Stablecoins: Emerging Global Payment Rail and Financial Platform 

Stablecoins have emerged as a real world application in the cryptocurrency market, representing consistently more than half of transactions on the blockchain (Chainalysis). Their recent scale and traction hasn’t gone unnoticed: Stablecoins reached $250B in market cap in 2025 and have become a top 20 holder of US treasuries globally. At the current pace of growth, estimates predict that the broader stablecoin industry could create one of the largest sources of demand for US Treasuries in the coming years, potentially replacing China and Japan as the top holders by 2030 (ARK).

Last year, stablecoin transaction volumes surpassed those of Visa and Mastercard ($9T), reaching $27T. Adjusted for high frequency trading and artificial activity, stablecoin transaction volume is estimated at ~$4T. Still, the exponential growth reflects stablecoins’ increasing role in mainstream financial systems. 

Major institutions are increasingly embracing stablecoins and looking to establish their strategy in the space. New partnerships and announcements are being launched every week; Shopify rolled out USDC powered payments through Coinbase and Stripe;  Paypal launched PYUSD on Solana; JP Morgan plans to launch JPMD (a deposit token) on Base for its institutional clients; and other institutions like Bank of America, Société Générale, Revolut, Santander have all announced interest in launching their own stablecoins, providing legitimacy to the space. 

The global payments landscape is on the brink of a fundamental transformation driven by tailwinds in AI and stablecoins. What began as a niche cryptocurrency tool has evolved into a powerful force reshaping how money moves across borders. Below are opportunities we see for stablecoins as a new financial platform and ecosystem for digital financial services.

The Why Now for Stablecoins

Proven Economic Value

Stablecoins undeniable economic value as enabling programmatic money movement that is faster and cheaper than existing infrastructure.

• Better Accessibility – Stablecoins operate 24/7, 365 days per year, without the constraints of traditional banking hours or holidays. Unlike traditional payment systems that require extensive banking relationships and physical infrastructure, stablecoins need only an internet connection and digital wallet.
• Programmability  – Stablecoins offer programmability, enabling smart contracts, automated payments, and integration with decentralized applications. Stablecoins are uniquely programmable because they are built on blockchain platforms that support smart contracts—self-executing agreements with code-defined rules and conditions. This programmability allows stablecoins to go far beyond simple value transfer: they can automate complex financial workflows, such as conditional payments, escrow arrangements, recurring billing, and instant settlements triggered by real-world events.
• Faster Settlement Times  – While traditional cross-border payments can take 2-5 days to settle, stablecoins achieve finality in approximately 400 milliseconds on efficient blockchains like Solana. This near-instant settlement unlocks trapped capital almost immediately, providing significant liquidity improvements and reducing opportunity costs associated with waiting for funds.
• Dramatically Lower Costs - The cost advantages are perhaps most compelling. On high-throughput blockchains, average stablecoin payments cost less than a cent, compared to traditional payment processors that charge 2.9% plus additional fees.

Regulatory Momentum and Institutional Adoption

Recent years have seen a wave of new legislation—most notably the GENIUS Act, STABLE Act, and MiCA—ushering in an era of regulatory clarity for stablecoins. These frameworks, along with parallel efforts in Asia, the Middle East, and Latin America, are transforming stablecoins from a loosely governed innovation into a mainstream and trusted financial tool.

• The GENIUS Act –  Passed by the U.S. Senate in June 2025, the the Act allows both banks and non-banks to issue stablecoins, provided they meet strict compliance and reserve standards. The Act limits stablecoin issuance to licensed entities, mandates strict reserve requirements, and enforces monthly certification and capital standards. This regulatory clarity is expected to accelerate adoption by banks and corporates, making stablecoins a recognized part of the U.S. financial infrastructure. 
• The STABLE Act – The STABLE Act parallels the GENIUS Act by defining payment stablecoins, setting reserve, capital, and liquidity requirements, and prohibiting interest payments on stablecoins.
• The EU’s Markets in Crypto-Assets Regulation – The EU’s MiCA requires stablecoin issuers to maintain full reserves, undergo regular audits, and secure EU approval. Major exchanges are delisting non-compliant stablecoins, pushing issuers to meet MiCA standards. USDC and EURC are MiCA-compliant, while others like USDT face restrictions in the EU. 
• Emerging Markets: Countries like Singapore, Hong Kong, and the UK are also moving ahead with stablecoin rules. Singapore introduced clear requirements in 2023 for stablecoin reserves and redemption rights. Hong Kong now requires stablecoin issuers to be licensed, and the UK is working on new oversight under its financial services law. These steps aim to make stablecoin use safer and more transparent across different markets. Even across new emerging markets like Pakistan, Philippines, Japan, and South Korea, regulatory bodies are making moves towards regulatory clarity and framework on how cryptocurrencies and stablecoins should be treated. 

The Web 2.5 Application in Payments

Stablecoins have found their killer use case in cross border payments, disrupting SWIFT. The total cross-border payments market is estimated at $220+ billion in revenue in 2025, with projections to reach over $316 billion by 2030. In terms of transaction volume, cross-border payments are expected to reach $250 trillion in value by 2027, increasing at about 5% annually. 

SWIFT remains the backbone for most of these cross-border bank transactions, especially for business-to-business (B2B) and institutional payments. At its core, stablecoins are superior to SWIFT in many dimensions, providing faster, cheaper, and more accessible global payments. Stablecoins offer up to 90% cost reduction compared to traditional SWIFT transfers, with transaction fees for international wire transfers costing about ~$44 in USD versus transactions on Ethereum costing about $1 and less than a cent on Base. Traditional systems that have relied on correspondent banking networks, involving multiple intermediaries, each taking fees and adding delays. 

Stablecoins also significantly reduce the need for prefunding in payment and settlement systems by enabling instant, 24/7 transfers that settle directly between parties on blockchain networks. In traditional cross-border payments, banks and payment providers must maintain prefunded accounts (nostro/vostro accounts) in multiple countries to ensure liquidity for transactions, tying up capital and increasing operational costs. With stablecoins, funds can move in real time without relying on a chain of correspondent banks, eliminating the need to keep large sums locked up in various jurisdiction. An estimated $4T of capital is sitting idle in pre-funded accounts by institutions to ensure liquidity and enable same-day or near settlement, tying up funds that could otherwise be used for lending, investment, and growth. This "trapped capital" represents a significant hidden cost and operational inefficiency for the global payments industry that can be addressed through blockchain solutions by enabling real-time settlement. 

SWIFT vs Stablecoin Payments: Comprehensive Comparison:

Key Use Cases for Stablecoins 

• Hedge Against Inflation and Devaluation: Stablecoins are seeing rapid adoption in countries with high inflation. For example, in Argentina, Argentines use stablecoins pegged to the US dollar to protect their savings from rapid peso devaluation. Stablecoins now account for 61.8% of all crypto transactions in Argentina, far above the global average.
• Dollar Access Without Banking Barriers: Stablecoins offer digital access to US dollars, which are otherwise hard to obtain due to government restrictions and capital controls. This allows individuals and businesses to store value in a more stable currency without needing a foreign bank account.
• Instant, borderless payments:  Stablecoin transactions are faster and more efficient than traditional fiat or foreign currency transfers. This is especially valuable in countries with volatile currencies where values change significantly within hours, making traditional cross-border and local transactions costly and unpredictable. 
• Agentic payments: Stablecoins are poised to play a foundational role in the emerging world of agentic payments, where AI agents autonomously initiate and execute financial transactions on behalf of users or businesses. With stablecoins, AI agents can hold digital wallets, receive funds, and make payments programmatically via smart contracts, enabling scenarios like autonomous subscriptions, real-time supply chain purchases, or machine-to-machine micropayments. While we're in the early innings here, we're excited about companies that are building infrastructure with this goal in mind.

Consumer Use Cases

• Financial Inclusion: For people without access to traditional banking, stablecoins provide a way to store, send, and receive money using just a smartphone and internet connection. Consumers can access digital payments, savings, and even lending services without relying on local banks
• Fast, Low-Cost International Transfers/Remittances: Consumers use stablecoins to send money to family and friends abroad, avoiding high fees and slow processing times of traditional remittance services. This is especially valuable in countries with limited banking infrastructure or currency instability
• Purchasing Goods and Services: More merchants, both online and offline, now accept stablecoins for payments. Consumers can use stablecoins to pay for groceries, clothing, food delivery, and digital subscriptions. For example, in countries like Nigeria, the local currency Naira has depreciated significantly, and inflation has eroded consumer purchasing power. Alongside the lack of international card options for subscriptions, stablecoins can help bridge the patch for local payment and banking needs. 

B2B Use Cases

• Real time Settlements: Stablecoins are transforming real-time merchant settlement by enabling instant, 24/7 payouts that bypass the limitations of traditional banking rails. Payment service providers (PSPs) leveraging stablecoins can offer same-day or even instant payouts. Stablecoins can be used to serve B2B use cases by reducing the FX arbitrage in converting funds and reducing settlement delays.
• Faster Vendor Payments: Companies use stablecoins to pay suppliers and service providers globally, ensuring rapid settlement and reducing foreign exchange and transaction costs. With stablecoins as a sandwich, serving as the intermediary currency between two local fiat currencies, companies can bypass international wires and have transfers happen in minutes. 
• Treasury Management: Corporates and exporters use stablecoins to move funds instantly across bank accounts, optimizing across yield and liquidity needs programmatically. In addition, blockchain-based stablecoin payments offer transparent, auditable records of all transactions, aiding in compliance and reconciliation. Although stablecoins cannot legally provide yield, we expect to see more tokenized money market funds on-chain.
• International Payroll: Companies can pay employees and contractors worldwide in stablecoins (e.g., USDC, USDT) instantly, eliminating delays and high fees associated with international bank wire. Workers receive payments within seconds, with transparent deductions and net earnings, and can easily convert stablecoins to local currency if needed.

Market Opportunities and Business Models

The stablecoin ecosystem is developing across multiple layers, across: wallets and custody, fraud/compliance, issuers, liquidity providers, exchanges, orchestrators, tokenized MMFs, and applications (b2b and consumer). Each represents distinct business opportunities, with value accruing at all parts of the stack, particularly in novel infrastructure to enable stablecoins or around the application layer.

‍We ultimately see stablecoins being in the background as a technology layer, with the most successful companies the ones that can bring web2 businesses to adopt in their existing workflows.

Stablecoin Issuance Layer

In the not-too-distant future, there will be hundreds of stablecoin issuers globally. These issuers will span private firms, commercial banks, and even governments—multiple issuers for each currency.  Much like traditional banks, stablecoin issuers collect funds from users to invest into short term assets like US Treasuries. As of October, 2024, 10-year US Treasury bonds delivered just over 4%. This means that for every $100 billion in stablecoin issuance, an issuer can earn around $4 billion in revenue annually.

And while the majority of stablecoins are currently issued in US dollars, new entrants are offering stablecoins in other currencies like the EU or the UAE. Over time, we expect to see even more diversity in the stablecoin landscape, with local currencies becoming more common and governments or commercial banks stepping in as issuers. While the stablecoin market remains dominated by Tether & Circle (89% market share), stablecoin legislation in the U.S. is opening the door for new market entrants, including banks and enterprises, whose extensive distribution channels could drive competition and shift market dynamics. We expect to see more infrastructure built to help with stablecoin issuance or “stablecoins as a service.”

Examples: Brale, Paxos‍

FX and Liquidity Providers in Emerging Markets

Liquidity providers are a core component to ensuring the usability of stablecoins. FX providers in the stablecoin space facilitate the conversion between different currencies (both fiat and stablecoins), enabling seamless cross-border payments and currency swaps. Liquidity providers ensure there is enough volume and counterparties available so that these conversions can happen efficiently, at tight spreads, and with minimal slippage, for large volumes. Today, liquidity is typically sourced from regional CEX and OTC desks, but lacking in the long tail of markets. The lack of liquidity can cause challenges in stablecoin adoption today, as the costs of a customer making payments would be as expensive as using fiat aggregators or SWIFT. 

Solving this by aggregating liquidity across markets is a core infrastructure development needed to support mass adoption of stablecoins. Additionally, offboarding from stablecoin to fiat is still slow today, given reliance on local fiat systems. As banks continue to participate in the ecosystem alongside regulatory frameworks, we’re hopeful that market beyond the US/EU like in Africa, Latin America, Southeast Asia where stablecoins are most transformative, can benefit from improved liquidity and rates. 

Examples: OpenFX, StableSea, XFX

Orchestration and Infrastructure Layer

The connective tissue of multicurrency accounts, compliance, on/off ramps, and liquidity across countries, currencies, and blockchains are handled by orchestration providers that facilitate the money movement of stablecoins. These providers connect the local infrastructure needed to open bank accounts and send/receive money, enabling seamless integrations into local real-time payment rails as the last mile. As of early 2025, there are approximately 80 to over 100 countries with live local real-time payment (RTP) networks around the world. Orchestration platforms that can blend local RTP rails with blockchain payments in high-volume corridors will have a strategic advantage, alongside the necessary regulatory licenses and compliance framework.

Examples: Bridge, BVNK, Conduit Pay, Noah

Merchant and Application Layer

The merchant layer is positioned to aggregate other stack layers, providing additional value to end users while increasing margins. This includes everything from stablecoin-powered neobanks to global peer-to-peer payment applications that bring Venmo-like capabilities to international users. Early stablecoin adopters have included consumer remittance players to send money to family and friends abroad. 

On the B2B side, recent explorations of stablecoin applications include Modern Treasury’s partnership with Brale, allowing businesses to send and receive payments via fiat or stablecoins. The company's platform provides payment alternatives through APIs and a no-code console, including currency conversion, B2B transactions, and back-office automation. As we’re just starting to see stablecoins power the backend of any payment or operations, we believe many of the most innovative use cases of stablecoins will be discovered by new consumer or B2B fintech apps. We’re most excited about bridging the gap to traditional web2 clients - companies serving CFOs and treasury teams that can integrate seamlessly into their workflows, making stablecoins a hidden and seamless enabler. 

Examples: DolarApp, Sling Money, Cedar Money, Felix Pago

The Path Forward: Infrastructure and Innovation

The stablecoin revolution is supported by continuous infrastructure improvements that make transactions cheaper and faster. Years of investment in blockchain technology, improved wallets, bridges, ramps, and market makers are creating an increasingly sophisticated ecosystem.

As Stripe’s Patrick Collinson quoted, stablecoins represent room-temperature superconductors for financial services" as they offer near-frictionless, efficient, and global payment capabilities. This infrastructure enables new use cases through permissionless composability, where entrepreneurs can build entirely new payment experiences and services without legacy intermediaries.

As the stablecoin market approaches $400 billion in capitalization and processes trillions in annual volume, we're witnessing the early stages of a fundamental restructuring of global finance. The companies and entrepreneurs who successfully navigate this transformation are building compliant, user-friendly solutions that harness stablecoins' unique advantages. 

If you’re a founder building at the intersection of AI,  new applications with stablecoins, and new payments infrastructure, we’d love to hear from you – send a note to connie@montageventures.com!