Stablecoins Have Outpaced CBDCs Worldwide

In a bold statement that is sparking global discussion, Changpeng “CZ” Zhao, the former CEO of Binance, declared that stablecoins have already outperformed Central Bank Digital Currencies (CBDCs) in both adoption and real-world utility. Speaking at the WebX Conference in Tokyo on August 25, Zhao described CBDCs as “outdated” in the face of the rapid rise of stablecoins.

His comments arrive at a time when many countries are reconsidering their strategies for digital money. While CBDCs were once seen as the inevitable next step in financial innovation, more than 10 nations have either paused or abandoned CBDC projects entirely, citing low demand, high costs, and inefficiencies. Meanwhile, the stablecoin market continues to grow exponentially, fueled by private-sector innovation and government acknowledgment of their role in the financial system. This shift is now raising questions across global financial sectors: Are CBDCs becoming irrelevant before they even launch?

The Rise of Stablecoins

Stablecoins, which are digital tokens pegged to traditional assets like the U.S. dollar or the euro, have grown into a multi-billion-dollar market. Currently, the sector is valued at around $260 billion, but major financial institutions such as Standard Chartered predict the industry could surge to $2 trillion in the coming years. Unlike CBDCs, which are centralized and entirely controlled by governments, stablecoins are often backed by real collateral and supported by the private sector. This allows them to be more agile, accessible, and innovative than their government-backed counterparts. Zhao highlighted this difference during his keynote address, saying: “Central Bank Digital Currencies are already outdated. Stablecoins, on the other hand, are gaining attention.” This bold statement reflects a larger trend among governments and financial regulators who are increasingly open to recognizing the value of stablecoins rather than resisting them.

Why Stablecoins Are Winning Over CBDCs

During his speech, Zhao outlined several reasons why stablecoins are proving more effective than CBDCs.

1. Real Collateral Support – Stablecoins like USDT and USDC are backed by tangible reserves, such as U.S. Treasury bills, which give them legitimacy and investor confidence.
2. Private Sector Innovation – Stablecoins evolve quickly due to competition between companies, unlike CBDCs, which often move at the slower pace of government bureaucracy.
3. Global Adoption – Many countries and businesses already use stablecoins in cross-border payments, decentralized finance (DeFi), and remittances. CBDCs, by comparison, remain largely in pilot phases.
4. Flexibility and Demand – The demand for stablecoins continues to rise, while most CBDCs face weak retail interest.

He further emphasized that even nations once hostile to digital currencies are softening their stance. China, for instance, despite its strict ban on cryptocurrency trading and mining since 2021, is reportedly exploring a yuan-backed stablecoin to compete against the dominance of dollar-backed tokens.

CBDCs Struggling to Find Relevance

CBDCs were once seen as the future of money. Projects began as early as 2013, with nations like Sweden, Denmark, and Singapore running pilots throughout the 2010s. However, most of these initiatives either stalled or faded as stablecoins surged ahead. Countries that still hold onto their CBDC ambitions face mounting challenges:

• Low Demand: Retail users have shown little interest in CBDCs compared to the convenience of stablecoins and digital payment apps.
• High Costs: Developing, testing, and securing a CBDC infrastructure is costly, with questionable returns.
• Trust Issues: Many citizens fear CBDCs could lead to excessive government surveillance of personal financial activity.

Zhao reminded the audience that only a handful of CBDCs have made it into public circulation, including:

• The Bahamas’ Sand Dollar
• Nigeria’s eNaira
• Ghana’s e-Cedi

Even then, adoption rates remain modest at best.

The Future of the Digital Euro and Beyond

Despite widespread challenges, some central banks remain committed to their digital currency ambitions. Christine Lagarde, President of the European Central Bank (ECB), recently confirmed that the digital euro could be launched by October 2025. The ECB argues that a digital euro would enhance financial sovereignty and provide Europeans with a secure, government-backed alternative to private-sector stablecoins. However, critics say the launch may already be too late, as stablecoins have firmly entrenched themselves in global finance. The Bank of England is also reconsidering its plans for a digital pound, weighing whether the investment is worthwhile given the rapid advancement of other payment technologies such as tokenized deposits.

Countries That Have Paused or Abandoned CBDCs

According to reports, at least 10 countries have completely stopped their CBDC projects. These include Japan, Denmark, Finland, Singapore, South Korea, and the United States, among others. The reasons cited vary, but common themes include:

• Technical challenges in developing scalable digital infrastructure
• High costs with uncertain adoption potential
• Weak retail demand, as consumers prefer existing private solutions

In the U.S., lawmakers recently passed the GENIUS Act, which accelerates the development of stablecoin regulation rather than prioritizing CBDC research. This marks a major policy shift, signaling that the U.S. may be betting more heavily on stablecoins than on a digital dollar.

Global Legal Recognition of Stablecoins

One of the strongest indicators that stablecoins are winning the race is the wave of legislation being introduced worldwide.

• In Hong Kong, the Stablecoin Ordinance lays out clear guidelines for fiat-backed tokens.
• In the United States, the GENIUS Act creates a framework for stablecoin issuers, giving them legal certainty and encouraging innovation.

These moves show that governments are more willing to adapt to the reality of stablecoins rather than trying to reinvent the wheel with CBDCs.

The Broader Implications

The rise of stablecoins over CBDCs is not just a financial story—it is also a geopolitical and policy issue.

• Dollar Dominance: U.S.-backed stablecoins like USDC and USDT are strengthening the role of the dollar in global trade, giving the U.S. an edge in financial influence.
• China’s Pushback: A yuan-backed stablecoin could help China challenge the dollar’s dominance in the digital economy, even as it maintains restrictions on crypto.
• Regulatory Shift: Countries are realizing that it may be easier to regulate private stablecoins than to build costly CBDCs that few people want.

The Inevitable Shift Toward Stablecoins

The message from Changpeng Zhao at the WebX conference could not be clearer: CBDCs are losing the race to stablecoins. While central banks continue to debate, test, and delay their projects, stablecoins have already secured their place in global finance. With legislation emerging to legitimize them further and adoption spreading across both consumers and institutions, stablecoins are becoming the default choice for digital money. CBDCs may still have a future in certain contexts, particularly in strengthening government control over monetary policy. However, the momentum, innovation, and user demand all point to a world where stablecoins dominate digital finance, leaving CBDCs struggling to stay relevant.

Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.