Opportuna Newsletter #10 | Jul-25 | Stablecoin Edition

IPOs are picking up, but we have seen no slowdown in direct secondaries. Most of the activity remains concentrated in the US, while Europe is taking longer to reprice.

Last month, we participated in the Bloomberg Family Office event in Luxembourg. Next week, we are heading to the Bay area for a month. The schedule is packed with meetings with companies, GPs, business angels, and builders. I am confident we will come across some exciting secondary opportunities. If you know of anyone we should meet, please feel free to DM! The start of 2025 has been extremely busy, as we continue to deploy into high quality venture opportunities. Should you want to be added to our community, fill the form.

Given the interest, we decided to focus this edition on Stablecoins. We recruited experts Serim Ülkümen (Arcora), Ijeoma Okoli (Digital Economy Initiative) and Bam Azizi, from Opportuna’s portfolio company Mesh Connect, to review the text. Many thanks to all for their thoughtful comments.

Our “Chart of the Month” maps out the stablecoin value chain, offering a solid framework to approach the space.

In “Current Topics”, we explain how fiat-pegged stablecoins work and shed light on the regulatory and economic reasons behind their sudden rise to prominence.

Our “Long-Term theme” draws parallels with the developments of Eurodollars in the 60s/70s. The pace of stablecoin adoption suggests they will soon have serious implications for Monetary Policy Transmission and Crisis Management. They also present an interesting conundrum for current and future US administrations. USD stablecoin adoption may function as a new form of soft power - much like the internet before it - reinforcing the dollar's status as the global reserve currency. But this comes with a dilemma. If stablecoins create incremental demand for short-dated US debt, do they undermine the willingness to reduce US debt levels and budget deficits, potentially undermining confidence in the dollar in the long run? Or are they mitigating risks caused by other countries holding less US dollar official FX reserves?

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🚨 Highlights of the Month

Rumours that Apple has an interest in purchasing Perplexity, and is considering Anthropic or OpenAI to power Siri, confirms what we argued in our Platform Wars post published on June 19th. The mobile OS hierarchy is being redrawn. AI agents are emerging as the new interface layer - turning platforms like Perplexity from curiosities into distribution gatekeepers. The next platform war won’t be about devices or apps; it will be about who mediates intent.

On the IPO front, Figma just filed - 13 years after it was founded. You can find the S1 here. The business grew 48% in FY24 and 46% YoY in C1Q25; it will be one of the only publicly-listed SaaS company growing > 25% YoY. Figma reports 132% Net Dollar Retention, up from 125% a year ago. Its AI-powered products and features, including Figma Make product, rely on off-the-shelf foundational AI models. Impressive numbers highlighting how high the IPO bar was raised. 

Meanwhile, companies are announcing Stablecoins faster than we can edit this newsletter. Fiserv, one of the largest payment and fintech provider in the world, announced plans to launch FIUSD for banking and payment flows, leveraging infrastructure from Paxos and Circle. This represents a major step towards mainstream adoption. Market participants took notice; last month saw one of the worst performance for Visa and Mastercard stocks, as Stablecoins are increasingly viewed as a threat.

📈 Chart of the Month: The Stablecoin Ecosystem

🌐 Current Topics: Fifty Shades of Peg

Stablecoins are having a moment. Few topics fire up crypto bros and central bankers with equal intensity. Beyond the hype of scams and sensational headlines, genuine drivers propel their ascent. We anticipate significant adoption over the next 24 months that could reshape global finance.

At their core, stablecoins are digital representations of value designed to maintain stable purchasing power. Some are fully backed by fiat currencies or real-world assets and function like digital IOUs, redeemable for their underlying collateral. Others are collateralized by crypto assets or governed by algorithms that use market incentives and smart contracts to maintain their peg. Some rely on custody, others don’t.

For now, we are focused on fiat-pegged coins like USDC, USDT and PYUSD, which are (mostly) backed 1:1 by dollars or high-quality liquid assets.

Table 1: A Taxonomy of Stablecoins

The underlying mechanisms are crucial. For instance, Circle's USDC maintains its 1:1 peg to the U.S. dollar through audited reserves, predominantly held in short-dated U.S. Treasuries and cash. Approximately 90% of these reserves are managed by BlackRock through the Circle Reserve Fund (CRF), a government money market fund. When users deposit U.S. dollars into a Circle account, an equivalent amount of USDC is minted, ensuring a direct 1:1 ratio.

Momentum is building. On June 17th, the US Senate voted 60-38 to pass the bipartisan GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which, according to Ijeoma Okoli and Toby Norfolk-Thompson at Sentora, “opens the door for US banks to join the existing NYDFS regulated stablecoin leaders and create a diverse mix of regulated US-treasury backed stablecoins which should drive adoption for payments and financial products.” It mandates full-reserve backing, monthly audits, and AML compliance - clearing the path for adoption by real-world giants like Amazon and Walmart. Bam Azizi, CEO of Mesh Connect, an Opportuna portfolio company, says it best: “This is arguably an even more important moment for the industry than the Bitcoin ETF”.

The near-term utility of stablecoins is evident in cross-border payments and remittances. Operating 24/7 and without reliance on correspondent banks, stablecoins enable migrants and companies to send money faster and cheaper than traditional services. We could see fees drop dramatically, from 6-7% to under 3%, or even lower. Beyond cost savings, stablecoins' programmability via smart contracts can simplify compliance and automate aspects of these transactions.

By 2030, we may see an open, programmable stablecoin-based infrastructure revolutionizing global invoicing and settlement. Imagine a hybrid of Stripe, SAP, and Blockchain, offering real-time settlement in various currencies (USD, EUR, or synthetic), embedded compliance (KYC, AML), automated invoice payments via smart contracts, and open APIs for Enterprise Resource Planning (ERP) and e-commerce integration.

The ultimate winners will be compliant stablecoins, like USDC, deeply embedded into global trade networks through platforms such as Shopify, SAP, Amazon, or Maersk.

In the longer term, AI agents, with their capacity for autonomous operation and real-time decision-making, are becoming active participants in value exchange. Traditional financial systems are inherently ill-suited for the demands of a machine-driven economy. Stablecoins are a natural fit for autonomous financial interactions.

That said, this will require innovation. To meet latency, reliability, and confirmation time requirements for real-time agent decision-making, blockchain systems will need to evolve - particularly in terms of underlying performance characteristics.

Stablecoins aren’t just a crypto thing anymore. They are rapidly evolving into the essential rails for digital cash, poised to underpin a new era of financial transactions. However, like all significant financial innovations before them, they also introduce new risks that warrant careful consideration for financial stability.

🧭LT: From Petrodollars to Protocol Dollars

The rise of stablecoins presents a fascinating parallel to the Eurodollar market's past dominance, as Timothy G. Massad, of the Brookings Institution, argued in an article published last year. This section delves into the striking similarities and crucial differences, examining the evolving landscape of global finance and the challenges for policymakers.

Stablecoins echo Eurodollars in striking ways. Both create dollar-denominated instruments beyond direct U.S. regulatory reach, innovating financially while serving genuine market needs. Both have grown with unexpected speed and scale, complicating monetary policy and extending dollar influence globally. Yet both raise a conundrum, they exten the reach of the dollar, while potentially undermining U.S. monetary control.

Eurodollars thrived by offering higher interest rates and fewer regulatory hurdles compared to U.S. bank deposits, becoming a dominant force in international transactions. This presented U.S. policymakers with a fundamental dilemma: how to manage the dollar's global reach without direct control over a vast, expanding pool of offshore liquidity. It forced a re-evaluation of monetary policy, financial stability frameworks, and the broader implications of the dollar's internationalisation.

Today's policymakers face a similar imperative to adapt. Stablecoin adoption introduces new "Too Big To Fail" risks, centered on the issuers themselves. Tether accounted for 64% of  USD denominated stablecoin issuance in May 2025, while Circle's USDC represented 25%. A major issuer's failure in this highly concentrated market would have serious ripple effects across the financial system.

Policymakers must also closely monitor technological advancements like improved oracles, and cross-chain infrastructure. They are currently regulating behaviors that will increasingly be automated. As more decisions are governed by code, regulators need a deeper understanding of the underlying technology to craft effective policy.

Central banks generally assume an instrument begins to impact monetary policy transmission when it reaches 5-10% of M2. USD denominated stablecoins were 0.6% of M2 in December 2024, growing to 1.1% by May 2025. At this pace, they will hit 5% in just 40 months, raising questions about future monetary control.

Stablecoins will also introduce new complications during financial crises. How would different stablecoin models perform amidst bank failures or liquidity crunch? Eurodollars are primarily interbank markets, while stablecoins serve retail and institutional users directly. This difference might reduce policymakers' ability to enforce coordinated responses.

Geopolitically, stablecoin adoption represents a form of soft power, much like the internet before it. The U.S. benefits from an "Exorbitant Privilege"; the ability to borrow internationally in its own currency, reducing exchange rate risk and interest rates. Essentially, the rest of the world finance U.S. debt. USD stablecoin adoption could reinforce the dollar's status as the reserve currency, but also demands that US policy makers' reconcile this with the long-term risk posed by ever larger debt levels.

A build-up of foreign debt potentially undermines confidence in the dollar in the long run. Pushing for USD stablecoin adoption exacerbates this dynamic. Yet, can the U.S. afford to let digital Euros, digital Yens, and digital Yuans take precedence?

The parallels between Eurodollars and stablecoins illuminate the ongoing evolution of the dollar's global role. Policymakers face complex decisions balancing innovation, financial stability, and geopolitical influence in a rapidly digitizing world.

📌 Conclusion

From Eurodollars to protocol dollars, monetary power is evolving. Stablecoins are scaling faster than most realize - riding regulatory tailwinds, enterprise adoption, and real-world use cases. The implications span geopolitics, macro policy, and tech investing.

We are tracking it closely at Opportuna, as the convergence of stable infrastructure, AI agents, and cross-border capital flows reshapes markets.

We will be in the Bay Area this month to meet builders, investors, and acquirers. Know someone we should meet? Get in touch.

Until Next Time,
The Opportuna Team