Stablecoins had their ChatGPT moment in 2025. Payment tokens that were until now used mostly by crypto traders are raring to go mainstream, and not just in the US, where they got regulatory blessing through the Genius Act. Yet just because they’ve pulled ahead, it’s hard to conclude that these 1:1 representation of fiat currencies have won the race. In their quest to come up with the perfect money for the 21st century, market participants will grapple with at least five unanswered questions in 2026.
Are stablecoins the best possible money?
Perhaps not. The person receiving a payment instrument shouldn’t have to worry about what it’s really worth. An influential 2021 paper called it the “No questions asked,” or NQA, property of money. Unless it is counterfeit, fiat currency is NQA. As are insured bank deposits. But even regulated dollar stablecoins won’t be insured, nor will their issuers have access to the Federal Reserve’s emergency lending facility. If a lot of people rush to redeem their tokens, the speed at which issuers can sell assets to meet the selling pressure will decide if the loss of confidence becomes a self-fulfilling prophecy. Since the coins will be backed by short-term, liquid securities, panic could spread to the US Treasury market.
So what can be better?
Fiat currencies and bank deposits are widely trusted. Both can be tokenized and programmed with algorithms. The Trump administration has ruled out the first option: The Fed won’t offer a central bank digital currency. However, China’s e-CNY and Europe’s digital euro — expected by 2029 — will keep the CBDC project alive. Meanwhile, banks are worried that stablecoins will pay interest through the back door. To prevent customers from leaving, they want to give them the option of tokenized deposits. While stablecoins will change hands on public blockchains like Ethereum and Solana, CBDCs and deposit tokens are more likely to exist in closed networks. Banks want this restricted-access system to prevail because it lowers money-laundering risks and tracks close to their world, where one intermediary’s claim on another is settled with central bank reserves.
What will users like more?
There may not be one winner of hearts and minds. The goal of tokenization is to exploit the efficiencies of distributed ledgers. Messaging and settlement will fold into one action, reducing expenses and risk. So-called smart contracts — software embedded in coins — can put conditions around when a payment is triggered and to whom. In cross-border transfers, stablecoins could come up ahead by avoiding costly remittance fees. Dollar coins might help preserve citizens’ purchasing power in high-inflation countries. Where runaway prices are not a problem, CBDCs and deposit tokens could serve the market together. With smart contracts built into CBDCs, a cash subsidy like food stamps won’t require a separate card infrastructure to prevent spending on tobacco or alcohol. China can use e-CNY to spur much-needed consumption.
