Stablecoins – digital assets pegged to stable fiat currencies such as the US dollar – have evolved dramatically since their early use in crypto trading. Originally designed to simplify the exchange of cryptocurrencies, they have rapidly found product-market fit in the infrastructure layer for global payments, remittances and cross-border business to business (B2B) transactions.
To the average consumer, payments seem simple – just a tap to pay. But behind this seamless experience lies a complex web of intermediaries: point-of-sale systems, acquiring banks, issuing banks, payment processors, FX conversion layers and card networks, with each adding cost, latency and complexity. Stablecoins, a tokenised currency on public blockchains, can cut through this friction. We can now send dollars across the globe in under one second and for less than one cent. This is not just an incremental improvement – it is a leap forward, especially when including instant settlement and transparency. Stablecoins are no longer just a crypto trading tool; they are solving deep inefficiencies embedded in the architecture of global finance.
While volatility has long defined crypto trading and decentralised exchange volumes, stablecoins tell a different story. Their activity has shown consistent, upward momentum, steadily growing through periods of market turbulence. As the chart below illustrates, this resilience highlights their expanding role far beyond crypto trading, binding their place in real-world payment applications.
DEX trading volume ($bn) versus monthly active Stablecoin addresses (mn)
Source: Artemis Terminal, The Block, Bernstein analysis, June 2025
Even more remarkable is the sheer volume processed via stablecoins. Today, they handle nearly 20 times PayPal’s transaction volume, with last year’s annual transfer volume surpassing the combined volume of Visa and Mastercard by 7.7% – and rapidly closing in on the scale of the Automated Clearing House (ACH) network.
In only a decade, stablecoins have become the 19th largest holders of US Treasuries, rivalling sovereign nations. Citi recently projected that by 2030, total stablecoin assets could hit $3.7 trillion, placing them at the very top of the international leaderboard for US Treasury holdings.
Top international holdings of US treasuries (billions)
Note: US Department of the Treasury, as of March 2025; Source: FRED, DefiLlama, Visa on-chain analytics, Company filings, Bloomberg, Bernstein analysis, June 2025.
Use cases
With increased efficiency, improved transparency and enhanced resilience, stablecoins are solving problems now, with use cases multiplying across industries. On the retail front, margin sensitive businesses are the biggest beneficiaries. Think coffee shops, newsagents and locally run restaurants who can add 2% directly to the bottom line – potentially doubling profits. But the deepest disruption currently is hitting global remittance and B2B cross border settlements, where stablecoins are available 24/7, 365 days a year with near instant settlement.
Stripe, the financial infrastructure platform for businesses, completed its acquisition of Bridge earlier in the year. Bridge’s most obvious use case is cross-border money flows, in particular to countries that have unstable currencies or are underbanked. For example, one firm which hires around the world pays contractors in stablecoins, allowing them to receive payment immediately in US dollars in countries with unstable currencies.
Shopify recently partnered with Coinbase and Stripe to bring frictionless, secure stablecoin payments to merchants globally using their existing payment and order fulfilment flows with no integrations or new gateways required. Onchain stablecoin payments also go beyond transferring value – they are programmable, allowing automated triggering steps in complex financial flows like multi-stage payment commitments.
Visa and Mastercard, the backbone of the payments world, have also embraced stablecoins. Visa is actively integrating stablecoins directly into its settlement infrastructure, with Mastercard also enabling global acceptance and payments with stablecoins, allowing consumers and merchants to use stablecoins like cash at over 150 million merchant locations worldwide.
‘Stablecoin Summer’ also saw the much anticipated Circle IPO, which soared over 450% last month. As the second-largest issuer of US dollar stablecoins (with around a 24% market share compared to around 60% for Tether), Circle’s rise reignited interest in Coinbase, which enjoys a 54% reserve income split thanks to a preferential USDC distribution agreement.
USDC: Circle’s revenue sharing model (Q1 2025)
USDC supply distribution (average, %)
Source: Bernstein Research, 31 March 2025.
Reserve income distribution (%)
Source: Bernstein Research, 31 March 2025.
Regulation
Regulation is beginning to catch up with the stablecoin boom. On 17 June, the US Senate passed the GENIUS Act with a vote of 68–30, marking the first comprehensive regulatory framework for the issuance and supervision of payment stablecoins. By mandating full reserve backing, third-party audits and strict compliance with anti-money laundering laws, the legislation aims to protect consumers and rebuild trust in the crypto and blockchain space – especially after several high-profile failures in recent years.
A key provision within the GENIUS Act* prohibits non-financial public companies from issuing stablecoins, therefore setting the stage for tech platforms, e-commerce firms and digital marketplaces to partner with regulated US financial institutions instead. *(On 18 July, President Trump signed the GENIUS Act into Law).
While, the CLARITY Act is beginning to draw clearer definitions and jurisdictional boundaries for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Together, these legislative moves mark a decisive pivot from regulatory ambiguity to structured oversight – signalling the wider crypto economy entering a new era of legitimacy and to re-shore crypto companies back to the US.
What’s next?
Blockchain and tokenisation – once viewed as a direct threat to the US dollar, are now emerging as its most powerful enabler. With over 99% of stablecoin supply denominated in US dollars, the technology is reinforcing this currency’s dominance in today’s digital economy. In fact, stablecoin supply is at an all-time high, with roughly 1.1% of the total US dollar supply now tokenised.
Excitingly, Coinbase recently launched a new standard for internet-native payments – where sending stablecoins becomes as effortless as loading a webpage. By enabling instant payments over HTTP, this will unlock seamless transaction capabilities for APIs, apps and even AI agents, paving the way for an automated internet economy.
Meanwhile, tokenised real-world assets (RWAs) are gathering momentum. With over $20 billion already onchain and projections of a $2 trillion market base case by 2030, tokenisation is reimagining traditional finance. Tokenisations of RWAs transforms physical assets into programmable digital tokens that retain economic utility – offering benefits such as lending, fractional ownership, faster settlement and lower transaction costs. With adoption accelerating across major institutions like Visa, Mastercard and Stripe, stablecoins are poised to revolutionise cross-border money movement – breaking apart an industry long plagued by cost, inefficiency and fragmentation.
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