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A16z Calls “Stablecoin” a Remnant Term from the Volatile Crypto Asset Past

Andreessen Horowitz's crypto division states that the term “stablecoin” is now a relic from the early, turbulent days of the crypto industry. The firm believes this label will gradually be abandoned as digital dollars gain acceptance in mainstream finance.

The firm explains that stability is no longer the main characteristic of this category. Its technology has evolved beyond its original name. Now, stablecoins are at the center of the global payment system.

Stability Is Fundamental, Not the Main Value

In a post published this week, a16z compares “stablecoin” to “horsepower.” Initially, the word was useful for explaining a new technology with familiar terminology, but it eventually became outdated and just stuck around.

The initial problem was very simple. The wild volatility of crypto assets previously made this technology unusable for saving, borrowing, or everyday payments. Stability has solved that problem. Now, stability is a prerequisite, not its main product.

Currently, stablecoins transfer value across countries for transaction settlement within seconds, integrated into consumer applications, and run on programmable infrastructure. In recent months, monthly transfer volumes have surpassed major US payment networks.

The supply of stablecoins has exceeded US$300 billion. Companies now see dollar-pegged tokens as a payment method, not just a tool for crypto trading.

“Stability is now a basic requirement. It’s a necessity, not its core,” reads a quote in the post.

What Replaces “Stablecoin”

a16z predicts this category will naturally change its name over time. The firm highlights terms like “digital dollar,” “digital euro,” and “on-chain assets” as alternatives.

Each of these terms, they say, more accurately describes how users will utilize these assets.

A bigger change, they continue, is that money now behaves like software, capable of being programmed and directly integrated into consumer applications.

This statement comes as the stablecoin sector hits new records. Companies like Fireblocks, Circle, and Western Union are already building infrastructure around this asset class.

a16z states that the name may not be as important as what comes after. Whether “digital dollar” becomes the replacement or stablecoins simply fade into traditional finance, the firm ultimately predicts users will continue transacting.