Stablecoins: The Quiet Revolution in Global Finance

Archive edition · Market data and company circumstances reflect 23 August 2025, when this newsletter was sent.

The Growth Story of Stablecoins in 2025

Money has always evolved alongside technology. From the first coins to paper notes, from credit cards to mobile wallets, each leap reflected society’s pursuit of faster, safer, and more convenient ways to transact. Now, the next chapter is unfolding through stablecoins; digital currencies pegged to traditional assets such as the U.S. dollar.

Unlike volatile cryptocurrencies, stablecoins are designed for stability. They offer the trust of fiat money and the efficiency of blockchain, enabling transactions that are cheaper, faster, and globally accessible.

Once seen as tools for crypto traders, stablecoins are increasingly recognized as a core building block of financial infrastructure. Regulators have provided a legal framework, banks are experimenting with blockchain settlement, and fintech firms are embedding stablecoins into consumer and business payments.

With a market already surpassing $270 billion, stablecoins are no longer fringe instruments. They are gradually becoming part of the financial plumbing that underlies payments, remittances, capital markets, and treasury functions.

Stablecoins in the Financial System: Why Now?

Stablecoins have grown ~40% since 2021. (Source: Goldman Sachs)

Stablecoins are not new, but the environment has shifted. Several forces are converging to bring them into the mainstream:

• Crypto Integration: Stablecoins act as the settlement layer for exchanges, decentralized finance, and tokenized assets. Their role in the digital asset ecosystem makes them indispensable for liquidity and trading.
• Dollar Demand Abroad: In countries such as Argentina and Turkey, where currencies are volatile, stablecoins offer digital access to U.S. dollars. This grassroots adoption strengthens demand globally.
• Regulatory Clarity: In 2025, the U.S. passed the GENIUS Act, which set clear rules for stablecoins. It requires issuers to keep real dollars in reserve, undergo audits, and get licenses—making them safer and more trustworthy. This benefits regulated coins like USDC, while limiting less transparent ones like Tether.
• Efficiency Gains for Institutions: Banks and corporates are drawn to stablecoins for real-time settlement, instant reconciliation, and reduced counterparty risk. Traditional rails such as wire transfers, international transfer networks, and paper checks look increasingly outdated by comparison.
• Tokenization of Assets: With equities, bonds, and mortgages moving onto blockchain platforms, stablecoins are becoming the medium of exchange that powers digital capital markets.

Payments, Remittances & Corporate Finance

The payments industry is the most immediate arena for stablecoin adoption. With over $240 trillion in annual transaction flows, even incremental migration to blockchain-based settlement could be transformative.

Replacing credit cards is unlikely in the near term. Visa (V) and Mastercard (MA) have entrenched acceptance, fraud protection, and rewards ecosystems that stablecoins cannot replicate. Instead, these incumbents are more likely to integrate stablecoins into existing rails. Investors should view them as enablers, not losers.

1.2.2 Cross-Border Transfers

Migrant remittances of nearly $900 billion annually remain expensive and slow. Stablecoins can cut fees and settlement times. PayPal (PYPL) and Remitly (RELY) are positioned to capitalize on this trend.

Remitly offers a pure-play digital remittance story, while PayPal can deploy stablecoins at scale across its platform. Investors should watch incumbents like Western Union carefully, as they risk disruption if adoption accelerates.

1.2.3 B2B and Corporate Payments

Businesses are weighed down by inefficient settlement processes. Stablecoins enable instant payments, smart-contract automation, and real-time treasury management. This may be less visible to consumers but represents a significant revenue opportunity for fintechs and banks alike.

Taken together, these use cases point toward integration rather than disintermediation. For investors, this means the largest incumbents in payments and fintech may benefit as they embed stablecoin functionality into their platforms.

Stablecoins in Big Finance

While payments dominate headlines, stablecoins’ greatest impact may come in the institutional arena.

• Banking Models: Stablecoins pose a risk to deposits, but forward-thinking banks are already experimenting with ways to harness them. JPMorgan (JPM) has launched deposit tokens and blockchain settlement platforms, ensuring that corporate clients can transact digitally within the banking perimeter.
• Custody Services: Safeguarding reserves is a natural extension for custodian banks. Bank of New York Mellon (BK), already a leader in digital custody, is well-positioned to manage both stablecoin reserves and tokenized assets. For investors, this represents a growth opportunity layered on top of core custody economics.
• Capital Markets Infrastructure: Stablecoins are being tested as collateral, margin, and settlement instruments. This reduces capital lock-up and accelerates trading cycles. As tokenization expands, stablecoins will become the de facto exchange currency. Goldman Sachs (GS) is actively building infrastructure in this space, reinforcing its role as an innovator in capital markets.
• Retail Brokerages and Exchanges: Robinhood (HOOD) and Coinbase (COIN) are integrating stablecoins into their offerings. Robinhood is expanding into tokenized securities, while Coinbase has a strategic partnership with Circle, the issuer of USDC. Both stand to benefit from stablecoin-driven growth in trading, custody, and settlement.

Challenges Ahead

Despite the promise, adoption faces hurdles that investors must weigh carefully:

• Regulation: The GENIUS Act is a step forward, but global rules remain fragmented. Issuers must still navigate Anti-Money Laundering compliance, sanctions enforcement, and jurisdictional differences.
• Network Effects: Payments succeed only when both sides of the transaction adopt. Stablecoin ecosystems will need widespread consumer trust and merchant acceptance before scaling.
• Trust and Insurance: Unlike bank deposits, stablecoins are not FDIC-insured. Investor confidence depends on issuers proving their reserves and maintaining transparency.
• Credit and Value-Added Services: Stablecoins act like cash, but they lack credit lines, fraud protection, or rewards. These gaps limit their ability to fully replace credit cards and bank accounts.

Positioning for the Shift

Stablecoins are not a passing fad, they are a structural innovation in global finance. Their adoption will not come through sudden disruption of consumer payments but through gradual embedding into the financial system: first in B2B and cross-border transactions, then in capital markets, and ultimately in consumer-facing applications.

For investors, the winners will be companies that build on these rails:

Stablecoins are best understood as new plumbing for the financial system. The revolution will be quiet, incremental, and lasting. Investors who position now will be aligned with one of the most significant shifts in financial infrastructure of the decade.

• Payments Networks (V, MA): Integration ensures long-term resilience.
• Remittances (PYPL, RELY): Clear cost advantages make them natural adopters.
• Custody Banks (BK): Positioned as trusted reserve managers.
• Exchanges and Brokerages (HOOD, COIN): Direct beneficiaries of tokenization.
• Global Banks (JPM, GS): Innovating in settlement and infrastructure.

Archive note

This article preserves the analysis in our weekly newsletter sent 23 August 2025. Market prices, forecasts and company circumstances reflect the time of publication and may have changed.

This material is general information, not personal financial advice or a recommendation to trade. Investing and trading involve risk, including loss of capital.