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Who would’ve thought, just two or three years ago, that today there would be more than 250 stablecoins globally and over 1 200 tokenised real-world assets? Yet here we are.
And it seems stablecoins are merely the opening act in a much larger transformation of finance.
The early blockchain was like the telegraph to the smartphone – groundbreaking but slow, clunky, limited in capability, and plagued by incompatible standards across networks.
Just as the telegraph gave way to the smartphone – with its instant global connectivity, apps and multimedia – blockchain technology has evolved rapidly to enable smart contracts that execute without human intervention, high-speed ‘Layer 2’ scaling solutions, cross-chain bridges and interoperability protocols.
Listen/read: Can tokenisation spark an economic revival in SA?
Today’s networks can process thousands of transactions a second at a fraction of the cost, support complex decentralised finance (DeFi) applications, tokenised real-world assets, and easy movement of value across previously isolated chains.
What began as slow, siloed experiments in digital scarcity has matured into a flexible, programmable infrastructure layer.
It’s a technological leap that traditional finance could no longer ignore.
Philipp Zentner, co-founder and CEO of LI.FI, has a front-row seat to this shift. A former web developer who launched LI.FI in 2021, Zentner bet early that digital assets would be fragmented across chains – and that was a problem that would have to be solved before the tech won universal acceptance. He set about solving that problem.
Today, over 1 000 enterprises use LI.FI’s technology – including Robinhood, Binance and several major digital wallets.
Problem, solution
“Stablecoins are solving the chicken-and-egg problem for so many value chains to come on-chain,” Zentner explains.
Without a reliable form of digital money, there was little incentive for real businesses and supply chains to move onto blockchain. That’s the big change enabled by stablecoins. Whole industries are now incentivised to move on the blockchain (on-chain).
“We saw many industries trying to come on chain, from gaming to supply chain, making logistics transparent … But there is no strong incentive to migrate if there is no financial system to work with.
“Regulatory frameworks like the [US] Genius Act now allow whole industries to come on chain and create new efficiencies amongst market participants.
“And that’s why we see this huge influx of stablecoins. We see large corporations, large banks, issuing their own stablecoins and furthermore obviously we are seeing different players trying to make it a winner-takes-it-all market. Like [USD-pegged stablecoins] Tether and Circle.
“Stablecoins enable money markets,” Zentner adds. “Suddenly businesses can leverage transparency and automation that previously took months of paperwork and intermediaries.”
Take a T-shirt manufacturer: on-chain sales create verifiable productivity data. This could allow permissionless lending through money markets, bypassing traditional banks. “All of that is enabled by stablecoins in the first place.”
Tokenisation of real-world assets like treasuries, equities, property and commodities is the natural next step.
For this to happen at scale, the current fragmentation between blockchain technologies must be overcome.
Digital assets currently live on public chains like Ethereum and Solana, closed systems like BlackRock’s BUIDL (USD Institutional Digital Liquidity Fund) and other specialised networks.
Different smart contract languages, asset standards, and bridges create complexity for trading desks and brokerages. This is where LI.FI fits.
Like Stripe for payments or Twilio for communications, LI.FI aggregates chains, data providers, exchanges, and bridges into one smart order-routing API (application programming interface). It handles everything from simple swaps to complex rebalancing for large funds – optimising for speed, cost, and use case.
Listen/read: Will stablecoins one day rule the world?
Zentner is unfazed by the current narrative that ‘DeFi is dead and TradFi has won’. He sees a hybrid future: institutions bring trillions on-chain, creating fertile ground for new DeFi applications.
Regulatory approaches will vary – more open in parts of Africa, Southeast Asia, or the Middle East – eventually influencing the West.
“We are very, very early,” he says. “Blockchain infrastructure is still immature, but it’s an absolute necessity.
“It will bring humanity together on a new level, like the internet did – but we’re looking at another 10 to 15 years for the full outcome.”
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