Choose Finance That States Cannot Build

Finance is coming onchain. That battle is over. The real battle is what kind of finance we're building. The path we're currently on is exciting. Payments are becoming faster. Fees are becoming lower. And regulatory gaps are being filled. This improves the world. But it misses something bigger. We have the opportunity to build freedom technology. Not just a better version of what we have today, but financial systems that literally cannot exist without Ethereum.

Part of what inspired me to write this was a recent live stream I did with the Trustless Force, an initiative started by Liquity, f(x) Protocol, and Curve to advance decentralized stablecoins. It made me step back and ask a simple question: are we just making dollars easier to move, or are we building something fundamentally different?

There is massive demand for US dollars around the world. Centralized stablecoins like USDC and USDT have allowed people in high inflation countries to access USD and have enabled more efficient dollar transfers globally. That is real progress. But zoom out. If tomorrow the US government launched a well designed CBDC and made it accessible to foreign banks and individuals, it would be a better product than centralized stablecoins. It would have better UX, seamless integration with the banking system, reversible transactions, and deep liquidity from day one. It would even have transactions that are private to everyone except the issuing authority, which would be a massive improvement over today's fully transparent public blockchains. If the product is simply access to US dollars and the ability to send them globally, you do not need a blockchain. Right now, blockchains are mostly filling a regulatory gap, not redefining the system.

We've already seen how fragile that structure can be. In 2023, the collapse and seizure of Silicon Valley Bank and other crypto-serving banks triggered a brief USDC de-peg because a portion of its reserves sat inside the traditional banking system. Nothing catastrophic happened. Deposits were backstopped. USDC re-pegged. But the episode revealed something important, centralized stablecoins inherit not only financial fragility, but political dependency. The government's handling of those bank failures sparked allegations that regulators deliberately targeted crypto-focused banks as part of a broader effort to restrict the industry. Whether or not one agrees with that assessment, the episode showed that political discretion can influence who gets support and who gets shut down. What is permitted today may not be permitted tomorrow. That is not sovereignty. That is integration.

Now contrast that with decentralized stablecoins. Decentralized stablecoins do not depend on a bank's balance sheet. They cannot be blacklisted, frozen, or confiscated. Their rules are enforced by open-source code, not political discretion. Even if the US, the EU, China, and every major nation coordinated to create a global currency, those governments could not create a dollar they do not control. They cannot remove political override. They cannot build immutable monetary logic that lives beyond them. That only exists on Ethereum.

A properly designed decentralized stablecoin does not depend on the survival of a company, a bank, or even its original developers. As long as Ethereum continues to run, the rules continue to run.

When I say finance that cannot exist without Ethereum, this is what I mean.

But this isn't just about freedom for its own sake. If our value proposition is simply that we're faster, cheaper, or less regulated, then we're mostly benefiting from governments being slow. That won't last. As governments learn more about this technology, they will bring parts of it in house. CBDCs will improve. Regulation will catch up. If our advantage is speed, cost, or temporary regulatory gaps, our moat disappears.

Stablecoins are going to be adopted. The real question is whether we, as a community, want to put our foot on the scale and push the direction toward freedom.

Five years ago, we faced this decision before. In 2021, Vitalik wrote about legitimacy. He pointed out something subtle but powerful, the reason DAI gained traction wasn't because it had better liquidity than USDT. It didn't. It wasn't because it had better UX. It didn't. It was because developers chose to integrate it.

The community didn't support decentralized stablecoins purely because they were more efficient. We supported them because they aligned with our values. Because they reduced political override. Because they were credibly neutral. We put our weight behind the option that reflected what we wanted Ethereum to stand for. That was a legitimacy decision.

And we have that same choice again.

The question is not whether stablecoins win. The question is what they stand for when they do.

Because this isn't just about stablecoins. It's about whether Ethereum becomes a more efficient version of the existing system, or something that reshapes it entirely.