The Silent Threat to The Biggest Tokenization Success

When people ask me what the single most successful use case for tokenization is, my answer is always the same—and it’s stunningly simple: stablecoins or privately issued tokenized cash.

Here’s why:

• $200B market cap (+1,000,000% in just a decade)
• $10T+ annual transaction volume (beating Visa, Mastercard, and PayPal combined)
• 25M monthly users (imagine when this hits 250M or 1B!)
• 99.99% reduction in fees and processing time compared to traditional cross-border bank wires

Stablecoin is the front-end for digital assets adoption that has the most reach, impact and utilities out of all digital assets. 

However there is a massive hidden problem with this success story that no one likes to talk about - fragmentation. Stablecoins are fragmented across three critical areas:

1. Risk management & disclosure requirements
2. Regulatory & compliance requirements
3. Jurisdictional product availability

Think about it this way: when you spend, send, or invest $1 from a JPMorgan or Citigroup account, it doesn’t matter to the market—it’s just $1.

But with stablecoins, branding matters. The $1 stablecoin you hold could be rock-solid or completely worthless based solely on who issued it.

This means:

• Average consumers need to become bank credit analysts, evaluating the complex balance sheets of stablecoin issuers to ensure their $1 won’t vanish.
• Large institutions remain hesitant to embrace stablecoins due to these risks.

Why does this matter? Stablecoins are at the tipping point; it is at hundreds-of-billions market size with mostly crypto-native users but scaling to a hundreds-of-trillions asset class with billions of mainstream users and big institutions requires more robust product design. But without addressing fragmentation, that leap won’t happen.

In this Weekly Research issue, we will dive into various components of the problem (or opportunity depending if you have an enterprising mind) and explore what a solution would look like.

Let’s dive in

Stablecoin Market Fragmentation

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