Why is it said that stablecoins have completely transformed the cryptocurrency industry?

Article: Blockchain Knights

The market capitalization of stablecoins has already exceeded $310 billion; they are no longer just a medium of exchange in the crypto world, but have become a force in global payments that can’t be ignored.

The previously passed “GENIUS Act” took a crucial step forward: on the one hand, it shaped compliant stablecoins into regulated payment instruments; on the other hand, it clearly prohibits issuers from paying interest or yield solely because users hold stablecoins or use them.

This ban changed the path of value flows. Reserve income earned by issuers by investing in highly liquid assets such as short-term government bonds and bank deposits cannot be directly returned to holders, and must inevitably be redistributed across each link in the payment chain.

As a result, the focus shifted from the issuer–user relationship (the clear legal dispute) to intermediaries such as exchanges, wallets, custodians, payment networks, and banks.

They can come up with a variety of flexible alternatives around stablecoin balances—such as rewards, fee waivers, settlement discounts, or product access—to indirectly benefit users.

The cooperation between Circle and Coinbase is a typical example. After fees are deducted, the reserve income of USDC is allocated according to wallet holdings and platform contributions, and Coinbase earns substantial stablecoin revenue from it.

This is the core change brought by the regulatory framework. GENIUS restricts direct interest payments, but it may not necessarily block third-party channels.

Banks worry that if exchanges or related platforms continue to provide returns under the name of loyalty rewards, it will create loopholes to evade regulation, further intensifying deposit outflows from the banking system.

Meanwhile, the crypto industry argues that such rewards are normal commercial competition, not regulatory arbitrage.

If advanced reward models are restricted, banks will have more confidence in confining the economic activities of digital dollars within their own balance sheets.

ARK Invest founder Cathy Wood has recently admitted that stablecoins have already fulfilled the role she once expected Bitcoin to play in the payments space.

The data says a lot. In global retail crypto activity, stablecoins have already taken a dominant position. In capital-restricted markets such as Venezuela and Brazil, the USDT pegged to the dollar accounts for 60–70%, or even over 90%, of crypto trading volume, while Bitcoin’s share is only in the single digits.

Stablecoins have become a real, practical payments channel, while Bitcoin has quietly completed its refocusing—evolving toward a direction of scarce assets, institutional reserves, and value storage.

At present, stablecoins are taking on the practical function of a medium of exchange. This allows Bitcoin to avoid simultaneously carrying multiple missions such as payments, storing value, and anti-inflation, and instead more purely strengthen its value narrative by focusing on institutional allocation and long-term holding.

It can be expected that in the future digital dollar economy, how much value directly reaches users—and how much is left to accumulate in intermediary layers—will depend on legislators’ tolerance for indirect returns, which is the end result of the GENIUS Act.

If platform reward channels remain open, giants that control users and distribution channels will have the advantage; if restrictions tighten, the appeal of banks and tokenized deposit products will rise accordingly.

And regardless of which side the balance tilts toward, the stablecoin payment mission and the profit-redistribution mechanism behind it have already rewritten the underlying logic of the crypto market.