The stablecoin industry has reached a tipping point. After the June IPO of stablecoin provider Circle saw the stock surge as much as 600% – the largest first day pop for a billion-dollar U.S. IPO in 30 years – it's clear that the technology is moving from the margins to the mainstream.
Serving as a programmable "layer on top of money,” stablecoins can be thought of as the bridge between the fiat and crypto ecosystems. To maintain a stable price, stablecoin issuers aim to hold reserves that are equal in value to the tokens in circulation. For cash-collateralized stablecoins, the most common type, new stablecoin tokens are issued when users deposit fiat currency; the tokens are destroyed when users redeem them, aligning supply with demand.
Some analysts have referred to Circle’s IPO as stablecoins’ “ChatGPT moment,” with projections pointing to total supply reaching $1.4 trillion by 2030. But while the technology dramatically accelerates settlement times and expands financial access, disrupting entrenched payment systems may prove more difficult than many expect.
Can Stablecoins Disrupt Traditional Payments?
One of stablecoins’ key advantages is their ability to bypass traditional intermediaries. Rather than routing payments through banks, card networks, or correspondent systems, they enable direct wallet-to-wallet transfers on the blockchain. However, despite this technical edge, breaking into mainstream consumer payments remains a steep climb.
Credit, which makes up roughly half of all payment volume for major payment players, offers more than just the ability to spend. It’s bundled with underwriting, fraud protection, and reward programs – services that are tightly woven into the banking system. Ultimately, consumers have grown accustomed to these incentive structures, and replacing them with a decentralized alternative would require a major shift in consumer behavior and incentives.
Debit isn’t much more vulnerable. Thanks to the 2012 Durbin Amendment, interchange fees on regulated debit cards – those issued by banks with over $10 billion in assets – are capped at around 21 cents plus 0.05% per transaction. That covers roughly two-thirds of the U.S. debit market. For major merchants like Walmart, that pricing is already near rock bottom. Even if stablecoins could offer slightly lower fees, the margin improvement is negligible and wouldn’t be enough to justify a costly shift in infrastructure or behavior.
The Areas of Greatest Impact
So, what sectors will stablecoins disrupt?
While the technology may face barriers in everyday consumer payments, their potential in business-to-business payments (B2B) and international money movement is far more immediate. These areas are less sensitive to consumer habits and more focused on efficiency and cost, making them more open to new infrastructure.
Take a cross-border transaction between a Canadian lumber producer and a U.S. buyer. Today, the payment would typically move through the SWIFT network, involving multiple intermediaries, FX conversion fees, and settlement delays. With stablecoins, that same payment could be executed near-instantly and with significantly lower overhead.
The same logic applies to remittances. Foreign workers sending money home often face steep fees that can exceed 6% per transaction. Stablecoins, in contrast, offer fast, peer-to-peer transfers with fees under 1%. In corridors like the U.S.–Mexico remittance lane, stablecoins already account for an estimated 5–10% of flows, with expectations that this could rise to 30% within the next three to five years.
In emerging markets, stablecoins are also serving as a form of financial defense. In countries like Argentina, Venezuela, Turkey, and Nigeria – where inflation is rampant and trust in local currencies is low – dollar-backed stablecoins have become a digital safe haven. In 2023, for example, many Argentines turned to stablecoins to preserve purchasing power when inflation skyrocketed over 200%.
Looking to the Future
After years of operating in a regulatory gray zone, regulatory frameworks are emerging worldwide that could serve as major enablers of broader adoption.
In the U.S., the GENIUS Act – advanced in June – marks the first comprehensive federal stablecoin framework, setting standards for reserves, audits, and consumer protection. Stablecoin legislation in the EU, Singapore, Japan, and Hong Kong has also gone into effect in recent years, pushing stablecoins firmly into the domain of regulated finance.
While regulation enables broader adoption – especially by banks and corporations – it also limits some of the decentralization and anonymity that early users valued. For those outside the banking system, new rules may be a barrier, not a benefit.
Still, clearer frameworks are unlocking institutional momentum. JPMorgan has expanded its JPM Coin initiative, and other banks are expected to follow, seeking to serve as stablecoin on-ramps.
Over time, stablecoins and legacy payment networks may converge. Card networks typically take around 10 points per transaction as an assessment fee, while the bulk of interchange fees flow to issuing banks. If stablecoins can bypass the banking layer while still leveraging existing networks as a last-mile link to consumers, disruption could evolve into collaboration.
A Dual Bet on the Future of Money
Zooming out, stablecoins and Bitcoin reflect two opposing but simultaneous bets on the global financial system. Bitcoin is, in many ways, a hedge against the U.S. dollar. Its correlation with global money supply is well documented, and the price tends to move higher the more central banks print.
Stablecoins, on the other hand, are a bet on the dollar’s continued dominance. Every new stablecoin issued typically corresponds to demand for U.S. treasuries or cash equivalents. In effect, stablecoin growth channels more capital into the dollar system and reinforces the dollar’s role as the global reserve currency.
Both trends are accelerating in parallel and, while they may seem contradictory, they underscore a larger point: global demand for financial alternatives is rising. As adoption grows, stablecoins are emerging not just as a crypto tool, but as a new layer of financial infrastructure – reinforcing the dollar’s role while redefining how it moves.