the ECB Still Assumes

ECB projections on the international status of the euro twenty years out assume that the European currency will remain the world’s second reserve and settlement currency. This position rests on solid fundamentals: the economic weight of the eurozone, the depth of its bond markets, the credibility of its monetary institutions.

But these projections were constructed in a world where currency circulates mainly through regulated banking channels, where central banks control payment infrastructure, and where currency substitution is a slow and visible phenomenon. Stablecoins alter these basic assumptions. They enable rapid, granular currency substitution, largely invisible to conventional central bank statistics.

If dollar stablecoins establish themselves as reference infrastructure in sub-Saharan Africa and Southeast Asia over the next five years, two of the zones with highest expected economic growth over the following decade, the euro’s position as the second international currency will not be erased overnight. But it will be progressively sidelined, on the very markets where the euro should have advanced.

This is not a catastrophist projection: it is the extrapolation of current trends with their assumptions made explicit. The trend can be inflected. It requires for that decisions, not expectations.

The real question that remains open for European institutions is this: in twenty years, if it is found that the euro has lost ground in emerging payment corridors to the advantage of digital dollars, will one be able to say at which moment the bifurcation was still reversible, and what decision would have sufficed to change it?

Sources

  1. Federal Reserve FEDS Notes — “Payment Stablecoins and Cross-Border Payments: Benefits and Implications for Monetary Policy”, March 2026: https://www.federalreserve.gov/econres/notes/feds-notes/payment-stablecoins-and-cross-border-payments-benefits-and-implications-for-monetary-policy-20260330.html
  2. OpenFX 2025 Report — on-chain stablecoin transaction volumes and emerging payment corridors
  3. Bank of Italy — analysis of currency distribution in the global stablecoin market
  4. Tazapay — cross-border payment volume data in Southeast Asia and Africa
  5. World Bank — remittance cost data to sub-Saharan Africa (Remittance Prices Worldwide)
  6. Tether — quarterly reserve reports, December 2025
  7. Banca d’Italia, Scotti speech — stablecoins in payment systems (Sept. 2025): https://formatresearch.com/en/2025/09/18/stablecoin-nellecosistema-dei-pagamenti-banca-ditalia/
  8. Federal Reserve FEDS Notes — Stablecoins in 2025 (April 2026): https://www.federalreserve.gov/econres/notes/feds-notes/stablecoins-in-2025-developments-and-financial-stability-implications-20260408.html
  9. Bloomberg/Artemis Analytics — Stablecoin Volume $33 Trillion (+72%) in 2025: https://www.bloomberg.com/news/articles/2026-01-08/stablecoin-transactions-rose-to-record-33-trillion-led-by-usdc
  10. Tether Q3 2025 Attestation Report (BDO): https://tether.io/news/tether-attestation-reports-q1-q3-2025-profit-surpassing-10b-record-levels-in-us-treasuries-exposure-accelerating-usdt-supply-amidst-worlds-macroeconomic-uncertainty/
  11. Wikipedia GENIUS Act / Arnold & Porter: https://en.wikipedia.org/wiki/GENIUS_Act
  12. OpenFX Report 2026 — stablecoins cross-border: https://www.openfx.com/stablecoins-cross-border-payments-report-2026
  13. IMF — Stablecoins in Nigeria (June 2026): https://www.imf.org/en/news/articles/2026/06/16/stablecoins-in-nigeria
  14. White House — Fact Sheet GENIUS Act (July 18, 2025): https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/