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When stablecoins first came onto the scene in the blockchain industry, they promised global money.
Finally, commerce would be frictionless, and we could use the USD and other currencies on peer-to-peer blockchains with low fees, fast settlement times, and next-to-no friction.
Yet that isn’t what came to pass. Today, while stablecoins are a big deal, the ecosystem is a tangled mess—unscalable blockchains, insecure bridges, and more tokens than anyone can track. Instead of speeding things up, it’s slowing everything down.
Instead of one global currency we can all use, we have a dollar divided across dozens of ledgers: fragmenting liquidity, introducing security vulnerabilities, and reintroducing the very friction stablecoins were meant to eliminate.
The stablecoin explosion: promise turns into pandemonium
Stablecoins were supposed to fix a problem—digital currencies like BTC and Ethereum are inherently volatile due to their fixed supply.
However, what started with BitUSD and Tether has morphed into a chaotic flea market of USDC, USDT, DAI, FDUSD, crvUSD, and dozens of other dollar derivatives. These are spread across Ethereum, Solana, Tron, Base, Binance Chain, and dozens of other ledgers.
What started as a quest to create one unified, global, stable form of money has turned into monetary balkanization. Which makes you wonder—why not just use the USD instead?
The problems with the stablecoin ecosystem in 2025
The biggest problem with stablecoins being spread across so many different ledgers is liquidity fragmentation. Each blockchain has its own pools, markets, and arbitrage quirks. This increases fees, limits the potential of DeFi, and destroys the seamless experience digital cash should offer.
Since these blockchains are inherently limited in transaction processing capacity, the different stablecoins must cross bridges and roll up to layer two solutions. A quick look at the Ronin bridge hack and others like it will show why these security black holes are a bad idea.
The next problem is that many chains and coins have led to regulatory chaos. What’s legal and clear in one jurisdiction may not be in another, and while some stablecoins like USDC are fully audited and backed, some refuse to prove it. Yet others, like DAI and crvUSD, are algorithmic. After the chaos unleashed by Do Kwon’s UST in 2021, the recently passed GENIUS Act in the USA has banned them while they remain legal elsewhere.
All of these, the regulatory uncertainty, the bridges and rollups, and the fragmentation caused by ever-increasing options across dozens of chains, lead to a subpar user experience. Imagine how much simpler it could be to have half a dozen interoperable stablecoins operating on a single scalable ledger.
“Imagine every WhatsApp message had to be wrapped, bridged, or translated before delivery. That’s stablecoins today.” – Gavin Lucas, CoinGeek.com
Interoperability across ledgers is a myth
Regarding the ever-vague term Web3, the go-to answer for how it will work is “interoperability.” Industry bigwigs tout Chainlink, bridges, and shared APIs as the solutions to the problems that multiple ledgers have introduced.
However, interoperability isn’t the same as unity. Just as the internet needed TCP/IP, global money needs a shared protocol. Compatible interfaces won’t do when a single unified ledger is an option.
The entire patchwork quilt of solutions dreamed up by industry leaders is nothing more than kicking the can down the road. Just as the competing networks that made up the early internet folded as TCP/IP ate the world, so too will most blockchains and the tokens that live on them.
Make no mistake: this fragmentation isn’t some hypothetical problem that only concerns blockchain purists—it has real-world consequences. It slows down DeFi, causes transactions to fail, makes institutions skeptical of the technology, and causes users to shrug and wonder what all the hype was about.
What it could and should look like
Those of us who call for unity aren’t talking about having a single stablecoin issuer—we’re talking about all of them operating on a unified scalable ledger. There’s plenty of room for competition, and the market can decide which issuers they trust and want to use.
However, there’s no need for dozens of ledgers or any of the bridges between them. The original Bitcoin protocol, now known as BSV, is capable of one million transactions per second with fees of $0.0001 per transaction. With token protocols like 1Sat Ordinals and STAS, it’s possible to issue stablecoins directly on a legally compliant, scalable blockchain.
Imagine if all the value and liquidity on all the different blockchains merged onto one—we’d have super liquidity pools, seamless token swaps, DeFi dominance, and stablecoins we could use in every type of application, from games to cybersecurity tools to Web3 apps.
There’s no future for stablecoins without scalable infrastructure. Eventually, everything will have to move onto one chain, and there’s currently only one capable of delivering the scalability required to make it work.
Rebuilding the tower
The dream of global electronic cash is still alive, but not if we keep building silos.
While this author questions whether on-chain fiat is an innovation, he accepts that it’s a necessary bridge between inflatable fiat and hard money like Bitcoin. Like it or not, most users don’t want to use currencies that change value in real-time, so stablecoins will be a necessary stepping stone if mass adoption is to occur.
What we need now is a shared language on a single base-layer—a tower built on a foundation that can scale. Until then, stablecoins will remain a fragmented illusion, and the path to adoption will remain slower than it should be.
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