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A16z Calls “Stablecoin” a Remnant Term from the Volatile Crypto Asset Era
Andreessen Horowitz's crypto division states that the term “stablecoin” is now a relic from the early days of the tumultuous crypto industry. The firm believes this label will gradually be abandoned as digital dollars begin to be accepted in the mainstream financial sector.
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 Initially, the term was useful for explaining a new technology with familiar terminology, but it eventually became outdated and just stuck around.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 issue. Now, stability is a prerequisite, not its main product.
Stablecoins now move value across borders for transaction settlement within seconds, integrated into consumer applications, and run on programmable infrastructure. In recent months, monthly transfer volumes have surpassed the major payment networks in the United States.
The supply of stablecoins has exceeded US$300 billion. Companies now consider dollar-pegged tokens as a payment method, not just a tool for crypto asset 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 that 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.
The bigger change, they continue, is that money now behaves like software, can be programmed, and integrated directly into consumer applications.
This statement comes as the stablecoin sector reaches new records. Companies like Fireblocks, Circle, and Western Union are already building infrastructure around this asset class.
a16z suggests that the name may not be as important as what comes next. Whether “digital dollar” will replace it or stablecoins simply fade into the traditional financial world, the firm ultimately predicts that users will continue transacting.