When US president Donald Trump launched his own meme cryptocurrency on January 17, days before his return to the White House, I was halfway up a Swiss alp, attending a crypto conference in the town of St. Moritz.

Memecoins, which typically have no purpose beyond financial speculation, were having a moment. The previous year, millions of new memecoins had flooded the market; a few, like Fartcoin, had rocketed to billion-dollar valuations. Pump.Fun, a platform for launching and trading memecoins, had become one of the fastest-growing crypto launchpad businesses ever. Now, the soon-to-be president was getting in on the act.

Over lunch on the second day of the conference, beneath the ornate stucco ceiling and golden chandeliers of the venue’s dining hall, I located a table designated for a conversation about memecoins. Whereas other tables were half full, the memecoin workshop was oversubscribed; latecomers pulled up chairs to create two full rows.

The discussion was led by Nagendra Bharatula, founder of investment firm G-20 Group. Bharatula had recently coauthored a paper arguing that memecoins, despite their juvenile spirit, had a place in professional investors’ portfolios. In the six months prior, a basket of 25 “bluechip memecoins”—an oxymoron if ever there was one—had outperformed bitcoin by 150 percent, he pointed out. Some of the attendees murmured their approval.

Since then, the shine has come off the memecoin market. The paper value of Trump’s coin, which climbed to a peak of $14 billion two days after its launch, has cratered to roughly $1 billion. Hundreds of thousands of small investors lost their shirts. Pump.Fun’s daily revenue, a proxy for the overall appetite for memecoin trading, is barely more than a tenth of what it was in January. The memecoin gold rush has spawned a raft of litigation.

Next up: the stablecoin. If memecoins are symbolic of reckless abandon and unflinching profiteering in cryptoland, stablecoins are a symbol of the industry’s search for purpose and respectability. Designed to hold a steady $1 valuation, stablecoins are pitched by proponents as a faster and cheaper way to make everyday payments and international money transfers.

In a year in which the US has declared itself open for crypto business, where previously crypto firms feared regulatory backlash under the Biden administration, stablecoins have supplanted memecoins as the coin à la mode—and punctured the mainstream.

Though stablecoins have been around since 2014, they have predominantly been used by crypto traders as a safe harbor during bouts of market volatility, not by regular people. The concept has also faced resistance from regulators skeptical of a new form of money; Diem, a stablecoin venture incubated at Meta, famously shuttered in 2022 in the face of broad-based opposition.

The stablecoin breakthrough arrived in July, when the US House of Representatives voted overwhelmingly to pass the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, the country’s first ever piece of crypto-specific legislation.

Typically, stablecoins are held to a $1 valuation by an underlying reserve of cash and other assets, from which issuers generate interest. The GENIUS Act established rules that require stablecoin companies to back their coins with exclusively low-risk assets—like US government bonds—on a one-to-one basis, provide accounts to a state or federal regulator, and maintain anti-money-laundering controls.

As the GENIUS Act progressed through Congress, critics had attacked the bill as a gift to the crypto industry, which spent hundreds of millions of dollars on lobbying ahead of the 2024 congressional elections. “New laws are needed to establish crypto guardrails and safeguards, but this one is ineffectual or worse,” said Democratic senator Richard Blumenthal.

Other critics argued that a rapid expansion in stablecoins could destabilize the financial system if regulators fail to maintain flawless oversight. If, for example, a major stablecoin company were to fatally mismanage a reserve, leading to a collapse in the coin’s price and a potential run on other stablecoins, the value of US government bonds could tumble as issuers rush to sell assets to cover redemptions. Among other unpalatable consequences, bond-laden pensions would be decimated.

“The question is: How much damage would a run do?” says Christian Catalini, founder at MIT Cryptoeconomics Lab and cocreator of Diem. “The way stablecoins are designed today, I think it could do some damage. Under GENIUS, that becomes very, very narrow,” he claims.

The crypto industry generally celebrated the GENIUS Act’s passage as a step toward protecting stablecoin holders from fraud and mismanagement. “Gone are the days where you could be a stable-in-name-only coin and freely enter the US market,” Dante Disparte, chief strategy officer at Circle Internet Group, the company behind the USDC stablecoin, told WIRED in July.

Since the GENIUS Act was written into law, the total value of stablecoins in circulation has ballooned from around $250 billion to more than $300 billion. US treasury secretary Scott Bessent has said that he believes that figure could reasonably climb to $2 trillion.

Increasingly, traditional payment processors and fintechs are forging into the stablecoin business. In April, Mastercard announced a service that lets cardholders pay in stablecoin. In November, buy-now, pay-later company Klarna launched its own stablecoin. Recently, Visa began to pilot a program whereby businesses use stablecoins for cross-border payments. “The GENIUS Act changed everything,” Mark Nelsen, a head of product at Visa, told Reuters.

A consortium of international banks, including Bank of America, is investigating the possibility of jointly issuing a stablecoin too.

As new entrants pile in, the margins for stablecoin incumbents are expected to become increasingly tight. Because revenue scales linearly with the amount of a given coin in circulation, experts predict that stablecoin companies will have to give up a large portion of the interest generated by their reserves to partners that help to distribute their coins.

Ultimately, that squeeze is likely to lead to consolidation, as smaller stablecoin companies are either acquired or fall by the wayside. “Margins will be severely compressed,” says Catalini. “In the end, whoever has or builds the largest distribution will win.”

At the upcoming edition of CfC St. Moritz, the crypto conference in the alps, stablecoins loom large on the agenda. There will be talks on stablecoin regulation, design, adoption, fringe applications, and so on. By contrast, there will be nary a memecoin in sight.