Here’s why Stablecoins already eliminate the need for central bank digital currencies (CBDCs).

Stablecoins or digital tokens linked to dominant fiat currencies such as the US dollar or the Euro have developed thanks to major improvements to their underlying technology as well as progressive regulations under the Trump administration. And whenever the United States effectively leads, the rest of the world follows (not necessarily by choice, but by necessity, as the US remains decisively the world’s largest economy with a GDP approaching $40 trillion).

With the rise of digital assets, tokenization and stablecoins, it now appears that central bank digital currencies or CBDCs will become completely unnecessary. While there is currently a battle being waged by major banks like JPMorgan (NYSE:JPM) and digital asset firms like Coinbase (NASDAQ:COIN) regarding stablecoin returns, one thing has become abundantly clear in the US at least: there is hardly any real support for so-called central bank digital currencies, or CBDCs. And rightfully so. Interestingly, China has been firmly in the lead when it comes to issuing and transacting CBDCs, but that may not be such a good thing.

These seemingly innovative CBDCs are a kind of surveillance tool because they can very effectively associate private, personally identifiable data with every digital transaction made by Chinese consumers and any other regions such as Europe where CBDCs and the digital euro are introduced.

For individual consumers and even businesses, this takes away their financial privacy and can negatively affect their financial well-being. So it basically goes against what Fintech and digital assets aim to offer: greater financial autonomy and the freedom to transact across borders without all the unnecessary friction.

Given these concerning issues with CBDCs, it is perhaps no surprise that a central bank digital currency has failed to gain much support from US policymakers, especially under the Trump administration. Given these developments, it is also very clear that consumers in the US are increasingly preferring stablecoins instead of the more invasive CBDCs.

In fact, Fintechs like SoFi Technologies and PayPal have rolled out their own stablecoins and are very serious about helping users transact with these digital tokens. Additionally, the convergence of TradFi and DeFi in the US and globally has made it necessary for Fintechs such as Brex, Thunes, among others to launch their own stablecoin-focused products.

Unlike CBDCs, stablecoins are able to work more seamlessly within the existing financial services ecosystem. Large, permissionless (and some permissioned) blockchains such as Ethereum and Tron (among many others) are used to issue stablecoins such as USDC and USDT. There is also growing regulatory support for these so-called digital dollars in the United States.

And as we have seen for many decades, the US naturally takes the lead in setting global standards in technology, finance and most other industries. With the exception of pure manufacturing where China is clearly ahead of the US, there is no second best. The US should continue to lead the crypto economy by embracing stablecoins and other innovations such as tokenization and digital securities.

And while China and the European Union under leaders like Christine Lagarde have been quite aggressive in encouraging the use of CBDCs and Digital Euro, this momentum will most likely be short-lived and decline rapidly.

This is because stablecoins have already grown into a $300 billion+ market and show no signs of slowing down. Even in major Asian markets, Hong Kong has come up with its own stablecoin-focused regulatory framework. It can be argued that these developments will most likely eliminate the need for transactions with CBDCs in the foreseeable future.

Although there are still many long-term CBDC pilots and projects being carried out, these digital currencies are not actually being developed with the best interests of individual consumers in mind. Ensuring privacy, providing reliable ways to transact globally while preventing any unnecessary government-led surveillance should be considered basic human rights. And the US is certainly moving in this direction under the Trump administration.