CNBC Television
Rising demand for stablecoins highlights speed, security and market flexibility
11/5/2025, 12:20:12 PM
Economic Summary
- Stablecoins differ from a U.S. digital dollar mainly by payment rails: blockchain rails enable near-instant, very low-cost cross-border transfers versus traditional banking rails, implying major efficiency gains for remittances and business payments.
- Speakers argue most commercial stablecoins are backed by short-term Treasuries or equivalent, making them operationally similar to money-market funds; with regulatory frameworks (referred to as the Genius Act) this backing aims to reduce risk, though it doesn't equal government-backed currency.
- Adoption is concentrated in emerging markets where users lack access to stable currencies; stablecoins function as working capital and dollar access, supporting broader economic activity and remittance flows.
- Ethereum (ETH) acts as the primary platform for many stablecoins; increasing stablecoin transactions drive ETH usage and Layer‑2 network growth, supporting use cases like payroll and tokenized real-world assets.
Bullish
- Blockchain rails cut cross-border settlement time from days to under a second.
- Transaction costs for cross-border payments can fall from tens of dollars to cents.
- Stablecoins give emerging-market users access to dollars and act as working capital.
- Ethereum (ETH) benefits from increased transaction activity and Layer‑2 growth.
- Stablecoins provide liquidity optionality and a crypto safe-harbor during market stress.
Bearish
- Stablecoins have experienced depegs (e.g., UST) showing collateral and liquidity risks.
- Counterparty or operational failures (e.g., Circle's brief DPEG tied to SVB) create trust issues.
- Companies-backed stablecoins can't match full faith and credit of a government-backed digital dollar.
- Regulatory uncertainty and user discomfort may slow on‑ramps and adoption in the U.S.
Bullish tickers
ETHCIRCLEUST
Bearish tickers
USTCIRCLESVB
ETH
Bullish
More stablecoin transactions and Layer‑2 adoption increase demand for ETH as the network currency and transaction gas token.
Bearish
Growth could be limited by competing chains, congestion, or regulatory constraints on crypto infrastructure.
UST
Bullish
Speakers view the UST depeg as a temporary dislocation that can correct with returning liquidity and maturation of the market.
Bearish
UST suffered a notable DPEG, demonstrating vulnerability to liquidity shocks and algorithmic/design failures.
CIRCLE
Bullish
Circle-backed stablecoins are described as being backed by Treasuries and operating like low-risk money-market equivalents.
Bearish
Circle experienced a brief DPEG tied to the SVB failure, highlighting counterparty and operational exposure.
SVB
Bullish
N/A
Bearish
The failure of SVB contributed to temporary stablecoin liquidity stress and demonstrated banking counterparties can introduce systemic risk.
People mentioned
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