Stablecoins have many use cases other than casino deposits and I believe trading is still the place where stablecoins are mainly used, and it brings convenience without need to convert crypto to fiat every time they want to hold their capital which is something stable like fiat. And then there is remittance, which brings a whole new use case in recent times.

But the core concept of stablecoins is not aligned with Bitcoin or decentralization so Bitcoin enthusiasts who embrace and preach decentralization will not use stablecoins.

I agree.

Bitcoin and other floating cryptos are meme investment instruments and their purpose is to make the holder richer by them selling it for more than they paid for it based on its increasing popularity.

Stablecoins are utilities that solve technical problems.

It's like comparing a rake and a roulette wheel.

Bitcoin does not compete with stablecoins, it competes with stocks, bonds, sports betting, prediction markets, etc.

Stablecoins compete with Swift, bank transfers, credit cards, etc.

Two different things in two different markets.

That's why stablecoins are made because they are trying to follow the image of bitcoin, although that's impossible because bitcoin is decentralized while majority of the stablecoins are centralized in nature.

Now, if you demand for stablecoins to be separated from bitcoin, then that's beating their own purpose why they exist in the crypto market. Where bitcoin is dominant, that's where stablecoins are also trying to establish their means. Tether(USDT) and USD Coin(USDC) are two major stablecoins but they don't compete directly with bitcoin, since both have still different economic roles, bitcoin as a long term decentralized asset while stablecoins are made for day to day payment transactions.

Stablecoins have few use cases outside of the crypto market. They are mostly used for different trading and exchange-to-exchange transfers. For almost all other use cases, simple e-money (Paypal etc.) is cheaper and even faster.

That's why I consider it difficult that they will become "separated" from the crypto market. There are some very limited use cases like inflation protection in countries with strict exchange restrictions (e.g. Argentina) but as soon as these measures are relaxed the stablecoin usage usually declines again.

I guess that the fate of stablecoins will be mainly depend on two questions:

1) if the altcoin market stays relevant. There is currently a decline of the altcoin market, and it could drag stablecoins down with them as they are mostly used for trading-related activities. But maybe it stagnates, and then stablecoins may stay relevant. (I don't think the altcoin market will disappear, by the way, but we may head back to 80% or more of Bitcoin dominance, with some memetoken fads popping up every now and then.)

2) if they can preserve a regulation privacy advantage over e-money. E-money almost universally needs KYC, stablecoins until now do not if you trade them P2P. But to exchange fiat to stablecoins, somebody will see your personal data or your face if you're trading in cash. This makes them more suitable for payments you don't want anybody to know about, and also for some kinds of remittances.

If they can preserve these niches mentioned in the second bullet point, then it's indeed possible that they stay relevant even if the altcoin market dies out, and that's the only chance for me that we'll see a separation of stablecoins and the crypto market. Stablecoins will then perhaps evolve into a more direct competitor to PayPal and similar services.

I tried to search for data about what you have said about the decline of usage of stablecoin and it seems you are right base on this article https://crystalintelligence.com/stablecoin/what-drove-the-stablecoin-supply-down

But I think that decline is temporary since many people would still use those coins, but well the usage will depends on how they would like to use it.

Also those coins survive and many people still user it, because it offer something that those e money can't provide.

1. Is it has liquidity on p2p even without doing providing KYC.

2. Anyone can access and use those coins even those country which have  dysfunctional or broken banking infrastructure.

Also they actually don't need to be separated from cryptocurrencies to remain relevant. What they need is to serve their niche on which banks also the Paypal hard to penetrate. So even if the altcoins will decline its niche will not provably vanish.

in a certain way bitcoin and stablecoins have received a mutual advantage and we are still seing nowadays the effect with upcoming regulations.
these are just cryptos... just another form of shitcoins but resembling FIAT
I would not see any doubt but these are two completely concept and bitcoin doesn't deserve to have any kind of FIAT for working.
about MICA and EU, they are deploying their centralized token - digital euro.
for sure with proxies or new regulations they would be forced to adopt more of the new stablecoins.

Interesting article. In reality, however, I referred to the decline of the altcoin market in general. Only a handful have reached new ATHs in 2025 for example, and there are only few "exciting new coins". That's drastically different from the 2021 bull market. And the Bitcoin dominance is also increasing. So I was more talking about a long term effect here.

You're correct, but both use cases are very niche-y. There are very few people in comparison to the CEX volume who trade stablecoins P2P, above all to fiat. And if you can trade stablecoins to fiat via P2P exchanges, then you probably have a working bank account and/or e-money wallet.

I guess there are very few countries withot a working e-money infrastructure. In South America for example there are usually 5-10 or more Paypal-style providers per country (more than in Europe who has to resort to CBDC ). And if you want to buy dollars via e-money this is even possible in countries like Argentina now.

The question would thus be: who has 1) no bank account and 2) can buy and/or make use of stablecoins? You'll need to buy them with cash, or earn them in some way, and I guess there are people doing this but the number should be very low.

I'm generally happy that stablecoins exist in the current market, because they give an additional use case in extreme edge cases, like homeless people who have a smartphone but not a steady address, or people in regions devastated by warfare. Once Bitcoin becomes more stable it could replace these use cases though.

Thus my conclusion is that if altcoins decline further, stablecoins will also lose importance, and that will be even more pronounced if Bitcoin's volatility continues to decline.

Busd doesnt even exist anymore 
About 3 years ago it was discontinued.

That's right. Thank you. I have forgotten that BUSD was under regulatory pressure years ago. I'm not that a fan of stablecoin.
The shutdown of the BUSD is more of a reason for them to operate with USDT and USDC the way they did to broaden the usage of their bep20 network.