When Reeve Collins and his then-partners launched Tether in 2014, nobody really knew what a stablecoin was.
Fast-forward 12 years and the stablecoin market is now worth more than US$300 billion. What’s more, Tether’s stablecoin – USDT – dominates, with estimates giving it almost 60% of all stablecoins in circulation.
A stablecoin is a digital token designed to match the value of fiat currencies, such as the US dollar.
Stablecoins took off because they give people and companies outside the US access to US dollars. They also allow for rapid, 24/7 financial transfers that can be completed faster and at a lower cost than via traditional finance institutions.
“If you look at how you move money and how the world transacts today, it’s somewhat antiquated. It’s slow and expensive in a lot of cases,” said Collins, who left Tether in 2015. “So the world’s entire financial plumbing needs to be upgraded, and that’s what the blockchain represents. Stablecoins are the bridge to that technology.”
But like any innovation, stablecoins don’t just bring improvements – they also bring competition. “If the traditional financial players don’t lean in and upgrade their infrastructure, they will be left behind,” said Collins.
“There will be bespoke businesses that were organically grown from the blockchain and don’t have the history that the traditional businesses do. They’ll be first movers. They’ll be much nimbler because they weren’t subject to the amount of regulations the rest were, and they’ll be able to offer much more innovative products.”
TradFi fights back
But the large names in traditional finance, known as TradFi, have started to fight back.
“We are seeing the big institutional names come in,” said Collins. “BlackRock is definitely leaning into digital assets. Franklin Templeton, with US$1.7 trillion under management, has been leaning in as well.
“Because what do they have that the new startups don’t? They have distribution, they have customers, they have trillions of dollars. So, they’d love to upgrade their infrastructure.”
The key was regulation. In 2025, the US passed the GENIUS Act, which created regulatory certainty by ensuring that US-based stablecoin issuers are regulated and hold sufficient reserves.
“Now that the US has passed crypto regulation, traditional players can actually explore it, whereas before they couldn’t because they would get in severe trouble,” said Collins.
Regulation is also key for ensuring Cayman’s international financial centre can thrive in the stablecoin era. In recent years, Cayman has consistently amended the Virtual Asset (Service Providers) Act, which was first passed in 2020, to create regulatory certainty for the fast-changing digital asset sector. In 2026, it also made amendments to the Mutual Funds Act and Private Funds Act to clarify tokenised fund regulations.
“Your regulatory structure for foundations is great,” said Collins. “I would not copy what the US does, but I would enable those issuers from the US to more easily potentially hold their assets in the Cayman Islands.”
Smaller jurisdictions are “more flexible”, he said, and that gives them an advantage when it comes to innovative financial technology.
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