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This summary covers The Economist’s April 25th, 2026 Finance & economics Buttonwood column listed in the contents as Too-stablecoins and published under the subtitle Why the stablecoin market is fizzling.

The article argues that stablecoins have not yet become the financial revolution their boosters promised. They are meant to be the sober part of crypto: digital tokens pegged to the dollar and backed by safe assets such as Treasury bills. That design should, in theory, make them useful for payments, attractive as a store of value in unstable economies and helpful to America by increasing demand for government debt.

Yet the market looks oddly inert. Politicians, crypto firms and some banks have talked as if stablecoins are about to move from crypto plumbing into mainstream finance. Instead, growth has stalled, real-world payment use remains tiny and the main demand still comes from the same speculative crypto ecosystem stablecoins were supposed to transcend.

The Promise That Alarmed Banks

Stablecoins recently received a burst of official encouragement in America. Congress passed the Genius Act, creating a regulatory framework, and senior officials talked up the possibility that the market could grow from roughly \$300bn to several trillion dollars within a few years. Forecasts such as a \$2trn market by 2028 were plausible enough to unsettle banks.

The reason is simple. If stablecoins can offer something like a bank deposit, but with looser rules and yield-like rewards, money could leave ordinary bank accounts. The American Bankers Association warned that a large stablecoin market could drain deposits, raise banks’ funding costs and ultimately make loans more expensive across the economy.

That fear set up a fight over the next phase of legislation. Banks want tighter limits; stablecoin issuers want room to grow. But the article’s central point is that this fight may be shrinking before it is settled. The market that banks feared has stopped looking unstoppable.

Why The Boom Has Paused

After a strong burst of growth, stablecoin assets have barely moved. That is better than bitcoin’s recent fall, but it is not what a fast-adopting payments technology looks like. Big announcements have also produced little concrete evidence of a takeoff. A group of large banks formed to explore stablecoins, but exploration is not deployment. Rumored coins from retailers such as Walmart and Amazon have remained rumors.

One reason is regulation. The Genius Act created some certainty, but it also left important questions unresolved. Meanwhile financial rule-makers are moving stablecoin issuers closer to bank-like obligations. Treating issuers as financial institutions for anti-money-laundering and know-your-customer purposes would impose heavy monitoring and compliance costs. Those requirements may be sensible, but they make launching and operating a coin less attractive.

The deeper problem is demand. Stablecoins are supposed to be useful as payments infrastructure: always-on, borderless and faster than bank rails. Some businesses do use them for payments outside normal banking hours, and some people use them where dollar banking is hard to access. But these cases remain small compared with crypto trading and crypto-related transfers.

Research cited by the article finds that almost half of stablecoins function mainly as trading assets inside crypto markets, while less than 1% of the supply is used for payments. That is a damaging statistic. It suggests stablecoins are less a substitute for bank money than a lubricant for crypto speculation.

The Tokenisation Escape Route

There is still a path to broader relevance. If investors embrace tokenised financial assets, they will need digital cash-like instruments to trade them. Stablecoins could become the settlement layer for a future market in blockchain-based bonds, funds and securities.

But that future remains small. The article notes that tokenised finance is worth only about \$30bn today, which is minor beside conventional markets and even small beside the stablecoin market itself. Until tokenised assets grow into something more substantial, they cannot provide the demand base that stablecoins need.

That leaves stablecoins tied to crypto’s cycle. When appetite for risk fades and crypto prices fall, stablecoins lose momentum too. Their supposed independence from speculative crypto is therefore overstated. They may be less volatile than bitcoin, but their use is still heavily dependent on the health of the broader crypto market.

The Takeaway

Stablecoins remain important, but the article cuts against the idea that they are already remaking finance. Their strongest current use is still inside crypto, not in everyday commerce. Regulation is making issuance more costly, banks’ worst fears look premature and the hoped-for payments revolution has not arrived.

The broader lesson is that a financial technology needs more than a clever structure and political enthusiasm. It needs users with a reason to change behavior. Stablecoins may yet matter if tokenised assets or cross-border payment needs grow fast enough. For now, their stability is literal as well as financial: the market is not collapsing, but it is not surging either.