Introduction: The Changing Face of Money

Economic turbulence and rapid technological change have converged to reshape our understanding of what constitutes money. As digitisation permeates every aspect of modern life, the very nature of currency is evolving beyond physical notes and coins. “As every aspect of our lives has been transformed by digitisation, the changing nature of money and currencies should come as no surprise”1. Stablecoins cryptocurrencies pegged to fiat currencies and built on blockchain have emerged as a new form of digital money promising faster, cheaper transactions. Yet their rapid rise brings profound questions around privacy, surveillance and financial control. This article examines both sides of the stablecoin story, helping Australian consumers navigate opportunities and risks in an increasingly digital payments landscape.

1. Promise of Stablecoins: Speed, Cost and Accessibility

Stablecoins offer near-instant settlement and often lower transaction costs compared with traditional rails, particularly in cross-border and underbanked contexts. “Stablecoins can strengthen remittance and payroll systems for global businesses…improve the experience for participants by reducing settlement times and costs”2.

Circle’s USDC exemplifies these benefits: transactions settle almost instantly on-chain, with fees often a fraction of bank wire costs3. In remittances from Australia to the Pacific Islands, for instance stablecoins could cut intermediaries and foreign-exchange margins.

Moreover, stablecoins serve as a store of value in volatile currencies. As one Australian analysis notes, AUD-pegged tokens offer protection against inflationary pressures in emerging markets: “AUD stablecoins matter as a hedge against inflationary pressures, preserving purchasing power where local currencies fall short”4.

With more than two billion dollars paid annually in card fees domestically, Australians stand to benefit from reduced costs1. For freelancers, small exporters and families supporting loved ones overseas, stablecoins present a compelling alternative.

2. Peril of Surveillance and Control

Yet the architecture that gives stablecoins transparency also raises critical privacy concerns. Blockchain’s public ledger can expose transaction histories in granular detail. Policy proposals in the United States have ignited debate over mandatory data collection. As the Cato Institute warns, “Stablecoin legislation must ensure financial privacy, or risk a surveillance infrastructure rivalled only by centralised digital currencies”5.

Similarly, concerns have been raised that U.S. regulatory drafts would require transaction reporting far beyond existing banking requirements: “Concerns raised over privacy in U.S. stablecoin legislation highlight the risk of blanket data collection on consumer behaviour”6.

These issues echo debates over central bank digital currencies (CBDCs). Unlike private stablecoins, CBDCs give central banks ultimate control: “Bitcoin vs. CBDCs: The difference is control CBDCs enable government oversight over every transaction, while private cryptos preserve more user autonomy”7.

Australia’s digital identity proposals, aiming to link digital wallets with verified identity systems, further blur lines between convenience and surveillance. Citizens must weigh faster payments against potential loss of transactional privacy.

3. Incumbent Competition and Regulatory Dynamics

Stablecoins have been hyped as disruptors to Visa and Mastercard networks. However, the established card rails benefit from decades of investment, scale and regulatory integration. Magellan’s analysis cautions: “Much of the excitement around stablecoin being the next big disruptor in consumer payments is misplaced…they lack the seamless, secure global network and consumer protections of V/MA”1.

Visa processes roughly 65,000 transactions per second across 200+ countries with built-in fraud protections and chargeback rights features that stablecoins cannot yet rival1. Regulators in Australia and the EU have acted to cap interchange fees, preserving consumer outcomes while ensuring network viability1.

Government policy will shape stablecoin trajectories. Australia’s Treasury is modernising payment regulation to include licensing frameworks for digital payments providers, including stablecoin issuers8. The Reserve Bank’s 2022 Bulletin called for clear guidelines on reserve backing, operational resilience and AML/KYC compliance9. These guardrails aim to balance innovation with financial system stability and consumer protection.

4. Financial-Infrastructure Resilience and Innovation

Traditional networks’ resilience stems from their net- work effects each additional user increases value for all participants. Stablecoins must replicate these features to compete meaningfully. Collateral requirements, reserve audits and governance frameworks underpin trust in fiat-backed tokens. As Magellan notes, the Genius Act’s AML/KYC mandates are a “step in the right direction for stablecoins to be considered as an ‘alternative payment’ mechanism”1.

Collaboration between fintechs, stablecoin issuers and incumbents offers a path to incremental innovation. For instance, Taurus’s open-source privacy layer for USDC could allow users to shield transaction details selectively, combining blockchain transparency with enhanced privacy10. Major banks in Australia are exploring partnerships with token issuers to streamline cross-border settlement, drawing on both regulated expertise and blockchain efficiency.

5. Navigating the Trade-Offs: Practical Guidance for Consumers

Australian consumers curious about stablecoins should adopt a cautious, informed approach:

Evaluate Provider Transparency: Choose issuers with regular reserve attestation, clear governance and robust AML/ KYC practices1.

Use Privacy-Enhancing Tools: Opt for wallets or layer-two solutions that support selective disclosure and advanced privacy features10.

Limit Exposure in Day-to-Day Spending: Reserve stablecoins chiefly for cross-border transfers or niche use cases; continue using regulated card and bank networks for every- day purchases to retain consumer protections.

Stay Informed on Regulation: Monitor developments from the RBA and Treasury regarding licensing, consumer protections and interchange-fee reforms89.

Ultimately, trust in money has long hinged on both convenience and confidence. As stablecoins reshape the payments landscape, consumers must weigh the promise of speed and cost savings against the potential perils of surveillance and system fragility.

Conclusion

Stablecoins represent a profound shift in how value can be stored and moved offering speed, cost efficiencies and inclusion for underserved markets. Yet their public-ledger design and evolving regulatory frameworks give rise to serious concerns around privacy and control. In an unstable world, Australians should remain vigilant: embrace the innovative potential of stablecoins for specific use cases, but guard against unwitting surrender of financial privacy. As digital and regulated payments converge, the future of money may well be stable yet the liberty it affords will depend on the trade-offs each consumer is willing to accept.

References

1. Magellan Asset Management (2025, August 6). Will Stablecoins Change the Way We Pay for Things? Firstlinks.
2. Bitpace (2025, April). How Stablecoins Can Strengthen Remittance and Payroll Systems for Global Businesses.
3. Circle USDC (2025, January). Stablecoin Use Cases: Payments, DeFi, Treasury & More.
4. CryptoNews Australia (2025, July). Australia’s Crypto Moment: Why AUD Stablecoins Matter.
5. Cato Institute (2025, April). Stablecoin Legislation Must Ensure Financial Privacy.
6. Binance (2025, April 24). Concerns Raised Over Privacy in U.S. Stablecoin Legislation.
7. Proton (2025, March). Bitcoin vs. CBDCs: The Difference Is Control.
8. Australian Payments System Board (2023, June). Payments System Modernisation (Licensing) Consultation Paper. Treasury.
9. Reserve Bank of Australia (2022, December). Stablecoins: Market Developments, Risks and Regulation. RBA Bulletin.
10. Taurus (2025, June 26). Taurus Releases Open Source Privacy Tech for Stablecoins, Starts with Circle’s USDC. CoinDesk.