Stablecoins
Diagrams | Matrices | Innovators
When will stablecoins become the dominant method of payment?
Stablecoins are room-temperature superconductors for financial services. Thanks to stablecoins, businesses around the world will benefit from significant speed, coverage, and cost improvements in the coming years. - Patrick Collison
Most stablecoins are pegged to the USD due to its status as a global reserve currency.
Mechanisms
Mechanisms from safest to riskiest?
- Fiat Backed
- Commodity-backed
- Algorithmic
- Synthetic Dollar
Marketplace
Stablecoins are usually minted or burned based on a collateralisation ratio of a basket of assets. These assets determine the trust assumptions of the stablecoin and can range from fiat/assets being held in a tradFi account (USDC, USDT, PAXG) or crypto assets/tokens (DAI, TUSD, FRAX). Stablecoin protocols are able to set a target collateralisation ratio in order to drive capital efficiency.
| Protocol | Mechanism | Website |
|---|---|---|
| Tether | Fiat Backed | tether.to |
| USDC | Fiat Backed | circle.com |
| SKY | Commodity-backed | sky.money |
| FRAX | Algorithmic | frax.finance |
| Radius | Algorithmic | radiustech.xyz |
| Ethena | Synthetic Dollar | ethena.fi |
Platforms and Products
What forces will influence adoption?
| Platform | Notes |
|---|---|
| Stripe | 1 billion purchase |
| Shopify | |
| Visa |
See Payment Rails for more
Engineering
Stable unit of accounting; Borrowed trust from tradFi for fiat-backed stables; Target peg is intuitive due to historical precedent.
Settlement Networks
The stablecoin you hold matters less than where it settles. Settlement speed determines what's possible.
| Network | Finality | Cost per Tx | Batch Capability | Use Case |
|---|---|---|---|---|
| Ethereum | ~12 min | $5-50 | No native batching | High-value, low-frequency |
| Solana | ~400ms | $0.01-0.25 | Transaction batching | Consumer, DeFi |
| Sui | ~390ms | $0.001-0.01 | PTBs (1024 ops/tx) | Agent commerce, DePIN |
For agent commerce: x402 protocol uses stablecoins on high-throughput chains for machine-tempo settlement. When an AI agent transacts, it needs sub-second finality and sub-cent fees — the Three Flows pattern (INTENT → ROUTE → SETTLE) operating at machine speed.
The convergence: Sui's founders built Move at Meta's Diem. Google chose Sui for AP2. Meta sends stablecoin RFPs with Stripe as pilot. The settlement layer for 3 billion users may run on rails the Libra team rebuilt permissionless.
Toolkit
Context
- Agent Commerce — The standards war for agent transactions
- Three Flows — Messages, money, data converge on the same settlement pattern
- Sui — Sub-second coordination layer for machine-tempo settlement
- Payments Industry — $25T B2B cross-border flows meet stablecoin efficiency
- Phygital Beings — The actors who settle: agents, devices, and humans
- Payment Rails — Platform architecture