The Stablecoin Surge and the Native Token Crisis: The Future of Blockchain Security

※ This article is published as a preliminary version and will be updated to the final Daily Crypto Times (DCT) format in two days.

Peter Schiff’s Claim That Tether Will Overtake ETH and BTC – And the Future of Blockchain Fee Structures

— A DCT perspective on the roles of native tokens and stablecoins, and the long-term sustainability of blockchain ecosystems

In 2026, three powerful trends are converging: the global expansion of stablecoin-based payments, the acceleration of real-world asset (RWA) tokenization, and the explosive growth of on-chain liquidity. Amid these shifts, Ethereum is quietly becoming a core infrastructure layer for global finance (Ethereum’s Quiet Takeover: How Stablecoins and Tokenized Assets Are Rewriting Global Finance).

But a critical question remains. If Ethereum’s success does not translate into ETH’s success, the ecosystem will be forced to live with a structural disconnect. (Why Is Ethereum Growing in the AI Era While ETH Fails to Rise?) So how can we design a structural framework where network success is directly reflected in ETH’s price and economic value?

This question has resurfaced recently as Peter Schiff claimed that Tether (USDT) will eventually surpass both Ethereum and Bitcoin in market capitalization. The explosive growth of stablecoins is more than a simple ranking story; it raises a deeper question about what roles native tokens and stablecoins should each play within a blockchain ecosystem.

The current market caps are roughly as follows:

• Tether (USDT): $187 billion
• Ethereum (ETH): $215 billion
• Bitcoin (BTC): $1.26 trillion

In other words, Tether needs only about $28 billion more to overtake ETH and become the second-largest crypto asset by market cap. Schiff emphasizes that Tether’s supply has continued to grow even during recent market corrections. He points to rising demand from trading, payments, and DeFi, and notes that Tether reportedly holds over 130 tons of gold (around $20 billion) as part of its reserves, arguing that “confidence in stablecoins is increasing.”

Market reactions, however, are divided. Supporters argue that stablecoins have strong real-world utility and naturally see higher demand in volatile markets, while skeptics continue to question Tether’s transparency and stability, asking a more fundamental question: “Should stablecoins even be counted as part of total crypto market capitalization?”

This debate goes beyond market cap rankings and leads us to a structural question: what roles should native tokens and stablecoins each play in a blockchain ecosystem?

1) Native tokens vs. stablecoins: Their roles are fundamentally different

There are two core types of assets in a blockchain ecosystem.

① Native tokens: Security and consensus assets

Native tokens such as BTC on Bitcoin, ETH on Ethereum, and SOL on Solana are the assets that secure and operate the network. Miners, validators, and full node operators are compensated in these tokens.

In other words, the value of the native token is directly tied to the security of the network. If the native token’s economic value collapses, the incentives for participants who secure the network weaken as well.

② Stablecoins: Payment and circulation assets

Stablecoins like USDT and USDC are designed for price stability and practical usability. They act as “digital dollars” in trading, payments, remittances, and DeFi, and from a user’s perspective, they function like low-volatility on-chain cash.

In short, native tokens are responsible for security, consensus, and incentive alignment, while stablecoins are responsible for payments, circulation, and real-world usage. They are often grouped together as “crypto,” but their purposes and functions are clearly distinct.

2) When sending stablecoins, what should fees be paid in?

When you transfer stablecoins, there are essentially two ways to pay transaction fees.

① Paying fees in stablecoins

Example: Sending USDT and paying the fee in USDT as well

Pros

• Users do not need to hold the chain’s native token separately.
• From a UX perspective, it is extremely convenient—having only stablecoins in the wallet is enough.

Cons

• Validators and miners are compensated in stablecoins instead of the native token.
• The economic demand for the native token weakens, eroding security incentives over time.
• The security model can drift away from on-chain consensus and toward reliance on the creditworthiness and reserves of the stablecoin issuer.

In the end, this model offers high usability but can conflict with network security and decentralization.

② Paying fees in the native token

Example: On Ethereum, sending USDT but paying the fee in ETH

Pros

• Validators and miners are rewarded in the native token, preserving security incentives.
• There is continuous demand for the native token, tightly coupling token economics with network security.
• The center of security remains with on-chain consensus and network participants, not with a centralized issuer.

Cons

• Users must hold at least some amount of the native token, which slightly worsens UX.
• It becomes harder to offer a “stablecoin-only” onboarding experience for new users.

This model is less convenient, but far healthier for long-term ecosystem sustainability and security.

3) The desirable fee structure for a sustainable blockchain ecosystem

From a DCT perspective, the conclusion is relatively clear.

The most sustainable model is one where stablecoin transaction fees are paid in the blockchain’s native token.

There are three main reasons for this.

① Native token demand must be preserved to keep the network secure

When fees are paid in the native token, validators, miners, and node operators are rewarded in that token. This ensures ongoing incentives for network participation and, over the long term, supports the number of nodes, hash rate, and validator set size.

② Stablecoins are structurally better suited to focus on payments and circulation

If stablecoins also become the primary fee asset, the role of the native token gradually shrinks, and the security model becomes more sensitive to the issuer’s credit and reserves than to on-chain consensus. This introduces a structural risk where a supposedly decentralized network tilts toward dependence on a centralized issuer.

③ A native-token-centric structure is necessary for ecosystem-wide sustainability

Blockchains grow in the order of “security → trust → usage.” If security is compromised, the payment rails, DeFi layers, and RWA tokenization built on top will all be at risk.

No matter how large stablecoins become, the ultimate responsibility for network security lies with the native token and its consensus mechanism. Fee structures should therefore be designed to reinforce this security foundation, not to erode it for short-term UX gains.

Conclusion: Stablecoin growth does not replace the role of native tokens

Peter Schiff’s claim that “Tether will overtake ETH and BTC in market cap” is an interesting signal of how fast stablecoin usage is growing. But the growth of stablecoins and the long-term sustainability of blockchain networks are not the same issue.

To summarize:

• Native tokens are assets that secure the network and underpin consensus.
• Stablecoins are assets that power payments, circulation, and real-world usage.
• When fees are paid in the native token, the ecosystem’s long-term stability is best preserved.

No matter how dominant stablecoins become, they cannot fully replace the role of native tokens. A balanced division of labor—“native-token-based security + stablecoin-based circulation”—is a far healthier direction for blockchain ecosystems aiming to become the backbone of digital finance.

Younchan Jung
Researcher exploring structural shifts in AI, blockchain, and the on‑chain economy.

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