Ethereum is emerging as banks’ preferred blockchain for stablecoin settlement as stablecoin supply surpasses $280B in 2025; financial institutions are integrating Ethereum-compatible rails to handle digital dollar flows securely and at scale.
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Stablecoin supply exceeded $280B after the U.S. Genius Act prompted institutional adoption.
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Ethereum processed roughly 62% of global stablecoin transfers in 2025, consolidating settlement activity.
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Institutional products show divergent flows: BlackRock’s ETH ETF at $17B versus VanEck’s Ether ETF at $284M.
Ethereum banks stablecoin: Ethereum leads stablecoin settlement as supply tops $280B — read how banks must adapt to accept digital dollars now.
VanEck CEO Jan van Eck says Ethereum will be banks’ top choice as stablecoin supply grows beyond $280B in 2025.
- Stablecoin supply topped $280B following the US Genius Act signed into law.
- Ethereum processed 62% of stablecoin transfers worldwide in 2025.
- BlackRock’s ETH ETF reached $17B while VanEck’s Ether ETF managed $284M.
Ethereum is gaining recognition as the leading blockchain for financial institutions preparing for stablecoin transactions. VanEck CEO Jan van Eck described Ethereum as the “Wall Street token,” predicting that banks must integrate it or similar technology to handle digital dollars and maintain competitiveness.
How is the Genius Act driving stablecoin growth and bank adoption?
The Genius Act, enacted in July 2025, created a federal framework for payment stablecoins and catalyzed institutional deployments. Stablecoin supply rose above $280 billion after the law’s passage, prompting banks to evaluate custody, settlement, and compliance for tokenized dollars.
Why are banks prioritizing Ethereum for stablecoin settlement?
Banks favor Ethereum for its broad developer ecosystem, smart-contract capabilities, and the Ethereum Virtual Machine (EVM) interoperability. Industry data shows Ethereum handled about 62% of stablecoin transfers in 2025, making it the dominant settlement layer for dollar-pegged tokens.
“Ethereum is the Wall Street token,” says @JanvanEck3. pic.twitter.com/9NAqjh8r0x
— VanEck (@vaneck_us) August 27, 2025
Speaking to Fox Business, Van Eck said, “Every bank and every financial services company has to have a way of taking in stablecoins.” He noted that customers will turn to other providers if their banks fail to accept digital dollar transactions.
A May survey from Fireblocks found that 90% of institutions are exploring stablecoins in operations. A separate industry commentary warned that banks that delay digital asset integration risk losing transactional volumes and client relationships.
How significant is Ethereum’s institutional traction in 2025?
Ethereum shows strong institutional traction: VanEck’s Ether ETF holds $284 million while BlackRock’s ETH ETF reached $17 billion, reflecting divergent scale but clear institutional interest. Ethereum recorded over $1.2 trillion in on-chain transactions this year, with a majority tied to stablecoins such as USDC and Tether.
DeFi metrics indicate that roughly 71% of decentralized finance assets remain active on Ethereum, reinforcing network depth. S&P Global and other market analysts note that EVM compatibility enables private networks and permissioned solutions, which appeals to regulated financial firms.
How can banks prepare to accept stablecoins on Ethereum?
Banks should take these prioritized steps:
- Assess compliance and custody: Implement custody models that meet AML, KYC, and regulatory requirements for tokenized dollars.
- Integrate settlement rails: Deploy Ethereum-compatible settlement infrastructure or partner with regulated ledger service providers.
- Test interoperability: Run pilot transactions using private/public bridges to ensure secure settlement and reconciliation.
- Educate clients: Provide clear client guidance on stablecoin usage, fees, and settlement timing.
Frequently Asked Questions
How much of stablecoin transfer volume occurs on Ethereum in 2025?
About 62% of stablecoin transfers in 2025 were processed on Ethereum, reflecting the network’s dominant role in tokenized dollar movement and on-chain settlement.
How should banks manage compliance for stablecoins?
Banks should implement rigorous AML/KYC controls, use regulated custodians or qualified custody models, and align internal policies with guidance from regulatory agencies and industry best practices.
Key Takeaways
- Policy spurred growth: The Genius Act accelerated stablecoin supply past $280B, pushing banks to act.
- Ethereum dominance: Ethereum processed the majority of stablecoin transfers and hosts extensive DeFi liquidity.
- Operational steps: Banks must adopt compliant custody, integrate EVM rails, and pilot settlement workflows.
Conclusion
As stablecoin supply surpasses $280 billion, Ethereum is positioning itself as the primary settlement layer for banks and institutional finance. Financial firms that invest in compliant custody, EVM-compatible infrastructure, and client education will be best placed to capture digital dollar flows. COINOTAG will continue tracking institutional adoption and regulatory developments.
