Forecasting future trends can be a perilous endeavor. In a notable instance from 1899, Charles Duell, who was then the head of the US Patent Office, boldly claimed that “everything that can be invented has already been invented.” History has shown us that this assertion was far from accurate. While I don’t wish to fall into the same trap as Duell, I believe it is reasonable to assert that within a few years, a significant number of Australians will engage with cryptocurrency technology, whether they initially intended to or not.
Recently, a significant development took place in Washington, albeit without much fanfare. The US Senate has approved the Genius Act, a bipartisan legislation that establishes guidelines for dollar-pegged stablecoins. In essence, stablecoins are digital representations of currency that are typically tied to the US dollar on a one-to-one basis and are backed by cash or cash-equivalent assets. They represent just one aspect of the broader cryptocurrency landscape.
To those who may not follow financial trends closely, this might seem rather unexciting. However, for finance enthusiasts, this news is exhilarating. Traditional payment systems can take several days to process transactions, causing delays in merchant payments. In contrast, stablecoins utilize blockchain technology to enable ‘peer-to-peer’ settlements, which reduces the number of intermediaries involved in transactions. This not only lowers transaction costs but also allows for nearly instantaneous settlements.
In practical terms, this means that businesses could potentially bypass traditional payment systems, which often result in substantial fees for both them and their customers. In the United States, various merchant organizations have actively advocated for the Genius Act, with major corporations like Amazon, Expedia, Walmart, Stripe, and Shopify either showing interest in or already investing in this technology.
Unsurprisingly, this development has prompted major banks in the US to reassess their strategies, with some reportedly considering collaborations to launch a collective stablecoin to counter this emerging threat. Meanwhile, Australians have become accustomed to the inefficiencies inherent in our payment systems. Each time a card is swiped, bills are settled, or funds are transferred internationally, numerous intermediaries take a cut of the transaction.
For international transfers, the situation is even more dire, with the average cost of a bank transfer from Australia sitting at 5.48 percent. In some cases, up to a dozen intermediaries may be involved in a single transfer. Even taking into account future compliance costs, the implementation of stablecoin technology would likely reduce these expenses and put money back in the hands of everyday Australians.
However, not everyone views cryptocurrency as a viable solution. The late Charlie Munger, who was a business partner of Warren Buffett, had famously criticized crypto technology as being ‘contrary to the interests of civilization.’ Buffett himself has been less than complimentary. Similarly, Jamie Dimon, the CEO of JP Morgan, labeled bitcoin as ‘a fraud’ back in 2017. Given this history, it is understandable that some banks remain skeptical about the security and regulatory implications of engaging with stablecoins.
Yet, even the most vocal critics appear to be evolving their perspectives. Fast forward to 2025, and it seems that both Jamie Dimon and JP Morgan have transformed into strong supporters and active participants in the realm of stablecoins and the broader cryptocurrency ecosystem. Additionally, Warren Buffett’s Berkshire Hathaway recently reaped a profit of $250 million from its investment in Nubank, a large Brazilian bank that has embraced crypto-friendly practices, while JP Morgan has started allowing its clients to purchase bitcoin. Dimon himself recently encouraged clients to ‘go at it’ when it comes to crypto investments.
In parallel, JP Morgan is testing a deposit token designed for its institutional clients, which is based on cryptocurrency technology. This same technology has the potential to significantly enhance investment efficiency for average investors as well. Currently, when purchasing an advised exchange-traded fund (ETF), investors incur costs from advisers, brokers, exchanges, and market makers—often banks. Each layer of this process adds additional expenses, making it clear that such a system would not be designed today. This is precisely why many American banks are actively developing crypto-related products; no institution wishes to face obsolescence.
On the domestic front, progress is also underway. The Reserve Bank of Australia is expected to release findings soon regarding Project Acacia, a pilot initiative aimed at investigating the role of digital currency in supporting Australia’s wholesale markets. While it may not generate much excitement among everyday Australians, it is crucial for our financial services, which have struggled with productivity for over a decade.
Before long, it seems likely that Australians will find themselves able to pay for their morning coffee using stablecoin technology operating seamlessly in the background. Native cryptocurrency platforms such as Swyftx and others are expected to enhance their offerings with more everyday financial services, thereby providing the competition that many anticipated from neo-banks. Like many technological revolutions before, this transition may happen so gradually that it goes unnoticed until we find ourselves in a more efficient and prosperous financial landscape—one where less of our money is wasted on outdated financial mechanisms.
