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Stablecoins have emerged as the dominant settlement layer for internet transactions, surpassing Visa and Mastercard in onchain volume.
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This shift reflects the growing adoption of stablecoins for fast, secure, and cost-effective digital payments across global markets.
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Noam Hurwitz, head of engineering at Alchemy, emphasizes that stablecoins are becoming the backbone of the tokenized financial system, powering major fintech platforms.
Stablecoins now lead onchain transaction volume, outpacing traditional card networks and reshaping internet payments with faster, cheaper, and global transfers.
Stablecoins Surpass Traditional Payment Networks in Onchain Volume
Recent data reveals that stablecoins have overtaken Visa and Mastercard in onchain transaction volume by approximately 7%, signaling a significant transformation in digital payment infrastructure. According to Noam Hurwitz, head of engineering at Alchemy, this milestone underscores stablecoins’ role as the default settlement layer for the internet. Their ability to facilitate near-instantaneous, low-cost transactions has attracted widespread adoption from both consumers and enterprises. Companies such as PayPal, Stripe, and Visa are integrating stablecoin technology to leverage blockchain infrastructure, enabling seamless cross-border payments and enhancing liquidity management. This trend highlights a broader shift towards tokenized money as the foundational element of the emerging digital economy.
Expanding Use Cases and Institutional Adoption of Stablecoins
Stablecoins are increasingly utilized for diverse financial applications beyond simple payments. Hurwitz points to their growing role in cross-border remittances, decentralized prediction markets like Polymarket, and as significant holders of US Treasury securities. For instance, Tether (USDT) reportedly holds over $113 billion in US debt, generating substantial profits while providing liquidity and stability to the ecosystem. This integration of stablecoins with traditional financial instruments exemplifies the convergence of legacy finance and blockchain innovation. However, challenges remain, particularly regarding the fragmented nature of blockchain networks and the need for robust enterprise-grade infrastructure. Institutions must carefully evaluate provider reliability and counterparty risks to ensure operational resilience in this evolving landscape.
Regulatory Advances and Technical Challenges Shape Stablecoin Growth
The regulatory environment for stablecoins is becoming more defined, with the recent passage of the US Senate’s GENIUS Act establishing federal guidelines that balance innovation with consumer protection. Hurwitz notes that clearer regulations benefit established financial players and encourage broader adoption. Despite regulatory progress, technical bottlenecks persist, especially in enhancing developer tools and improving user experience. Companies seek to abstract complex blockchain operations to deliver seamless interfaces, requiring sophisticated engineering expertise. Looking forward, Hurwitz anticipates widespread deployment of proprietary blockchains and layer 2 solutions by financial institutions to scale operations and enable crosschain interoperability. Such infrastructure advancements are expected to foster a more connected and efficient financial ecosystem centered on stablecoins.
Contrasting Perspectives: BIS Report Questions Stablecoins as Money
While industry leaders express optimism about stablecoins’ transformative potential, the Bank for International Settlements (BIS) offers a more cautious view. The BIS Annual Economic Report 2025 argues that stablecoins do not meet essential criteria of money, such as singleness, elasticity, and integrity. It characterizes stablecoins as “digital bearer instruments” akin to financial assets rather than true currency. This perspective highlights ongoing debates about the role and classification of stablecoins within the broader monetary system. Such scrutiny underscores the importance of continued regulatory clarity and technological innovation to address inherent limitations and risks.
Conclusion
Stablecoins have firmly established themselves as a critical component of the digital payment infrastructure, surpassing traditional card networks in onchain transaction volume and enabling faster, cheaper, and global transfers. Backed by growing institutional adoption and evolving regulatory frameworks, stablecoins are poised to underpin the tokenized financial system’s expansion. However, challenges related to blockchain fragmentation, technical scalability, and regulatory scrutiny remain pivotal. Continued innovation and collaboration between fintech firms, regulators, and blockchain developers will be essential to realize the full potential of stablecoins as a foundational element of the future financial ecosystem.
