Long-Haul Carriers And The Collapse Of Cost

How deregulation rewired telecoms and why digital dollars could now do the same for finance

In the 1970s and early 1980s, a long-distance telephone call was a luxury. Consumers timed conversations carefully. Businesses scrutinised bills. National telecom monopolies controlled the infrastructure and priced international traffic at levels that bore little resemblance to the falling cost of transmission technology.

That model began to fracture with deregulation. In the United States, the 1984 breakup of AT&T opened the door to competition in long-haul services. In the UK and across Europe, liberalisation through the late 1980s and 1990s dismantled state monopolies and allowed private carriers to build rival fibre networks. Once competition was permitted, specialist operators laid cables across continents and under oceans at unprecedented scale.

The result was dramatic. The cost of transmitting voice traffic collapsed. What had once cost dollars per minute fell to cents, and then to fractions of a cent as internet protocol networks took over. Long-distance calling became a commodity. By the time internet-based voice services emerged, the economics of the old regime had already been undermined by deregulation and infrastructure competition.

A comparable shift may now be unfolding in money.

While public debate continues to focus on the volatility of bitcoin, a more structural change is taking place in digital payments. Stablecoins, cryptocurrencies pegged to assets such as the US dollar, are moving from a niche product used largely within crypto markets to a mainstream tool for online and cross-border transactions.

The scale is already significant. After excluding bots and inorganic flows, stablecoins moved more than $12tn in value last year. That places them within reach of established payment networks such as Visa, which processed around $17tn over the same period. Yet stablecoin transfers often settle within minutes and at markedly lower cost than traditional cross-border payments.

From monopoly rents to open rails

The telecoms revolution was not primarily about better handsets or improved customer service. It was about access to infrastructure. Once regulators allowed alternative carriers to build parallel long-haul networks, the pricing power of incumbents weakened. Competition drove down margins that had seemed entrenched for decades.

Payments today still resemble the old telecom model. Cross-border transactions often pass through multiple correspondent banks, clearing systems and foreign exchange intermediaries. Each step adds cost and delay. Fees of 2 to 5 per cent are common for international transfers, and settlement can take several days.

Stablecoins operate on a different architecture. They run on blockchain networks rather than proprietary banking rails. Funds move directly between digital wallets without requiring correspondent banking chains. Settlement is near instant and transparent on the ledger.

As with long-distance calls, users may care little about the underlying infrastructure once costs fall and reliability improves. Most consumers do not know which long-haul carrier routes their data across an ocean. In the same way, people making a payment online may not realise that a stablecoin sits behind the transaction. They will assume they are using dollars, and economically they are, since each token is backed one-for-one by reserves in cash or short-term government debt.

Money as programmable software

The telecom shift from analogue to digital networks enabled the rise of the internet and data services. Once voice became just another form of data, new applications followed. In finance, blockchain-based settlement introduces a similar flexibility.

Stablecoins are programmable. Payments can be automated, conditional or embedded directly into digital platforms. This opens the door to machine-to-machine transactions and real-time settlement between counterparties across borders. For global businesses, that means working capital tied up in payment delays can be released more quickly.

For now, most stablecoin flows remain concentrated in digital asset trading and crypto-native businesses. However, adoption is broadening. Payment processors are integrating stablecoin support at checkout. Financial institutions are experimenting with issuing their own dollar-backed tokens.

Stripe, for example, has incorporated stablecoins into its payment options, reducing transaction fees compared with traditional card processing. Asset managers such as Fidelity have explored tokenised products linked to stablecoin infrastructure. What began as a tool for crypto traders is gradually being embedded into conventional financial services.

Policy and credibility

Telecom deregulation required legislative change. Without regulatory reform, alternative carriers could not have built competing networks. The same principle applies in digital finance. Clear rules around reserves, disclosure and oversight are essential if stablecoins are to scale safely.

In the United States, lawmakers have begun to establish frameworks governing dollar-backed tokens and the blockchain networks that support them. Regulatory clarity reduces uncertainty for institutions considering participation. It also addresses concerns about reserve management and consumer protection.

Credibility is critical. In 2023, when a major stablecoin issuer briefly lost its dollar peg after reserves were trapped at Silicon Valley Bank, confidence wavered. The episode underscored the importance of robust reserve structures and transparent reporting. Just as overleveraged telecom operators collapsed during the fibre build-out of the late 1990s, not every participant in digital finance will survive.

Yet the broader trajectory appears set. Where telecom competition eroded the economics of long-distance calling, open blockchain rails may compress the margins embedded in cross-border payments.

Reinforcing dollar dominance

There is also a geopolitical dimension. Leading stablecoin issuers hold tens of billions of dollars in short-term US government debt to back their tokens. Collectively, they rank among the larger holders of Treasury bills. As issuance grows, so too does demand for dollar-denominated assets.

In a more fragmented global economy, that reinforces the international role of the dollar. Stablecoins effectively export digital dollars onto open networks, expanding their reach beyond the traditional banking system.

For businesses operating in markets with capital controls or fragile banking infrastructure, the appeal is practical rather than ideological. Companies have used stablecoins to move funds out of countries where access to dollars is restricted or where settlement systems are unreliable. Others use them to pay international contractors more quickly and at lower cost.

Infrastructure, not hype

The most important parallel with telecoms is structural. The collapse in long-distance call prices was not driven by consumer apps alone. It was the product of deregulation, infrastructure investment and open competition. Once those forces took hold, the cost base of communication shifted permanently.

Stablecoins represent a similar infrastructure play in finance. If regulatory frameworks continue to mature and institutional adoption broadens, they could become foundational rails for digital commerce. The visible change may be cheaper transfers. The deeper transformation would be the replacement of closed, high-margin payment corridors with interoperable networks that treat money as native to the internet.

Telecom deregulation did not eliminate incumbents overnight. It gradually eroded their pricing power and forced adaptation. Payments may follow the same pattern. Traditional banks and card networks are unlikely to disappear, but they may need to integrate or compete with open blockchain rails that operate at lower cost.

The collapse in long-distance call charges reshaped global communication. Stablecoins, if they continue on their present trajectory, could do something similar for global value transfer. The shift is less about speculation and more about infrastructure. As with fibre networks three decades ago, once the rails are laid and competition is permitted, economics tends to follow.