The debate over the future of currency in the digital age continues to intensify, and a new voice is suggesting that Bitcoin may not be the answer many initially hoped for. Lee Hardman, a currency analyst at MUFG Bank – one of Japan’s financial powerhouses – is asserting that stablecoins are better equipped to function as a practical form of money than the notoriously volatile Bitcoin.
Hardman’s analysis, reported by The Crypto Basic and echoed in other financial news outlets, centers on the inherent stability offered by stablecoins. Unlike Bitcoin, which has experienced dramatic price swings, stablecoins are designed to maintain a consistent value, typically pegged 1:1 to established currencies like the U.S. Dollar, the euro, or even commodities like gold. This stability, Hardman argues, is crucial for a currency to effectively serve its core functions.
“Stablecoins, which serve as digital cash, have recently been attracting attention,” Hardman explained in a recent report. He further elaborated that these digital assets “better meet the requirements for currency in that they provide price stability and fast, low-cost payment services.” This isn’t merely theoretical; the data supports his claim. Approximately 80% of all trades on centralized cryptocurrency exchanges are currently executed using stablecoins, demonstrating their central role in crypto market liquidity.
The dominance of stablecoins like Tether’s USDT and Circle’s USDC isn’t accidental. They were specifically engineered to avoid the price volatility that limits Bitcoin’s usability for everyday transactions. Imagine trying to buy a cup of coffee with a currency that could lose 10% of its value in a matter of hours – the risk is simply too high for widespread adoption. Stablecoins, by contrast, offer a more predictable and reliable medium of exchange.
This isn’t to say Bitcoin is without merit. It continues to be viewed by many as a store of value, a digital equivalent of gold. However, its volatility makes it a less practical option for routine purchases or as a reliable means of payment. The distinction is becoming increasingly clear to financial institutions, with payment processors beginning to adopt stablecoin networks for cross-border settlements.
The growing acceptance of stablecoins is further evidenced by the significant increase in their market capitalization, which currently exceeds $310 billion, with nearly 99% tied to U.S. Dollar-backed digital tokens. This surge in value reflects a growing demand for a stable and efficient digital currency.
The trend extends beyond simply usage within the crypto ecosystem. Major banks are now actively exploring the issuance of their own stablecoins, pegged to the currencies of the G7 nations. A consortium of ten major banks – including Bank of America, Deutsche Bank, Goldman Sachs, and UBS – announced in October 2025 their joint exploration of creating blockchain-based assets pegged to these currencies. This initiative, while still in its early stages, signals a growing recognition within traditional finance of the potential benefits of stablecoins.
The interest in stablecoins is being fueled by a combination of factors, including soaring cryptocurrency prices and a renewed focus on the potential of blockchain technology. As regulators and financial authorities grapple with the implications of digital assets, the need for a stable and compliant digital currency is becoming increasingly apparent.
The Bank for International Settlements (BIS) has also taken note, reporting in 2024 that stablecoin transaction volumes exceeded $7 trillion annually – a figure significantly higher than Bitcoin’s daily transaction volume for payment purposes. This data underscores the growing real-world utility of stablecoins, particularly in emerging markets like Nigeria and Brazil, where they are increasingly used for remittances.
Hardman’s assessment isn’t a condemnation of Bitcoin, but rather a pragmatic evaluation of which digital asset is currently better suited to fulfill the fundamental roles of money: a store of value, a medium of exchange, and a unit of account. While Bitcoin may continue to evolve and potentially address some of its volatility issues, stablecoins, with their inherent price stability and efficiency, appear to be leading the charge in bringing digital currency to the mainstream.
The exploration by major banks into issuing G7-pegged stablecoins further solidifies this shift. It suggests a future where traditional finance and the digital asset world converge, offering consumers and businesses a wider range of payment options and potentially reshaping the global financial landscape. The question now isn’t whether digital currencies will play a role in the future, but rather which form they will take – and, according to analysts like Lee Hardman, stablecoins are currently positioned to take the lead.
