Finance’s Format Moment: What Stablecoins Make Possible
What the rise of Netflix and Spotify can teach us about where stablecoins are headed.
Finance has never experienced what digital media, music, and video have already gone through: a fundamental shift in who builds, who wins, and how ecosystems form. New digital formats enabled these transformations by making entirely new user experiences possible. Stablecoins are finance's first real digital format change. This opens the door to the same kind of outsider creativity that gave us Netflix, YouTube, iTunes, and Spotify, none of which came from the industries they transformed.
The history of digital format shifts reveals more about stablecoin potential than debates about whether stablecoins are "real money." Focusing on monetary properties is like imagining the future of music by staying locked in arguments over MP3 audio quality. The breakthrough insights come from understanding what kinds of businesses digital formats enable.
Format changes create outsider moments. Hollywood couldn't imagine Netflix because they thought in theatrical windows, not on-demand streaming. Record labels couldn't imagine iTunes because they thought in albums, not songs. Finance has never had a true digital format change, so innovation has been constrained by existing infrastructure—limiting the kind of creative repattern by outsiders that transformed music and video.
Stablecoins let the outsiders in. This doesn't mean digital money is identical to digital media—money is regulated, and people experience earning, spending, and losing money very differently than consuming content. But digital money will need to go through the same fundamental steps: changing customer behavior and building enduring businesses around new user experiences.
Like all format changes, success depends on building the right foundations—user adoption, regulatory relationships, developer ecosystems, and behavioral patterns—around the format. The winners will be those who see past today's constraints to build something entirely new.
This analysis focuses on retail applications of stablecoins - how they might reshape everyday financial experiences for individuals rather than institutional treasury or B2B payment use cases.
Beyond Speed and Cost
To understand what will drive stablecoin adoption, we need to look beyond format features to what actually makes new systems stick. Transaction speed, cost reduction, and settlement improvements matter, but they don't build lasting advantage on their own.
Value accrues when companies build superior user experiences enabled by the new format. The MP3 succeeded because Apple created iTunes and the iPod ecosystem, while Spotify built recommendation algorithms, curated playlists, and social features. The format enabled these innovations, but building compelling experiences determined who captured value.
This pattern appears consistently across successful digital businesses. Netflix transformed video through on-demand streaming and recommendation algorithms. YouTube enabled user-generated content through upload tools and discovery features. TikTok created vertical video culture through editing tools and algorithmic feeds. Each company accumulated different capabilities than incumbents —the foundations required to deliver new user experiences.
Current stablecoin discourse obsesses over format features—speed, cost reduction, settlement transparency, and cross-border efficiency. But successful digital companies show that format advantages alone don't determine winners. Instead, superior user experiences transform industries by redefining what's required to deliver them.
The opportunity remains open for companies who focus on creating new financial experiences with programmable money. Success will come from developing trust, adoption, and developer ecosystems around these new financial experiences.
It’s What’s Up Front That Counts
Successful digital format changes shift who controls access to new possibilities. Netflix, YouTube, and Spotify didn't just digitize content—they became the interfaces through which people accessed all movies, videos, and music. The "everything wrapper" became the source of power: whoever controlled the universal access point controlled the user relationship.
Stablecoins enable the same interface shift in finance: moving from account-based systems to wallet-native experiences. Accounts represent institutional custody where banks control rails, own customer relationships, and determine functionality. Money exists as ledger entries accessible through institutional interfaces, subject to their rules and operating hours.
Wallet-native systems flip this dynamic. Users control their own financial interface rather than accessing money through bank websites and apps.
Apple Wallet demonstrates this transition by storing payment credentials, loyalty cards, and identity documents directly on devices, enabling new experiences without requiring bank partnerships for every feature. Instead of logging into separate apps for each service, users access everything through a single interface they control.
But Apple Wallet still relies on underlying account-based infrastructure for payments. Stablecoins could enable mainstream wallet-native experiences where users control actual financial value, not just payment credentials. The wallet becomes the primary financial interface.
Traditional banks built capabilities around institutional custody, regulatory compliance, and customer account relationships. A dominant financial wallet would need entirely different capabilities. Just as Spotify needed different capabilities than record labels to become the music interface, the requirements will follow from what's needed to control the financial interface - but they'll be fundamentally different from what banks built.
When value moves to the front end, it rarely accrues to those who issue or control the format itself. Record labels didn't capture the value from MP3s - Apple and Spotify did by building superior interfaces. Movie studios didn't dominate digital video - Netflix did by controlling how people accessed content. Similarly, stablecoin issuers may enable the format, but the lasting value will flow to whoever builds the most compelling financial interfaces around wallet-native money.
Let’s Get Physical
Digital format changes don't just happen in software. They succeed by embedding into physical experiences that people can see, touch, and understand. Compare successful digital format introductions:iPod offered '1,000 songs in your pocket.' Kindle provided thousands of books on a 'paper-like display' you could read at the beach. These were tangible, immediate benefits people could understand.
This physical requirement is especially important for retail payments, where stablecoins face their biggest adoption challenge. Successful payment innovations have always combined digital capabilities with physical interfaces that people can trust and understand.
Square's breakthrough illustrates how digital payment innovation requires physical thinking. The white dongle transformed any smartphone into a payment terminal, giving small merchants tangible tools they could understand and trust.
Apple Pay succeeded by leveraging existing physical infrastructure—phones in hands, card readers at merchants. WeChat Pay and Alipay recognized phone cameras as payment infrastructure, using QR codes to bypass card networks entirely.
Stablecoins will need the same physical thinking. Digital format changes succeed when they unlock new physical experiences or leverage existing physical capabilities in new ways.
Much of current stablecoin payment discourse emphasizes flows—instant settlement, low fees, cross-border efficiency—over the physical payment interfaces needed to make these benefits useful in retail settings.
Bring on the Hits
Digital formats create initial abundance that consistently gives way to market concentration. Music streaming consolidated around Spotify and Apple Music. Video platforms concentrated around Netflix and YouTube. Even supposedly decentralized crypto markets show dramatic concentration, with most DeFi assets living on Ethereum despite many alternative blockchains.
This concentration happens even when different platforms serve different contexts. Netflix dominates video streaming, YouTube dominates user-generated content, and TikTok dominates short-form video. The key is that each context develops its own concentrated platform rather than fragmenting across many equal competitors.
Stablecoins carry similar expectations of limitless innovation and broad distribution. But like other digital formats, the reality will be more focused.
Stablecoin value propositions tend toward context-specific applications: cross-border transfers without correspondent banking, access to dollar-denominated savings in inflationary economies, or programmable money for developers building financial applications. This suggests concentration will happen within contexts rather than one universal winner.
Within each context, the winners won't be determined by technical superiority, but by creating the most compelling user experiences. These superior experiences drive the network effects, trust accumulation, and ecosystem integration that create concentration—the same dynamics that made Netflix, Spotify, and YouTube the leaders in their domains.
Concentration will follow use. Dominant platforms will emerge within each context, not because of the stablecoins themselves, but because of the experiences built around them. And as with other format shifts, the winners may be outsiders who build what industry insiders couldn't see coming.
Finance's Format Moment
Finance is finally experiencing its format moment. The question is how companies will approach format changes with the potential to reshape entire industries.
Format changes follow a consistent pattern, but not the one most people expect. Success doesn't come from modernizing existing industries but from enabling entirely new categories of behavior.
Netflix didn't emerge from Hollywood's efforts to digitize movies. YouTube didn't come from television's attempts to move online. TikTok didn't arise from anyone trying to improve video sharing. Each created entirely new categories of behavior - binge-watching, user-generated content, vertical video culture - that pulled their industries forward.
Much of the narrative around stablecoins assumes transformation happens by upgrading financial infrastructure. Faster settlement, lower fees. But that’s not how digital formats change industries. Success comes from building new user behaviors, controlling interfaces, and embedding into physical experiences people can understand and trust.
Stablecoins enable wallet-native money - financial value under user control rather than institutional custody. The breakthrough will come from discovering what becomes possible when users control their own financial interface, accumulating the right capabilities around experiences that can only exist in a wallet-native world.
The companies that build around these new possibilities will determine what finance becomes. The future belongs to those creative enough to construct entirely new categories of user experience that pull the industry forward.