Stablecoins: A New Form of Currency?

Stablecoins are a fast, secure way to exchange value on blockchain networks, especially when buying and selling cryptocurrencies like Bitcoin. Unlike traditional payment systems, which can take days to complete, Stablecoin transactions settle almost instantly at any time of day.

While most people don't yet use stablecoins to pay for everyday goods and services, the technology is growing quickly. The Swift global banking network is moving to blockchain, enabling banks to settle payments using stablecoins. Many digital platforms now offer tools for businesses to create and manage their own stablecoins, and several large U.S. banks are exploring the possibility of issuing this form of currency, potentially  in cooperation with other banks. ^₍₁₎ 

Unlike U.S. dollars, whose value is set by the government, stablecoins are backed by real assets, mainly cash and U.S. Treasury securities. These reserves can be quickly converted to dollars for any customer who wants to cash out. 

Regulation inside the U.S.  

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) was signed into law in July 2025. It gives banking regulators, including the Federal Reserve, oversight of Stablecoin issuers. Under the law, issuers must hold one dollar in reserve for every stablecoin in circulation. Accepted reserve assets include cash, bank deposits, short-term Treasury securities, and central bank deposits. ⁽¹⁾ 

Outside the U.S. 

In the U.S., faster domestic payment systems with lower fees, like FedNow, may reduce the appeal of Stablecoins. However, Stablecoins have a key advantage: They work anywhere in the world, including places where U.S. dollars are hard to obtain. The Federal Reserve notes that over 80% of stablecoin transactions happen outside the U.S., and that the biggest opportunity lies in meeting global demand for dollar-based assets in regions with limited access. ⁽¹⁾ 

How Teradata can help 

The GENIUS Act is likely to speed up stablecoin adoption in international trade and draw traditional banks further into blockchain-based transactions.

As stablecoins become more widely used, they will create new data management challenges — both in processing transactions and in managing the assets held as collateral. Teradata's expertise in modeling complex financial relationships across multiple currencies can be extended to support stablecoin use cases. 

_{(1) Matthew Wells, "Stablecoins and Financial Stability", Federal Reserve Bank of Richmond Econ Focus, December 2025.}