Stablecoins improve the 'usability of money', Stripe founders John and Patrick Collison say

Stripe, the payments company that reportedly generated $1.4 trillion in total volume in 2024, said stablecoins are one of the most innovative areas of the “internet economy,” in an annual letter published on Thursday. 

This should not come as a surprise, given that Stripe spent $1.1 billion to purchase stablecoin startup Bridge in October. However, considering Stripe processed transactions representing about 1% of total global GDP, it’s worth examining why co-founders Patrick and John Collison see a future in blockchains. 

In their annual letter, the Collison brothers note that stablecoins represent an “improvement” on the “basic useability of money,” much in the same way that banknotes were an advancement from coins and — and perhaps more controversially among The Block readers — fiat currency was an upgrade from the gold standard. 

“Stablecoins have four important properties relative to the status quo,” the Stripe founders write. “They make money movement cheaper, they make money movement faster, they are decentralized and open-access (and thus globally available from day one) and they are programmable.”

In other words, fiat-pegged cryptocurrencies are not only better at the things money is supposed to do but also open up new avenues for using money.

“Improvements to the basic usability of money make economies more prosperous,” the Collison brothers write. 

This hasn’t always been the case. Infamously, Stripe stopped accepting bitcoin payments in 2018 after a few short years due to the limitations of blockchains at the time. After a four-year hiatus, the company enabled payouts in USDC, a step that was expanded two years later when Stripe enabled customers to accept stablecoin payments from Solana, Ethereum and Polygon.

Of course, the move could have been a response to competitors like PayPal and Visa moving to accept payments, but the Collisons argued at the time that crypto had matured with transaction speeds increasing, costs dropping and stablecoins beginning to provide “real utility.” 

“It has taken many years of research and patient systems engineering to make the decentralized technologies competitive with existing financial infrastructure,” they wrote in Thursday’s letter. “The fundamentals for stablecoin adoption have only recently fallen into place.”

Today, they note, stablecoin transaction volumes more than doubled between Q4 2023 and Q4 2024 and there are more than 40 million monthly active wallets. 

“The top stablecoin use cases today involve tangible, real-world activity,” John and Patrick write. “CFOs use stablecoins to manage corporate treasury, immigrants use them for remittance, citizens of countries with unstable currencies use them for dependable savings, and payments teams use them to enable customers from countries with low card penetration.”

In the same way that the Stripe co-founders attribute much of the company’s success to their foresight in investing early in AI solutions, they argue that being a leader in stablecoin services could drive Stripe’s next phase of growth. 

However, as much as stablecoins are a win-win for Stripe and its client base, they also largely benefit the U.S. government, as many stablecoin advocates have argued. Not only are nearly all stablecoins denominated in the U.S. dollar — strengthening the greenback’s economic hegemony — but issuers like Tether and Circle are among the largest buyers of U.S. government debt due to their need for low-risk treasury assets. 

Tether, for instance, has direct and indirect exposure to $113 billion worth of U.S. government debt, as of the end of 2024. If a nation-state, Tether would be the 19th-largest Treasury bill holder, according to data from the Treasury Department. 

“We expect that stablecoins, as an easier-to-use and more accessible version of eurodollars, will bring similar benefits to a much broader group of actors,” the Collisons write. 

That said, the subtitle of the stablecoin section of Stripe’s annual letter drew a comparison between the asset class and “room temperature semi-conductors,” a technical innovation theorized to change the world — but doesn’t exist .