BitcoinWorld Stablecoins Surge: MUFG Analyst Reveals Why Digital Cash Outshines Bitcoin as Practical Currency TOKYO, March 2025 – In a significant development for digital finance, Mitsubishi UFJ Financial Group analyst Lee Hardman has presented compelling evidence that stablecoins possess superior characteristics as functional currency compared to Bitcoin. This analysis emerges during a pivotal moment when global financial institutions increasingly explore digital asset integration. Hardman’s report, detailed in The Crypto Basic publication, highlights fundamental differences between these cryptocurrency categories that could shape future monetary systems. Consequently, his findings provide valuable insights for regulators, investors, and technology developers navigating the evolving digital economy. Stablecoins Demonstrate Currency Advantages Over Bitcoin Lee Hardman’s comprehensive analysis identifies three core attributes where stablecoins excel as currency alternatives. First, price stability mechanisms enable reliable transaction values. Second, transaction speed and cost efficiency facilitate practical daily use. Third, regulatory frameworks increasingly recognize their payment functionality. Meanwhile, Bitcoin maintains its position primarily as a store of value asset. Financial institutions worldwide now acknowledge this functional distinction. For instance, payment processors increasingly adopt stablecoin networks for cross-border settlements. This trend reflects broader industry recognition of Hardman’s assessment. Recent data from the Bank for International Settlements supports these observations. Their 2024 report documented stablecoin transaction volumes exceeding $7 trillion annually. Comparatively, Bitcoin’s daily transaction volume remains significantly lower for payment purposes. Furthermore, stablecoin adoption grows consistently across emerging markets. Countries like Nigeria and Brazil report increasing stablecoin usage for remittances. These real-world applications demonstrate practical currency functionality. Hardman’s analysis therefore aligns with observable market behaviors and institutional adoption patterns. Digital Cash Evolution and Financial Infrastructure The concept of digital cash undergoes rapid transformation within global financial systems. Central bank digital currencies (CBDCs) now enter advanced testing phases across sixty-eight countries. Simultaneously, private stablecoin projects expand their technological capabilities. This parallel development creates a complex ecosystem for digital currency. MUFG’s analysis positions stablecoins within this broader context. Specifically, Hardman emphasizes their role as transitional instruments between traditional and digital finance. Consequently, financial institutions increasingly incorporate stablecoin protocols into existing infrastructure. Expert Perspectives on Currency Functionality Financial experts globally echo aspects of Hardman’s assessment. Dr. Sarah Jenkins, monetary economist at Cambridge University, notes: “Stablecoins address the volatility problem that hinders cryptocurrency payment adoption.” Her research demonstrates that price stability remains the primary requirement for transactional currency. Additionally, payment network analysts highlight technological advantages. Stablecoin transactions typically settle within seconds for minimal fees. Bitcoin transactions, while secure, often require longer confirmation times during network congestion. These practical differences significantly impact real-world usability. The following comparison illustrates key functional distinctions: Feature Stablecoins Bitcoin Price Stability Pegged to fiat/reserves Market volatility Transaction Speed Seconds to minutes 10 minutes to hours Transaction Cost Typically under $0.01 Variable, often higher Primary Function Payments/transactions Store of value Regulatory Status Increasing clarity Evolving classification Market data from 2024 reveals significant adoption patterns. Payment platforms processed over 450 million stablecoin transactions quarterly. Meanwhile, Bitcoin transaction counts remained relatively stable. This divergence suggests different use cases gaining market recognition. Financial institutions particularly value settlement efficiency. International transfers using stablecoins now complete within minutes instead of days. Consequently, corporate treasury departments increasingly explore these digital instruments. Global Regulatory Developments and Market Impact Regulatory frameworks evolve rapidly to address stablecoin proliferation. The European Union’s Markets in Crypto-Assets (MiCA) regulation establishes comprehensive rules. Similarly, Japan’s Payment Services Act undergoes amendments for stablecoin oversight. These developments create clearer operational environments. MUFG’s analysis arrives during this regulatory maturation period. Hardman specifically references Japan’s progressive stance on digital currency. The country’s large banking consortiums now develop their own stablecoin projects. This institutional participation signals serious financial sector engagement. Market impacts already manifest across multiple sectors: Remittance Industry: Transfer costs decreased by 40-60% using stablecoin networks E-commerce: Major platforms now accept select stablecoins for payments Corporate Treasury: Fortune 500 companies allocate portions to stablecoin instruments Developing Economies: Stablecoin adoption accelerates financial inclusion efforts Technological advancements further enhance stablecoin capabilities. Layer-2 solutions and cross-chain interoperability improve scalability. Meanwhile, privacy-preserving features address confidentiality concerns. These innovations address earlier limitations identified by financial analysts. Consequently, adoption curves steepen across diverse demographic segments. Young consumers particularly embrace digital cash alternatives. Surveys indicate 68% of millennials consider using stablecoins for regular payments. Bitcoin’s Evolving Role in Digital Asset Ecosystems Bitcoin maintains crucial positions within cryptocurrency markets despite currency functionality limitations. Institutional investors increasingly treat Bitcoin as digital gold. Portfolio allocations commonly range between 1-5% for diversification purposes. This investment perspective differs fundamentally from currency usage. Hardman’s analysis acknowledges Bitcoin’s store-of-value characteristics. However, he emphasizes different design priorities between Bitcoin and stablecoin protocols. Bitcoin’s decentralized architecture prioritizes security and censorship resistance. Conversely, stablecoins optimize for stability and transaction efficiency. Market capitalization trends reflect these functional distinctions. Bitcoin dominates overall cryptocurrency valuation at approximately 45% market share. Stablecoins collectively represent about 15% but demonstrate faster growth in transaction metrics. This divergence suggests complementary rather than competitive relationships. Financial analysts increasingly view Bitcoin and stablecoins as serving different purposes within digital asset portfolios. Investment firms now recommend allocations to both categories based on distinct risk-return profiles and use cases. Conclusion MUFG analyst Lee Hardman’s assessment highlights stablecoins’ superior functionality as practical currency compared to Bitcoin. Price stability, transaction efficiency, and regulatory progress position stablecoins as viable digital cash alternatives. Meanwhile, Bitcoin maintains its established role as decentralized store of value. Global financial systems increasingly recognize these functional distinctions through infrastructure development and regulatory frameworks. Consequently, both cryptocurrency categories will likely play significant but different roles in future digital economies. The stablecoin currency proposition gains substantial credibility through institutional analysis and real-world adoption patterns. FAQs Q1: What specific advantages do stablecoins have over Bitcoin for payments? Stablecoins offer price stability through fiat currency pegs, faster transaction confirmations typically under one minute, and lower transaction costs often below $0.01, making them more practical for daily transactions. Q2: How do major financial institutions view stablecoins currently? Institutions like MUFG increasingly recognize stablecoins’ payment functionality, with many developing their own projects or integrating existing stablecoin networks for settlement efficiency and cross-border transfers. Q3: Does this analysis suggest Bitcoin has no value in digital finance? No, the analysis distinguishes between currency and store-of-value functions. Bitcoin remains important as decentralized digital gold, while stablecoins serve better as transactional currency due to their design characteristics. Q4: What regulatory developments support stablecoin adoption as currency? The EU’s MiCA regulation, Japan’s amended Payment Services Act, and proposed U.S. legislation provide clearer frameworks for stablecoin issuance and operation, increasing institutional confidence. Q5: How might stablecoins impact traditional banking systems? Stablecoins potentially enhance payment efficiency and reduce costs for banks, particularly for international settlements, while also creating competition that may accelerate innovation in traditional financial services. This post Stablecoins Surge: MUFG Analyst Reveals Why Digital Cash Outshines Bitcoin as Practical Currency first appeared on BitcoinWorld .
