Stablecoins just crossed $200B: Here's why that matters for investors

Good morning.

Stablecoins just crossed $200 billion in total value. That's more money than many banks hold in deposits.

Most people think they're just "crypto dollars." But they're actually infrastructure that's reshaping how money moves globally—and creating massive opportunities for investors who understand what's happening.

In today's investor education:

Hey there,

Alberto here with your Saturday newsletter.

This week I watched a fascinating discussion on CNBC about stablecoins, and I want to break down what it means for investors like you.

Because this isn't just about crypto. It's about how money itself is evolving—and the infrastructure companies building that future are massive investment opportunities.

Here's what the CNBC host asked: "If you're in the United States, why would you use a stablecoin pegged to the dollar instead of just using digital dollars through your bank?"

It's a smart question. And the answer reveals why stablecoins matter.

The difference isn't what you're using (dollars). It's where those dollars move.

Traditional banking dollars move through the banking network. When you send money domestically, it takes hours or days. When you send money internationally, it takes several days and costs tens of dollars in fees.

Stablecoins move on blockchain networks. Transactions settle in seconds, not days. And they cost pennies, not tens of dollars.

Cross-border payments are where this gets interesting.

Right now, if you send $1,000 from the US to the Philippines through traditional banking, it costs $30-50 in fees and takes 3-5 days. With stablecoins, it costs under $1 and settles in under a second.

That's not a marginal improvement. That's a 99% cost reduction and 100,000x speed increase.

Americans already have dollars. We take instant domestic transfers for granted. We don't think about cross-border payments because most of us don't send money internationally.

But here's the scale: there's currently $200 billion in stablecoins globally. About $10 trillion in stablecoin transactions happen annually in trading. And about $1 trillion is actually being used by people in emerging markets for payments and savings.

People in countries with unstable currencies desperately want access to dollars. Stablecoins give them that access without needing a US bank account.

This is infrastructure, not speculation. And infrastructure companies in growing markets create massive returns.

The CNBC host asked about risk: "Why take on the potential risk of a company-backed stablecoin when you could just use dollars?"

Here's what most people miss: the risk is actually very low now.

After the GENIUS Act passed (recent US stablecoin regulation), stablecoin issuers are required to back their coins 1:1 with US Treasury bonds or cash. That means holding a stablecoin is basically like holding a money market fund.

Yes, there were issues before regulation. Circle's USDC briefly depegged in 2023 during the SVB bank failure. But those were temporary dislocations, not systematic cracks.

The important context: this is a 10-year-old industry that just got comprehensive regulation. Early instability is normal for new financial infrastructure.

Here's where it gets interesting for investors.

Most stablecoins are built on Ethereum. Every time you send a stablecoin transaction, you're using Ethereum's network—and paying a tiny fee in ETH to process that transaction.

As stablecoin adoption grows, Ethereum usage grows. More transactions mean more network fees. More network value.

That's why over 100 Ethereum Layer 2 networks have launched. They're all competing to process stablecoin transactions at the lowest cost and highest speed.

The infrastructure layer is where the value accrues. Not in the stablecoin itself (which is always worth $1), but in the networks that move those stablecoins.

Stablecoins aren't an investment themselves. They're always worth $1 by design.

But they reveal where massive opportunities exist:

1. Blockchain infrastructure (Ethereum, Layer 2 networks) Stablecoins drive usage. Usage drives value. Companies building the rails for stablecoin transactions are the picks and shovels play.

2. Exchanges and platforms (Coinbase, Kraken) More stablecoin usage means more crypto trading, more on/off ramps, more custody services. Exchanges benefit from every increase in stablecoin volume.

3. Payment companies integrating stablecoins Traditional fintech companies adding stablecoin rails get access to faster, cheaper cross-border payments. That's a competitive advantage.

4. DeFi protocols using stablecoins Decentralized finance platforms built around stablecoins (lending, borrowing, yield) capture billions in transaction volume.

One panelist made a point that resonated: stablecoins give you optionality during volatile markets.

When crypto crashes, you can instantly convert to stablecoins. You're out of volatility but still in the crypto ecosystem. No need to move back to traditional banking.

You're holding "dry powder" on the sidelines, ready to deploy when opportunities appear. That flexibility matters when markets move fast.

Traditional banking doesn't offer that. If you want to sell crypto, wait for USD to settle, then rebuy when prices drop—you're losing days of opportunity. With stablecoins, you move in seconds.

Stablecoins are still early. We're about 10 years into a multi-decade infrastructure shift.

Over the next 5 years, expect:

The companies building this infrastructure today—blockchain networks, exchanges, payment platforms—are positioning for massive growth.

Stablecoins aren't interesting because they're worth $1.

They're interesting because:

This is the Visa/Mastercard moment of the 2020s. Those companies didn't make money from dollars—they made money from moving dollars.

Same logic applies here.