DeFi and Stablecoins Drive Emergence of "Money2" Financial System

The emergence of a new financial system, dubbed “Money2,” is gaining momentum as decentralized finance (DeFi) and stablecoins continue to reshape the global monetary landscape. According to Michael Egorov, founder of Curve Finance, this evolution is not a speculative vision but a tangible transformation already under way, built on blockchain technology, smart contracts, and stablecoin infrastructure [1].

Early 2025 data highlights the significance of this shift, with the total supply of stablecoins reaching $225 billion in February, reflecting a 63% year-over-year growth. This surge underscores the expanding use of stablecoins in everyday transactions and their potential to serve as the backbone of a new global financial ecosystem [1]. The rise of stablecoins, combined with the programmable capabilities of DeFi, is enabling financial services to operate without the need for traditional intermediaries such as banks, brokers, or government-regulated entities [1].

In this new paradigm, smart contracts—self-executing lines of code on decentralized blockchains—replace human intermediaries. These contracts ensure that transactions are transparent, immutable, and automatic, removing the need for trust in third parties. This marks a significant departure from traditional finance, where trust in institutions has historically been the foundation of monetary systems. Egorov emphasizes that the reliance on intermediaries has led to frequent failures, delays, and even corruption, necessitating legal frameworks to manage risk [1].

Money2 represents a philosophical shift in finance. By eliminating intermediaries, it reduces the potential for fraud, corruption, and bureaucratic inefficiencies. Financial operations such as lending, trading, and payments can now occur in a trustless environment, where rules are predefined and enforced by code [1]. This is particularly significant in cross-border transactions, where traditional finance often introduces delays, high fees, and compliance barriers.

Despite its promise, DeFi and the broader Money2 system face challenges to widespread adoption. One major issue is the lack of user-friendly interfaces. Most interactions with DeFi still occur through traditional web browsers, which were not designed for high-stakes financial transactions [1]. Additionally, the responsibility for managing private keys and securing digital assets lies entirely with the user, which introduces risks for those unfamiliar with the technology [1].

Another hurdle is the limited asset classes currently available in DeFi. While stablecoins provide a solid foundation, the full potential of Money2 can only be realized when a broader range of real-world assets—such as stocks, bonds, and real estate—are tokenized and integrated into onchain platforms [1]. This would create a unified financial ecosystem where all value-based transactions can occur seamlessly, without the need for intermediaries.

The transition to Money2 is not without resistance. The shift challenges the existing financial infrastructure and requires users to rethink their relationship with money. However, as blockchain technology continues to mature and more real-world assets become tokenized, the adoption of DeFi is expected to grow [1].

In conclusion, Money2 is not a distant future but a present reality. As stablecoins expand their role in global finance and DeFi systems become more robust, the financial world is moving toward a more transparent, efficient, and accessible model. The key to its success lies in overcoming usability barriers and expanding the range of assets available onchain, ensuring that Money2 can support the full spectrum of financial activities.

Source: [1] The rise of Money2: The next financial system has already begun (https://cointelegraph.com/news/money2-financial-system)