Stablecoins have effectively existed since 1904 when Panama adopted the U.S. Dollar as its official currency. Since then, numerous other countries have "dollarized" to various extents - today the USD is the primary currency in 8 countries, and 21 widely accept it for day-to-day purchases.

For the most part, dollarization has done its job: no "money printer go, brrr" (see articles by Harvard and The World Bank for more), but it can be a charged topic for some.

In 2008 I was living in Ecuador (they dollarized in 2000) and found myself in the wrong place at the wrong time: a protest outside the U.S. Embassy. Amongst other things, protestors were burning U.S. Dollars while shouting "Fuera!, Fuera!, Fuera los estadounidenses!" - essentially: "Out with the Americans."

The protest wasn't directly about dollarization, but for them, it was a symbol of modern-day colonialism. So there’s more at stake around adoption of USDC, USDT, and other USD-branded stablecoins than just bank settlements, efficient international money transfers, and the dollar's status as a global reserve currency.

Given how P2P crypto is with people being able to access stablecoins such as USDC and USDT directly via a DEX, I have hope that if widespread consumer adoption happens, it will be through grassroots demand and not through imposed government policies.

While unsanctioned dollarization could undermine the state's monetary policy, foreign governments will have a choice about whether or not to officially sanction USD/USDC/USDT, or try to control its citizens' use of crypto. We've seen this happen in China, Iraq, Algeria, and some other countries - but in general, it is challenging to accomplish.

Stablecoins such as USDC and USDT have the potential to positively impact the lives of billions of people by enabling choice of currency - something only the wealthy had previously.

At the same time, it has the potential to be a contentious, geopolitically charged topic and needs to be navigated with care.