The value of the global stablecoin market has currently surpassed several hundred billion dollars.
Attempting to capitalize on this trend, in July 2025, theTrump administration established federal-level rules for US-branded stablecoins through the GENIUS Act. These include requiring issuers of stablecoins to hold fully matched reserves, to strictly separate these reserves from the issuer's own assets, and to ban interest or returns from being paid to holders of stablecoins.
This policy pulls privately issued tokens from historically volatile "wildcat currencies" into a range accepted by mainstream financial systems. It also extends the dollar's dominance into blockchain, as when the world uses dollar-backed stablecoins for transactions, it aids the US Treasury in stabilizing bond sales, reinforcing the liquidity and depth of US capital.
Personal Hedging vs. National Sovereignty
Dollar-backed currencies now make up the vast majority of the stablecoin market and tie heavily into questions about economic sovereignty, with central banks wanting to ensure that private stablecoins do not become unregulated "shadow banks" and that their monetary sovereignty remains intact.
"The rise of stablecoins has elevated global financial competition from technological innovation to strategic 'monetary sovereignty," Shi says.
At an individual level, dollar-pegged stablecoins potentially allow individuals in unstable and inflation-ridden emerging markets like Argentina and Nigeria to participate in global financial flows cost-effectively. Holding such stablecoins is significantly safer than these countries' rapidly devaluing domestic currency.
At a national level, the story is more complicated. A massive "dollarization" of a given country's domestic savings and transactions can blunt a central bank's monetary policy and erode the banking system's deposit base. In an extreme scenario, such stablecoins could become the real digital currency, with domestic currency becoming only a nominal legal tender.
SWIFT's Bottleneck
Stablecoins also challenge the traditional global remittance system anchored by SWIFT, which typically involves sending money through multiple intermediary banks, with each bank conducting separate checks and levying separate service charges. Making a payment can take several days, during which both the remitter and recipient have limited visibility over the transaction.
"The international consensus is that SWIFT is inefficient and costly," Shih noted.
Stablecoin might save businesses that handle large amounts of daily cross-border transactions significant time and fees, saysChiang Ming-hua, a professor of risk management and insurance.
It can do this by completing multi-party transactions directly through blockchain, cutting out intermediary banks and shortening transfer times from days to minutes.
The Risk of Being "Sidelined"
If future global supply chains and cross-border trade shift towards stablecoin due to its stability, some experts think Taiwan will be marginalized if its financial system fails to keep pace.
Should Taiwan recognize stablecoins as part of the global financial infrastructure? Should it proactively design a manageable framework for TWD or foreign currency stablecoins in specific niches? Should it consider ways to ensure a portion of future cross-border settlements and financial data pass through its nodes, rather than rely entirely on offshore pathways?
All these are questions worth asking as Taiwan faces being sidelined amid a new generation of financial infrastructure.
"Taiwan could lose strategic control over core industry data and become marginalized in the next generation of global clearing layers," she cautions.
You've read it. Now let's talk. Follow us on X. Editor: Chase Bodiford
