Part 4 of 4 of the stablecoin series. Read Part 1, Part 2, and Part 3.
As we wrap up this four-part series on stablecoins, I want to take a step back in time—before blockchain, before digital wallets, and even before modern payment networks. I want to talk about something that many may remember: the traveler’s check.
A Short History: The Traveler’s Check as an Early IOU
Once upon a time, if you were traveling abroad—say, from Pakistan to London—your bank could issue you a traveler’s check. You’d sign it before you left, and then sign it again when presenting it at a hotel or restaurant abroad. That second signature made it valid, acting like a certified IOU.
To the recipient, this piece of paper was almost as good as cash. Why? Because it came with a built-in promise: if they deposited it, they’d get their money in a few days. That trust turned the traveler’s check into a tradeable item. Hotels started giving them to suppliers, who might pass them to staff, and so on—all before it was finally cashed out. It was liquid, portable, and reliable. In a way, it was an early form of “cloud money.”
From Traveler’s Checks to Stablecoins
Today, when we talk about stablecoins, we are talking about a similar concept—but in a completely digital form. Stablecoins are essentially digital IOUs. They are payment instruments built on Layer 2 infrastructure (blockchains), and they only work because there’s a certainty behind them: there’s real money somewhere backing them.
Like the traveler’s check, stablecoins can be traded, passed around, and held—until someone decides to cash out. But now, that value exists in the cloud. It can be in any country, on any chain, on any wallet. It is global, decentralized, and omnipresent.
Why “Cloud Money” Matters
Cloud money is revolutionary for one simple reason: it detaches money from geography. Traditional money is deeply tied to legacy systems—banks, SWIFT networks, national regulators, and compliance procedures. But cloud money exists everywhere and nowhere at once.
Think about how music used to work. You bought a cassette, a CD, or a record. You physically owned it. Now? We stream it from the cloud. We subscribe to it. We don’t hold it; we access it. If we can shift our entertainment to the cloud, why not our money?
Thanks to the rise of stablecoins—USDT, USDC, EuroC, and others—we now have the tools, the infrastructure, and the participants to make cloud money a reality.
The Dominance of the Dollar (and More to Come)
Most stablecoins today are pegged to the US dollar. And rightly so. The vast majority of global trade is settled in dollars. But other currencies will follow: the euro, yen, rupee, reais, and beyond. Stablecoins in these denominations will come to dominate regional commerce, just like their fiat predecessors did in the physical world.
The Key Challenge: Institutional Acceptance
Here’s the catch.
If I go to a bank with a traveler’s check, I can cash it. The bank knows what it is. But if I walk in with a stablecoin, even though the bank may understand what a stablecoin is, it doesn’t recognize it as a valid financial instrument.
Banks today do allow on-ramping and off-ramping (i.e., converting fiat to stablecoins and vice versa), but they consider it your risk, not theirs. Stablecoins are not part of the formal financial ecosystem—yet. This is not just for the US banks, but more so for banks outside the United States.
Until banks and governments accept stablecoins as legitimate instruments of value, cloud money remains in limbo. And this acceptance is absolutely essential for cloud money to flourish.
Stablecoins as Cloud Money: Why This Matters for the Future of Finance
Stablecoins aren’t going anywhere. In fact, they represent the future of money—just like email was the future of communication.
We are entering a phase where we’ll have different kinds of money: decentralized, centralized, community-issued, and institutionally backed. There will be loud players and quiet innovators, early adopters and legacy laggards. The one thing they’ll all have in common? They’ll exist in the cloud.
Governments and central banks will need to recognize stablecoin balances as legitimate forms of capital. Imagine a country like Pakistan or Nepal saying, “All wallets associated with our citizens that hold USDT or USDC can be counted toward our FX reserves.”
This shift will change everything—from how credit is extended to how governments manage wealth, risk, and economic growth. An entirely new financial ecosystem is emerging—and it’s being built on the foundation of stablecoins.
A Circle Completed, Digitally
We’ve been here before. A couple of hundred years ago, private banks issued their own money. The traveler’s check was another iteration. Today, we’ve come full circle—but this time, it’s digital, borderless, and fast.
Stablecoins are already here. Now we need governments, central banks, and regulators to catch up. Imagine if stablecoin balances were accepted for lending, deposits, and investments. That’s not a far-fetched future—it’s a coming reality.
The Cloud Is Already Here—Money’s Turn Is Next
Think about it:
We already stream our music.
We already store our photos.
We already shop online.
We already work remotely.
We already socialize on cloud platforms.
It’s only natural that our money follows. Stablecoins are just the beginning—just like the internet in 1994. We’re only scratching the surface of what’s possible.
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This page was last updated on April 7, 2025.
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