The overwhelming dominance of USD-backed stablecoins (95%+) isn't just about market maturity. It reveals a global preference for dollars that was previously constrained by physical and regulatory friction. In a digital, open environment, users in emerging markets overwhelmingly choose dollars.
Bridge was founded just before the 2022 crypto crashes. The collapse of the NFT market, their initial focus, forced them to pivot to stablecoin infrastructure, which proved to be a much larger and more durable market, demonstrating how market shocks can be clarifying.
When a large company acquires a startup, the natural tendency is to impose its standardized processes. Successful integration requires a balance: knowing which systems to standardize for leverage while allowing the acquired team to maintain its freewheeling, startup-style execution.
Blockchains have evolved like computer architecture. Bitcoin was a single-purpose, incentivized P2P network. Ethereum introduced programmability, akin to the shift to general-purpose computers (von Neumann architecture). The current era of L2s focuses on scalability and specialization.
The proliferation of local crypto exchanges in emerging markets has created robust, stablecoin-dominated trading environments. These function as highly efficient, alternative foreign exchange markets, enabling faster and cheaper cross-border value transfer than traditional rails.
Stablecoins will likely enter the US market not through domestic retail payments, but via international network effects, similar to WhatsApp. Initial US users will be those interacting with the global economy, and adoption will spread inward as these cross-border connections become more common.
Crypto's intense tribalism is fueled by direct financial investment, which makes competition feel zero-sum. This is compounded by a "leper colony" mentality born from years of mainstream rejection, which created strong in-group bonds and a shared sense of struggle against outsiders.
The primary strategic reason for a large platform to issue its own stablecoin isn't just yield, but control. Relying on an external stablecoin creates platform dependency, making the business vulnerable to changes in fees or strategy, much like Zynga's reliance on the Facebook platform.
By embedding stablecoin wallets, companies can move beyond simple payouts. They can maintain an ongoing financial relationship, offering services like savings or credit directly to their user base (e.g., drivers, creators). This effectively allows any platform to build its own neobanking arm.
Tether, described as a "0/100 hedge fund," is unlikely to start paying yield to users. Its entrenched network effects in the crypto trading ecosystem—its original and still dominant use case—are so strong that it doesn't need to compete on yield to maintain its market position.
Unlike traditional fiat FX where larger volumes get better pricing, crypto FX markets currently have the opposite dynamic. Spreads widen with size, making stablecoin-based FX hyper-efficient for smaller, startup-scale transactions but more expensive for massive institutional transfers.
Before stablecoins, launching financial services in N countries required N² unique integrations. Now, companies can build on a single dollar-stablecoin standard and instantly operate globally. Adding other local stablecoins becomes a simple N-style addition, radically simplifying global expansion.
Stripe's acquisitions of Bridge and Privy follow the Google playbook (e.g., YouTube, Android) rather than the Oracle model. The goal is not to absorb a mature product but to acquire a high-potential team and technology to build a new, strategic business pillar from an early stage.