After considering launching a stablecoin of its own, Meta is opting to leverage established digital asset infrastructure to enable stablecoin payouts.

Through a partnership with Stripe, Meta will now offer some creators the option to receive payouts in Circle’s USDC. These payments can be received through most crypto wallets, including MetaMask, Phantom, and Binance, across the Solana or Polygon blockchains.

“This is big news—they’re turning stablecoins into a payout mechanism at massive scale,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Creators can now get paid directly into wallets on various blockchains and bypass cross-border delays and fees. This is a big deal because Meta and Facebook have such a massive client base, and USDC and Stripe matter here because they offer enterprise-grade, compliant, and low-risk options.”

Shifting Toward Infrastructure

Meta’s shift away from issuing a proprietary stablecoin is also notable. Years ago, the company explored a branded stablecoin initiative called Libra, later renamed Diem. However, the project faced regulatory and funding challenges and was subsequently shelved.

Following the passage of the GENIUS Act last year, a growing number of companies have announced plans to issue stablecoins—the latest being Western Union. After Meta unveiled its renewed interest in stablecoin-related payments, there was speculation that the company—whose platforms include Instagram, Facebook, and WhatsApp and collectively reach roughly 3 billion users—might revive plans for its own token.

All About Distribution

Launching a propriety stablecoin could dramatically reduce the fees Meta pays to third-party issuers and intermediaries, but remaining on the sidelines of issuance may come with its own costs.

By adding stablecoin support, even through partner infrastructure, Meta could further embed itself in the surging social commerce space, while also positioning itself as a potential competitor in financial services over time.

For example, WhatsApp is already widely used for cross-border payments and remittances. Introducing stablecoin functionality could materially reduce transaction and currency conversion fees for users.

“All of this is about distribution,” Hugentobler said. “In a sense, they’re testing whether stablecoins can power global payroll across its platform with billions of users. If they can prove this out, it will put pressure on banks and traditional payment providers in the areas it is executing on: cross-border payments, payouts, remittances, and even FX.”

The post Meta Brings Stablecoin Payouts to a Massive Global Ecosystem appeared first on PaymentsJournal.

WEBINAR

Stablecoins and the Reinvention of Remittance

May 12, 2026

1:00 pm EDT

[contact-form-7]

What Does the Future of Remittance Look Like in a Stablecoin World?

Stablecoins are fundamentally changing how remittance companies compete—not just by making transfers faster and cheaper, but by enabling an entirely new business model.

Join us on May 12 as Ran “Goldi” Goldshtein, SVP of Payments and Network at Fireblocks, Luke Tuttle, Chief Product and Technology Officer at MoneyGram, and James Wester, Director of Cryptocurrency at Javelin Strategy & Research, explore how leading remittance providers are evolving beyond transaction processing into full-fledged financial platforms—capturing value when money arrives, sits, earns yield, and moves again.

In this webinar, you will gain insights into:

• How wallet infrastructure transforms remittance companies from transaction processors into financial hubs
• How wallet-based remittance boosts customers retention
• The technical capabilities required to compete in this new landscape
• How providers capture value between transactions with stablecoins

Our Presenters

Ran “Goldi” Goldshtein

SVP of Payments and Network

Luke Tuttle

Chief Product and Technology Officer

James Wester

Co-Head of Payments

The post Stablecoins and the Reinvention of Remittance appeared first on PaymentsJournal.

When Stripe launched the Tempo blockchain, its main objective was to bring significant everyday payments volume to stablecoins—a goal it is now one step closer to achieving following a deal with DoorDash.

For a blockchain that only brought its mainnet online last month, DoorDash’s participation is a signal of early traction. Tempo has also established partnerships with companies like Shopify, OpenAI, Visa, and Mastercard, all of which have the potential to introduce stablecoins to end consumers at meaningful scale.

“This is how stablecoins go mainstream. Not through retail payments but through payouts and treasury flows,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “This is less about crypto and more about fixing pain points like faster access to earnings, lower fees, and 24/7 settlement.”

A Global Challenge

These issues are part of why the gig and creator economies have become attractive to financial services firms. Over a quarter of the U.S. workforce participates in the gig economy in some capacity, yet many workers still report delayed, inconsistent, or incomplete payouts.

This is a global challenge, and one reason Visa launched a debit card for UK TikTok creators designed to help users receive virtual gifts that can be converted into income.

Second-Order Effects

Stablecoins may be better suited to many payout use cases, as they enable near real-time settlement that is secure and low-cost. Even more importantly, they avoid many of the frictions associated with cross-border payments, such as delays, transfer fees, and currency conversion costs.

These advantages have fueled demand for stablecoin-based payouts in gig economies. For example, in the Philippines, many freelancers work with foreign clients, and cross-border payment complexity often results in settlement delays of several days and processing fees as high as 10%.

While stablecoins offer a compelling solution to these challenges, gig economy payouts may ultimately represent just the tip of the iceberg.

“Thinking in second-order effects, once platforms normalize paying workers in stablecoins, I don’t think it automatically means those stablecoin balances are going back to banks in all cases,” Hugentobler said. “Instead, they get used for remittances, bill pay, or even embedded financial services. To be clear, I don’t think this will replace banks, but if more companies continue to leverage stablecoins like this, it will shift where and how money moves.”

The post DoorDash to Offer Gig Workers Stablecoin Payouts appeared first on PaymentsJournal.

International wires have long been the default for B2B payments—an entrenched system that works, but few would describe as optimal, given multi-day settlement timelines and high fees. But as stablecoins gain traction in cross-border transactions, businesses are starting to ask a more fundamental question: Can we replace wires altogether?

In a PaymentsJournal Podcast, Avinash Chidambaram, Founder and CEO of Cybrid, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed what would need to happen for stablecoins to become the default mechanism for B2B payments. What’s exciting as well is the possibility of even more use cases across payments, treasury, and remittance. “There are all sorts of things you can do better that you don’t consider to be a problem,” Wester said. “But maybe with new technology, we can do things that you didn’t even know were possible.”

Structural Inefficiency

Wires work well enough—they move money from sender to recipient, which meets the core need. What most enterprises don’t see, though, is the complex web of systems and intermediaries behind these transactions; they simply build their processes around bank-based payments.

Over time, layers of intermediaries have made these systems deeply entrenched and difficult to replace. In the past, this made sense. Moving money across borders and oceans was a treacherous game, and paying a little extra for trust and security was a value-add rather than a painful cost. Now, however, times (and money movement) have changed. Organizations have access to tools that enable simpler, more streamlined alternatives with built-in trust.

“The inefficiency isn’t just technological, it’s structural,” said Chidambaram. “Whether it’s correspondent banks, clearing houses, processors, [or] compliance, these experiences that are happening in the background between banks cost both complexity and time, and are hugely inefficient.”

Looking for Improvement in B2B

Alongside new technology came new expectations of transparency; companies want to track their payment from the second it leaves their account to the moment it lands in a recipient account. However, this is simply not possible with wire transfers. Stablecoins, on the other hand, offer complete traceability—and enterprises are taking note. They can verify, often in near real time, that funds have been received. This visibility is driving growing interest as businesses see clear operational benefits.

“Most enterprises are focused on their core business and then they say, ‘OK, well, can I improve some of my operations and finance as a separate thing?’” said Chidambaram. “Now a customer can go into our platform and say I want to make a payment to this invoice and upload that invoice. We can automatically pull the funds from a customer’s account to fund the payment transaction, convert that to stablecoins automatically and then send stablecoin to the recipient’s wallet.”

“That can improve B2B payments from two contexts,” he continued. “First, it’s just faster. Secondly, you can see that it’s settled—that [your recipient] actually received the funds.”

Improving the User Experience

For the longest time, a major barrier to broader digital asset adoption, including stablecoins,  has been poor user experience—complex interfaces and high stakes for errors.

Firms like Cybrid are beginning to address these challenges across retail, commercial, and enterprise payments. The experience now goes beyond accessing a wallet to include greater visibility into transaction status and fees.

The secret sauce is in programmability. Stablecoins by nature can be programmed—a payments team member can set up rules or triggers, which then guide how payments operate. For instance, payment terms. For instance, if you have to pay a supplier every month, you can create a programmable rule that ensures money lands on time, avoiding late fees or penalties and ensuring business continuity. But the use cases go beyond pre-determined rules and can become dynamic as well.“We’re starting to see people adopting ERP tools that have intelligence built into them,” said Chidambaram, “Where they can say, ‘Hey, your inventory is running low. Or you need to make these payments. Here are all the payables that you have.’ And over time, we’re finding that people are actually wanting to wait as late as possible to make those payments.”

Keeping Existing Workflows

Accounts payables and receivable teams already operate within established workflows in fiat currencies like the US dollar or Euro—for payroll, invoicing, and more—and are unlikely to overhaul them entirely. The good news, though, is that stablecoins operate in the background. When you make a payment, the recipient receives their local currency automatically (or stablecoins if they choose, but it’s not required). All the while, the business sending those payments benefits from speed, cost efficiency, and transparency.

“You’re going to have an organization that says: ‘This is how I do payroll for my local employees, but I need to do this other thing for my contractors overseas and this other thing for my suppliers,’” said Chidambaram. “Some of them might have taken only wires then, but are now accepting stablecoins. They have the ability to pick which rail makes the most sense to solve the problem.”

These benefits are especially relevant given the growing complexity of payroll, including irregular schedules and cross-border payments. Stablecoins could play a key role here. For example, enabling early wage access models that allow workers or suppliers to receive funds ahead of traditional pay cycles.

“You get paid every two weeks because, in our brains, that’s how you get paid,” said Wester. “That goes back to direct deposit, which goes back to you had to have a check, and that goes back to all sorts of things that go into the processes. Same thing with AR/AP and so many of our payment processes at the corporate level. Now we can rethink a lot of those things.”

Something Better

For the foreseeable future, stablecoins will coexist with traditional payment rails. Both are necessary to support the trillions of dollars moving through global systems today. But as enterprises, suppliers, and payers grow more comfortable, a larger share of that volume is likely to shift toward stablecoins.

“Many people think digital assets and stablecoins are a solution in search of a problem,” Wester said. “I’ll say, well, you know, what you’re doing now is slow, costly, and inefficient, with layers that you can’t see. You don’t think of this as a problem, but maybe that’s because you didn’t know there was anything better.”

A key remaining hurdle is integration. Stablecoin payments are not yet embedded in most enterprise software platforms, where traditional methods like wires are still the default. But as vendors evolve and enable easier integration, stablecoins will become more accessible—unlocking even broader use cases.

“Banks, PSPS, enterprises, large and small, every one of them have been thinking about stablecoins,” said Chidambaram. “How do I go in my take advantage of this? What are the capabilities I need? Then that starts to unlock people’s minds: What else can I solve with this new payment rail?”

The post What Would it Take for Stablecoins to Replace Wire Transfers in B2B Payments? appeared first on PaymentsJournal.

Real-time payments have reshaped entire economies in markets like Brazil and India, but they are not just a domestic rail for faster account-to-account transfers.

India’s UPI, for example, has expanded beyond its borders through integrations with systems in other regions and continues to add new features at a rapid pace.

The promise of real-time payments once drove Mastercard to acquire most of European fintech Nets’ payments services for $3.2 billion, seven years ago. The deal brought Nets’ real-time payment infrastructure, bill pay, and electronic invoicing segments under Mastercard’s umbrella. At the time, the payments giant sought to move beyond card payments and expand its network.

Now, however, Mastercard is reportedly consulting investment bankers on a plan to divest the unit. According to the Financial Times, the sale is targeting private equity firms and is expected to fetch significantly less than Mastercard originally paid.

Long-Term Strategy Questions

Taken on its own, this could appear as a retreat from a deal that fell short on revenue growth. But coming just days after Mastercard’s blockbuster acquisition of stablecoin payments infrastructure firm BVNK, it raises questions about the company’s long-term strategy.

The BVNK acquisition, valued at $1.8 billion, represents the largest digital assets deal to date. It comes after nearly every major player in financial services has made a splashy stablecoin investment.

Mastercard stated that the objective of the deal is to reach markets not currently served by its card network, including cross-border remittances, business payments, and payouts in the creator and gig economies.

The Shape of Payments to Come

While stablecoins are a powerful solution in these applications—especially for freelancers and contractors—real-time payments can also be highly effective.

Indeed, the Clearing House reported that its RTP Network continues to set all-time highs in payments value and volume. While large commercial settlements account for many transactions, much of the recent growth is driven by use cases like earned wage access disbursements and gig economy payouts.

Given the growing entrenchment of real-time payments, Mastercard’s pivot from Nets to BVNK is unlikely to redefine the payments landscape. Instead, both payment types are set to thrive in an increasingly crowded market.

The post Could Mastercard’s Instant Payments Divestiture Signal a Strategy Shift? appeared first on PaymentsJournal.

Stablecoin is not synonymous with a digital U.S. dollar, despite the dominance of USD-backed assets in a rapidly expanding market.

A stablecoin’s value can be pegged to range of assets—from commodities like gold to other cryptocurrencies—but these variants are often used more as investment vehicles than as everyday payment mechanisms. Likewise, many leading USD-backed stablecoins function as yield-generating instruments or as tools for large-value settlements.

That said, there is growing evidence that the stablecoins gaining the most traction in real-world use cases are those backed by fiat currencies other than the U.S. dollar. According to a report by Visa and Dune, the non-USD stablecoin market reached $1.1 billion in February, tripling in just over three years.

More telling is that roughly half of these domestic currency-denominated stablecoins are held in institutional and individual wallets, while about a quarter sits on centralized exchanges. This distribution suggests active usage, likely in applications such as cross-border payments, remittances, and B2B settlement.

Stablecoin vs. CBDC

Within this segment, Circle’s EURC accounts for over 90% of transfer volume. That a euro-pegged stablecoin leads is unsurprising: the euro is used across 27 countries, and inefficiencies in cross-border payments have long been a lingering pain point that European policymakers are working to address.

However, these leaders have shown a preference for a central bank digital currency over privately issued stablecoins. After years of discussion, the digital euro is entering a pilot phase and is slated to launch in the latter part of next year.

One of the key motivations behind the CBDC push is the dominance of USD-backed stablecoins. Still, it remains unclear how a digital euro would coexist with euro-denominated stablecoins already in circulation.

Tough Sledding

Outside Europe, adoption of non-USD stablecoins has been more limited. Brazilian real-backed stablecoins represent the next-largest share of the segment, but they trail far behind euro-based counterparts.

Even so, new entrants continue to emerge, such as South Africa’s ZAR Universal (ZARU), a rand-pegged digital asset. These products, however, face the daunting task of unseating USD-backed stablecoins, which still account for the lion’s share of a global market valued at more than $310 billion.

The post Stablecoins Are Moving Beyond the Dollar appeared first on PaymentsJournal.

Over a quarter of the U.S. workforce now participates in the gig economy in some capacity. As these platforms have grown, payouts have become a central operational concern: timely, reliable payments are essential to attracting and retaining freelancers and gig workers.

The Philippines is experiencing a similar shift, with nearly a quarter of employed workers engaged in gig work. Unlike their U.S. counterparts, however, many Filipino freelancers work on projects for foreign clients.

That dynamic has created a pain point. Cross-border payouts are often slowed by intermediary banks, weighed down by transfer fees, and subject to foreign exchange costs. Payments can take days to settle and may shrink by as much as 10% by the time they reach the recipient.

These frictions are pushing many gig workers in the Philippines toward stablecoin payouts. Stablecoins like USDC and USDT can settle in seconds, whether the transaction is domestic or international. Since they are pegged to the U.S. dollar, recipients can avoid immediate currency conversions, and blockchain-based transfers bypass many of the fees embedded in the traditional correspondent bank model.

Ramping Up the Comfort Level

While some companies have hesitated to add stablecoins to their payment repertoire due to regulatory uncertainty, those concerns have begun to ease. The implementation of the EU’s Markets in Crypto-Assets (MiCA) framework and the proposed GENIUS Act in the U.S. have helped ramp up global comfort with regulated stablecoin usage.

User expectations are another powerful driver. As consumer payments move closer to real-time settlement, that expectation is bleeding into commercial payments and platform payouts.

Unlocking the Digital Economy

Stablecoins are well positioned to meet these demands across a range of use cases. Payouts in particular—whether marketplaces paying sellers, gaming platforms issuing winnings, or YouTube paying its creators—represents a strong fit.

In countries such as the Philippines, where a growing share of the workforce is reliant on cross-border income, stablecoins are about more than speed and lower fees. For many workers, they offer a direct on-ramp to the global digital economy.

The post Stablecoins Power Philippines’ Thriving Gig Economy appeared first on PaymentsJournal.

TikTok Shop has been at the forefront of the social commerce surge, where influencers’ live streams and product videos link directly to checkout. As a result, social platforms have become one of the fast-growing segments in e-commerce.

A key driver of this growth is frictionless payments. Platforms that let users buy directly see higher engagement and conversions, and a stablecoin could make transactions faster, cheaper, and more seamless—connecting social media with financial services in real time.

Recognizing this potential, Meta, which reaches roughly 3 billion users across Instagram, Facebook, and WhatsApp, is reviving its plans to introduce a stablecoin within its ecosystem. Such a launch could deepen the company’s role in social commerce while also positioning it as a major player in financial services.

“WhatsApp is essentially the communication layer for a large portion of cross-border payments, commerce, and even remittances—so stablecoins could become the settlement layer and significantly reduce fees for users,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “My guess would be that the UX mostly hides the crypto rails, so it’s all handled on the backend. The simpler the experience for the user, the better.”

“This will reduce payout delays, bank transfer and other intermediary frictions, and even FX complexities,” he said. “Meta will have the decision to pass savings to merchants, keep savings to add to margins and increase revenue, and/or potentially subsidize early on to drive adoption.”

Shifting the Strategy

All these benefits are reasons why Meta has long pursued a stablecoin. The tech giant first introduced its Libra stablecoin, later rebranded as Diem, in 2019. However, regulatory challenges and high costs forced Meta to shelve the project.

Following last year’s passage of the GENIUS Act, Meta revisited the idea, but with a new approach. Instead of issuing a proprietary stablecoin itself, the company released a request for proposals (RFP) to third-party firms, seeking a partner to handle stablecoin issuance and wallet operations.

“Meta is going to be one of many notable players entering the space,” Hugentobler said. “There’s no evidence that they are going to issue their own stablecoin this time, but it wouldn’t surprise me if they did at some point down the road. For now, I think their focus is distribution, wallet integration, and user experience—and they will let the regulated issuers focus on what they do best.”

Becoming the Default

One leading contender is Bridge, the stablecoin infrastructure firm recently acquired by Stripe. Bridge has quickly established itself as a major crypto player and even recently gained approval as a national trust bank.

Regardless of which partner wins the bid, Meta is targeting a launch later this year—a signal that digital payments are central to its social commerce strategy. its stablecoin by the latter part of the year. If successful, the move could strengthen the link between social media and fintech, bringing Meta closer to the super app model, and expand the mainstream adoption of digital assets.

“This is a big deal,” Hugentobler said. “With Meta making stablecoins a native payment inside these applications, the networks are big enough to push stablecoins and crypto rails for payments into the mainstream, and to become the default.”

The post Meta Seeks Third-Party Firm for Stablecoin and Wallet Ambitions appeared first on PaymentsJournal.

For years, compliance and security concerns kept many financial institutions on the sidelines of the digital asset market. Now, that hesitation is giving way to cautious optimism—and, increasingly, active participation.

That shift is due in part to the passage of the GENIUS Act in the U.S., which established clear ground rules for stablecoin issuers. Since then, leading digital assets firms like Circle, Ripple, and Paxos have received conditional approval from the U.S. Office of the Comptroller of the Currency to establish national trust banks.

These charters allow the companies to issue stablecoins, hold digital assets, and manage reserves—all under the purview of federal regulators. The latest company to receive this approval is stablecoin infrastructure provider Bridge, which was acquired by Stripe two years ago in what was one of the largest crypto-related acquisitions at the time.

Expanding Use Cases

Like Stripe, many of the world’s leading financial services firms have made significant investments in crypto ventures in recent years. Now, these companies are expanding their programs into new use cases. For example, YouTube recently added functionality enabling creators to receive payouts in PayPal’s PYUSD stablecoin.

While additional consumer-facing applications are on the horizon, including a Sony-backed stablecoin targeting the U.S. gaming market, the most dynamic use cases for digital assets may emerge in commercial payments.

The traditional B2B payments cycle has long revolved around extended settlement timelines designed for paper checks, making treasury management unnecessarily complex. Many of these processes remain manual and time-consuming, increasing the risks of errors and fraud.

Revitalizing the Landscape

These challenges are magnified in cross-border payments. International transactions often rely on chains of intermediary banks, resulting in delays, higher fees, and limited visibility into payment status.

By contrast, stablecoins have the potential to revitalize both domestic and cross-border commercial payments. Transactions can settle near-instantly on blockchain networks, with greater visibility for all parties and potentially reduced costs. In addition to operational efficiencies, organizations can optimize working capital by retaining cash longer and initiating payments at the last possible moment.

As more stablecoin companies, including Bridge, operate under U.S. regulatory oversight, businesses are likely to grow more confident in integrating digital assets into their operations. That momentum could further accelerate growth  the already red-hot stablecoin market, which now exceeds $310 billion.

The post Stripe’s Crypto Segment Bridge Gets Greenlit as National Trust Bank appeared first on PaymentsJournal.

Paying a supplier is a fundamental function for businesses, yet it’s often encumbered by a complex billing cycle. When the supplier is in a different jurisdiction, this complexity skyrockets, forcing organizations to navigate foreign exchange rates, bank intermediaries, local regulations, and opaque fees—all with limited visibility into where a payment is and when it will settle.

By contrast, stablecoin payments are immediate, transparent, and less expensive. Designed to maintain a consistent value and typically backed by U.S. dollar reserves, they combine the reliability enterprises expect from traditional currencies with the speed and transparency of digital payment rails.

In a recent PaymentsJournal podcast, Avinash Chidambaram, Founder and CEO of Cybrid, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, discussed B2B use cases for stablecoins and the future of this dynamic digital asset in enterprise payments.

No Longer the Wild West

One of the most important factors driving stablecoin adoption is increasing global regulatory clarity. In the United States, the GENIUS Act governing stablecoins marked a milestone moment, dramatically shifting how banks, B2B payments platforms, and remittance providers view digital assets.

Although regulatory approaches vary by region, the underlying value proposition of stablecoins remains unchanged. Their reserve-backed structure provides organizations with the green light to move forward.

“Globally, you’re starting to see this shift towards enabling businesses and retail customers to start using stablecoins as back-end infrastructure at the very least,” Chidambaram said. “The fact that it’s a stable crypto asset gives CFOs, treasury departments, and even regular retail customers a clear understanding of what the value of that token is.”

“For example, it’s basically a U.S. dollar when I’m sending a stablecoin overseas and it’s being converted into a Hong Kong dollar,” he said. “Now, you’re accepting the benefits of the blockchain and tokenization systems to affect very meaningful use cases and experiences for your customers.”

The combination of these benefits and improving regulatory clarity has rapidly shifted many financial institutions’ attitudes toward digital assets. Early adopters who recognized the potential of stablecoins and anticipated a more amenable regulatory environment are now prepared to reap the rewards of their foresight.

“There was a perception for a period of time that the larger field of crypto was kind of like the wild, wild west,” Wester said. “Yet, there have been companies over the last many years that saw the value of crypto, digital assets, stablecoins, blockchain, and tokenized assets—and were begging for regulatory clarity. They were saying that there’s an efficiency gain here; there are cost reductions.”

“What’s so surprising is how willing and able companies in the space were to say, ‘Now that there’s clarity, we’re happy to look at compliance; we are happy to look at regulation; we are happy to look at governance—because we were always willing to do that,” he said.

Unlocking the 24/7 Cycle

As more organizations consider stablecoins, the promise of the technology has become clear—especially in B2B payments. Built around 30-, 60-, and 90-day payment cycles largely designed to accommodate paper checks, traditional B2B payment infrastructure is ripe for disruption, and stablecoins are proving to be a game changer.

In cross-border payments, businesses have often been limited to sending suppliers a wire confirmation as proof of payment, despite being unable to guarantee when the transaction would actually settle.

These challenges are mitigated with stablecoins.

“Now, I can say: ‘From my blockchain wallet, I’ve sent you a payment that happens to run over stablecoins, and I can see on the blockchain that you received it,’” Chidambaram said. “By the way, both parties on either side of that transaction have been KYB checked—we know who they are. There are much lower transaction costs because there’s not a bunch of folks in the middle who are taking their pound of flesh, and lower FX costs.”

“The other thing is, you can now source stablecoins 24/7, 365,” he said. “It all runs on a blockchain. Minting stablecoins doesn’t stop at 5 p.m. If you are buying goods from another jurisdiction, you don’t have to worry about, ‘When does that bank open up over there? Did they receive the funds or not?’ You can start to operate your business on the 24/7 cycle.”

In addition, organizations can attach data to stablecoin payments, improving reconciliation, accuracy, and confidence in supply orders. This, in turn, delivers meaningful operational benefits across procurement and supply chain functions.

Stablecoins also enable more effective treasury management. Organizations can retain cash within the business for longer, paying for goods and services precisely when needed.

“I heard a statement a couple of months ago, and it drove home the benefit of this type of granularity on being able to send money, and that was: ‘Real-time payments don’t matter because I want to pay somebody tomorrow and know that they’re getting paid immediately tomorrow,’” Wester said. “I know that they don’t need to get paid for 30 days. I want to pay them on day 29 and hold my money as long as I possibly can.”

“It flipped the way that I was thinking about it because when you think about real-time payments, it’s, ‘I need to pay somebody immediately,’” he said. “No, I need the ability to pay them immediately, but I want to be able to have that flexibility and manage my money. If it’s 30 days, I want to be able to send it as late as I possibly can.”

The Programmable Value

This programmability of stablecoins is one of their most impactful features. It enables businesses to automate many payment processes that are currently manual and time-consuming, while also unlocking more sophisticated use cases.

“Some of our customers use us to onboard to investment products,” Chidambaram said. “Take a real estate inverse investment product for commercial real estate for example. You can raise money quickly in the sense that you have an investment opportunity, people can fund that investment using stablecoins from anywhere around the world using a Reg A, Reg D, or Reg S kind of structure.”

“There are also disbursements,” he said. “You can programmatically fund the investment and once the investment has been completed, you can programmatically fund the disbursements. You think about all the higher value stuff that we usually need a lot of people and operations to do, but now you’re able to program that into the token.”

While there are significant use cases for stablecoins, many organizations have been hesitant to adopt digital assets. However, companies don’t need to understand the intricacies of blockchain, cryptocurrencies, or tokenization to benefit from stablecoins. Payment providers have developed back-end infrastructure that manages every aspect of stablecoin transactions, allowing businesses to leverage the technology without added complexity.

“I’ve laughed a couple of times in the past when people talk about stablecoin payments versus other payments as though there is going to be some sort of a qualitative difference from the experience standpoint,” Wester said.

“Your company doesn’t have to be an expert in ERP solutions, you just use the ERP solution,” he said. “The same thing is going to apply once we start moving over to stablecoins. They’re going to start recognizing the benefit of faster, cheaper, programmatic money movement. It’s not going to require anything other than that.”

The Lumpy Path to Adoption

Although momentum behind stablecoins is building, broader adoption in payments still faces obstacles.

“I would love to say it’s going to be a straight line towards adoption, but I do think that it’s going to be a lumpy evolution,” Wester said. “There are still some things that need development, such as the user experience part and where stablecoins and digital assets fit within ERP solutions, banking solutions, and middle- and back-office solutions.”

“I would love to say it’s a rocket ship to the moon and in a year’s time, everybody will be adopting it, but it will take some time,” he said. “The next year is going to be interesting in terms of where we start seeing real development.”

While there may not be sweeping adoption this year, stablecoins are likely to continue gaining traction. As a result, businesses should begin strategizing how to incorporate stablecoins—alongside an ever-increasing number of payment types—into their operations.

One of the most effective ways to leverage stablecoins is through a payments orchestration platform, which routes transactions through the optimal payment type.

“As more people start to support their flavor of stablecoins, you’re going to start seeing organizations using platforms like us to say, ‘Here’s how I want to orchestrate a payment,’ and more of the value of cross-border payments will move onto stablecoins,” Chidambaram said.

“We’re feeling very excited about the opportunity over the next few years, as more companies understand what a stablecoin is and how it’s helping them meet an objective faster, cheaper, and with more control over their treasury,” he said. “More companies are going to start to embed infrastructure like ours to provide those back-office improvements in experience to their end customers.”

The post Stablecoins and the Future of B2B Payments: Faster, Cheaper, Better appeared first on PaymentsJournal.

PhotonPay, a leading stablecoin-centric global digital financial infrastructure, today announced the successful completion of its tens of millions of USD Series B funding round.

This round was led by IDG Capital, with participation from Hillhouse Investment, Enlight Capital, Lightspeed Faction, and Shoplazza. Blacksheep Technology acted as the exclusive financial advisor for this round. The funds will enable PhotonPay to accelerate the expansion of its next-generation stablecoin financial rails, hire key talent, and broaden its global regulatory footprint.

As a core enabler of the global digital economy, PhotonPay is dedicated to empowering businesses with a secure, compliant, and frictionless financial operating system. Operating from 11 global hubs with a team of over 300 experts, PhotonPay powers a vast and diverse ecosystem—supporting both established and emerging markets across core industries like e-commerce & marketplaces, B2B trade, OTAs, and logistics, while deeply penetrating high-growth digital frontiers such as AI, SaaS, and Digital Entertainment globally.

Built on a rapidly scaling stablecoin-native clearing infrastructure, PhotonPay now processes over $30 billion in annualized payment volume. The platform helps tens of thousands of businesses reduce global fund transfer costs by more than 75% and boost operational efficiency by 60%, paving the way for seamless global expansion. 

Building a Next-Generation Financial Infrastructure Future

“Global payments are experiencing a once-in-a-generation structural revolution: moving from slow, siloed legacy interbank networks to a unified, digital-asset-native system built for real-time liquidity and intelligent treasury,” said Lewison Chen, Founder & CEO of PhotonPay.

“We fundamentally believe the future payment stack will be stablecoin-ready, and we are building it now. Stablecoins are not just a new settlement tool, they are the foundation for moving value globally at the speed of photon—zero friction, zero latency. This Series B is not a validation of what we’ve done; it’s the fuel that accelerates our mission to connect the global digital economy and defines our role in re-architecting the next decade of global payments infrastructure.”

The newly raised capital will strategically propel our vision of powering the next generation of global finance, focused on four key pillars:

1.Fortifying Global Financial Infrastructure 

Leveraging its strong partnerships with leading financial institutions such as J.P. Morgan, Circle, Standard Chartered Bank, DBS Bank, and Mastercard, PhotonPay will further deepen its direct connection to global payment networks. This move aims to enhance capability in account issuance, acquiring, and FX, delivering bank-grade stability while ensuring frictionless, real-time global settlements.

2.Broadening the Product Ecosystem

PhotonPay is poised to launch its second wave of growth, centered on “Enterprise Value-Added Services.” In addition to cementing its leading position in embedded finance, the company will expand its end-to-end “Collect, Manage, and Pay” ecosystem. By 2026, PhotonPay plans to roll out flexible treasury solutions designed to generate yield on idles funds, alongside agile credit facilities, empowering clients to maximize liquidity and capital efficiency.

3.Driving an Intelligent Architectural Evolution

The company will spearhead a comprehensive upgrade of its core technology stack:

• Risk Intelligence: Shifting from passive defense to “predictive precision,” PhotonPay will deploy proprietary AI models to redefine AML and anti-fraud risk management, ensuring bank-grade compliance at fintech speed.
• Next-Gen Settlement: Integrating stablecoin payment rails to modernize global clearing. By bridging traditional banking infrastructure with stablecoin liquidity, PhotonPay enables 24/7 instant settlement and automated payment workflows. This hybrid approach overcomes the limitations of legacy banking windows, significantly reducing transaction friction and capital costs for global businesses.

4.Expanding Global Compliance & Local Footprint

Prioritizing development in the U.S. and key emerging markets, PhotonPay will accelerate its acquisition of regulatory licenses to expand its competitive advantages. Simultaneously, the company will scale its local operations teams, building a highly adaptive infrastructure that combines global regulatory rigor with deep local market expertise.

Commenting on the investment, IDG Capital noted: “Global commerce is undergoing a fundamental shift, and PhotonPay is building the financial operating system for this new era. What stands out most is the team’s ability to abstract the complexity of global compliance and liquidity into a seamless, intelligent infrastructure. By tackling payments at the infrastructure layer, PhotonPay is re-architecting how global payment systems operate through AI-driven intelligence and stablecoin-native capabilities. IDG Capital is excited to back a category-defining company that’s setting the standard for the future of digital finance.” 

Anthony Zhu, Founding Partner of Enlight Capital, added: “Innovative technologies such as AI and blockchain will reshape the global financial system. What we are backing are not incremental products or services built on top of traditional finance, but fundamentally new technological paradigms and solutions that rearchitect core financial processes – making finance more accessible, inclusive, and transparent on a global scale. We see tremendous potential in PhotonPay to become a foundational financial services provider in a future digitalized and AI-native world. We also see in its founder, Lewison, the defining qualities of a next-generation fintech entrepreneur: a technology-driven mindset, a proactive approach to change, a strong can-do attitude in the face of competition, and a truly global vision.”

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As more financial institutions expand into digital assets, UK banking giant Barclays has invested in newly launched Ubyx, a platform that facilitates the transfer of stablecoins and tokenized deposits.

Although the size of the investment was not disclosed, Barclays said it marked the bank’s first investment in a stablecoin company. However, it was not the first vote of confidence for Ubyx, which has already attracted backing from Coinbase and Galaxy Digital, among others.

Barclays said its objective is to bring digital assets under the financial services industry’s regulatory umbrella.

“This is an interesting move on Barclays’ end,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “This is more of a payment network infrastructure play rather than a ‘bet on crypto.’ If stablecoins and tokenized deposits are going to function as regulated digital/tokenized cash, redemption needs to become predictable and issuer agnostic.”

Moving Incrementally

Institutional investments in digital assets has accelerated following the proposal and passage of the GENIUS Act in the U.S., which regulates stablecoins. Previously, many financial institutions were reluctant to pursue stablecoin strategies due to compliance concerns.

Now, nearly all leading U.S. banks are moving forward with stablecoin plans, albeit incrementally. For example, JPMorgan Chase recently launched JPMCoin, though the stablecoin is primarily designed for transfers among institutional clients.

Similarly, Citi said it’s exploring a stablecoin but considers tokenized deposits as more promising for its use cases.

Redeeming at Par

Although traditional banks have taken a more measured approach to stablecoins, many other organizations are forging ahead. This includes companies as diverse as Sony, which plans to launch a stablecoin for its gaming ecosystem, and buy now, pay later leader Klarna.

Early discussions around stablecoins focused on Circle and Tether, and on which stablecoin would ultimately prevail. However, it is becoming clear that the stablecoin market is likely to be highly fragmented.

This fragmentation is what makes a platform like Ubyx particularly intriguing to investors, as it could potentially serve as a central hub connecting these various offerings.

“Anyone can issue a token,” Hugentobler said. “The winners here are those that can redeem them at par at any time within the banking ecosystem. They won’t be treated as cash unless this aspect of redeemability is 100% reliable. At the end of the day, FIs will require interoperability between tokenized deposits and stablecoins. Barclays understands this, and that’s why they allocated.”

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Most of the buzz around stablecoins has focused on payment acceptance, but payouts are the lifeblood of many businesses. In a major step for the industry, YouTube will now allow creators to receive their payouts in PayPal’s PYUSD stablecoin.

Stablecoins are well-suited to meet the growing demand for faster, more efficient payouts because they provide real-time, secure transactions. Some of the most compelling use cases include marketplaces paying sellers, gig platforms paying workers, online gaming platforms issuing winnings, and insurance companies delivering claim payments.

As the largest video sharing platform in the world, YouTube’s adoption of stablecoin payouts marks an important milestone for digital assets. The option to receive PYUSD payouts is now live for U.S.-based creators earning revenue from the platform.

A Particular Draw

While YouTube’s PYUSD payouts may be limited to stateside creators for now, the strongest benefits of stablecoin payouts will be felt by companies with global reach. International payouts are often costly and slow for the same reasons cross-border payments are challenging today.

For merchants that need to send payouts across many currencies and regions, stablecoins offer an attractive alternative. Funds can be sent directly to a creator’s wallet, a major advantage for gig workers and creators who often face long wait times for traditional payouts. Faster access to earnings can in turn drive loyalty and engagement in the highly competitive gig economy.

Stablecoin payouts are also especially compelling for workers and creators in regions with volatile local currencies, or for underbanked and unbanked individuals who may not have access to traditional financial services but do have access to a digital wallet.

An Established Relationship

With PayPal’s wallet, payout recipients can earn yield on their stablecoins. To drive adoption of PYUSD, PayPal recently introduced a 3.7% interest rate for users who hold the stablecoin in their PayPal or Venmo accounts.

Since launching the stablecoin two years ago, PayPal has made many moves to entrench its stablecoin in a market dominated by Circle and Tether. One of PYUSD’s key differentiators is its tight integration with PayPal’s broader ecosystem. That connection also helped pave the way for YouTube’s decision to enable stablecoin payouts, as the two companies already had an established working relationship.

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Although financial institutions are more engaged with digital assets than ever, many remain cautious due to compliance and privacy obligations. In response to the growing need for privacy-focused options, Circle is introducing a new iteration of its signature stablecoin.

USDCx will be issued on the Aleo network, a blockchain designed with privacy in mind. The goal is to support confidential transactions using zero-knowledge proofs.

“The fact that most public blockchains are totally transparent means that anyone can scrape addresses and trace flows, track and cluster wallets, and essentially infer business relationships,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research.

“In the case of Aleo, they don’t mint a new unbacked token,” he said. “It uses USDC held in a contract controlled by Circle as reserves. This is a big step since the tokens can be swapped for one another without the use of a bridge, which eliminates the additional risks associated with that.”

Purpose-Built Solutions

One of the most powerful features of blockchain technology is the transparency it provides. This can be a game changer for use cases like cross-border payments, where the path of a payment is often difficult to trace.

Despite the benefits stablecoins offer, financial institutions require more stringent guardrails. While a public blockchain like Solana could still be the answer, more purpose-built financial services blockchains have emerged.

For example, Google recently unveiled its neutral, global blockchain for the industry, which is designed to an agnostic solution. Additionally, Stripe and Coinbase are among many players that have launched private blockchain alternatives.

A Mainstay at Main Street

These developments follow a surge in institutional interest in crypto and digital assets in recent years. Still, significant hurdles remain before stablecoin transfers can become a mainstream feature at traditional banks.

“No company wants 100% of their flows and positioning visible on chain as a competitive advantage, so this will solve a lot of issues for FIs,” Hugentobler said. “At its core, USDCx is trying to restore the default confidentiality FIs have and are used to in existing account-based systems, but on programmable, interoperable stablecoin rails.”

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Through its banking arm, Sony plans to launch a U.S. dollar-backed stablecoin that could play a significant role in the company’s gaming and entertainment ecosystem.

This launch represents one of the few direct USD stablecoin initiatives by a Japanese company and is being facilitated through a partnership with digital assets firm Bastion. The U.S.-based firm will oversee stablecoin issuance, reserve management, and custody, while Sony Bank will support stablecoin services across Sony’s network of affiliates.

The stablecoin could debut as early 2026, with plans to integrate the token into Sony’s gaming, streaming, and anime platforms. The move would give users an alternative to credit cards for subscriptions, in-game purchases, and digital content.

Significant Bottom-Line Impacts

Reducing credit card payments would also minimize the substantial transaction fees that Sony currently incurs. What’s more, stablecoin payments could mitigate the costs and processing delays that have long plagued cross-border transactions. This could have significant impact on the bottom line, as roughly a third of Sony’s global revenue originates from the United States.

A similar rationale was cited by Klarna when it unveiled its stablecoin, KlarnaUSD. Since cross-border transactions generate more than $120 billion in annual fees, Klarna noted that a stablecoin would allow it to move money far more efficiently than under the current system.

Validating the Narrative

The instant settlement and minimal volatility of stablecoins have driven a flood of new launches in recent months. As many of the largest financial players release their own iterations, other companies have followed suit—including potentially Walmart and Amazon.

While Klarna has historically taken an unabashedly standoffish approach to crypto and digital assets, Sony has been far more active in the space. After last year’s launch of its Soneium layer-2 blockchain, the company collaborated with stablecoin leader Circle to make the USDC stablecoin a primary token on the blockchain. However, it’s unclear how Sony’s new stablecoin will interact with Soneium, if at all.

Still, Sony’s launch reflects the broader surge in confidence that stablecoins have enjoyed since the GENIUS Act was proposed and passed. That framework also established new compliance requirements for stablecoin issuers. To support its stablecoin, Sony Bank has applied for a U.S. banking license and may establish a branch to manage issuance and regulatory oversight.

Compliance, however, is only one challenge facing Sony’s stablecoin as it enters an extremely crowded market.

“I think this could have a lot of promise in the longer run, but it has a lot of headwinds to gain traction—like liquidity, user adoption, and user experience (UX) is a big part of it,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Sony jumping in validates the stablecoin narrative as going mainstream, but just because they’re launching a stablecoin product doesn’t mean they’re out of the woods quite yet.”

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In what could be a blockbuster acquisition, Mastercard is reportedly closing in on a deal to acquire Zerohash.

Zerohash provides financial institutions with technology to offer crypto and stablecoin trading and tokenization services. As demand for these capabilities has surged in recent years, Zerohash has garnered significant attention and investment from major firms, including Morgan Stanley and SoFi.

One of Zerohash’s most notable partnerships is its recent deal with OnePay, a fintech majority-owned by Walmart. Under the arrangement, Zerohash will facilitate crypto trading within OnePay’s app, opening the door for crypto purchases at the world’s largest retailer.

Mastercard is reportedly set to acquire the company for between $1.5 billion and $2 billion.

“This is a solid example of Mastercard’s forward-thinking strategy,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It’s a shift from partnerships to owning the infrastructure which should enable them to provide an in-house crypto or stablecoin as a service-type product (e.g. on and off ramps, custody, settlement, and staking).”

“Zerohash brings licensing—a U.S. money transmitter and a BitLicense—and clients,” he said. “From my understanding, they were going to be the company behind Morgan Stanley-owned E-Trade’s crypto product rollout next year, in addition to providing B2B infrastructure.”

Signaling Momentum

Mastercard’s move comes as U.S. stablecoin transactions surge, driven largely by the passage of stablecoin regulations. The use of stablecoins is also gaining significant traction in business-to-business and cross-border payments.

“This also signals momentum in the industry,” Hugentobler said. “This is one of the bigger deals, if not the biggest acquisitions that we’ve seen. All the embedded crypto rails that we picture are happening right in front of us.”

The Continuing Zeitgeist

In this zeitgeist, more companies than ever are expanding into digital assets. Notably, Visa recently piloted a program allowing businesses to prefund transactions via stablecoins on its Visa Direct cross-border payments platform.

As these companies race to add new functionalities, acquisitions are likely to continue. For example, Stripe acquired stablecoin company Bridge for roughly $1.1 billion in what was then one of the largest crypto-related deals to date. If Mastercard completes its acquisition of Zerohash, it would represent a continuation of this trend—rather than the end of it.

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Total stablecoin transactions reached $10 billion in August, up from $6 billion in February.

In July, the United States passed the GENIUS act, a bipartisan bill establishing a federal framework for the issuance, trading, and custody of stablecoins. The legislation set off a flurry of new stablecoin launches from leading financial services firms, as well as potential launches from a wide range of companies and government agencies.

A report from Artemis, a blockchain firm, highlighted the connection between the passage of the GENIUS act and the resulting surge in stablecoin activity. However, the report also noted that stablecoin usage had already been on a steady upward trajectory. According to Artemis, stablecoin payment volumes in August more than doubled year-over-year, and could reach $122 billion annually if current trends continue.

Increasing Business Adoption

One of the most notable findings from the Artemis study was that business-to-business (B2B) payments have surpassed peer-to-peer (P2P) transactions as the leading use case for stablecoins. B2B payments have surged 113% since February and now account for roughly two-thirds of the stablecoin market.

This surge in B2B activity is also likely linked to the passage of the GENIUS act, as a better-regulated U.S. stablecoin market is proving attractive to many organizations. In a separate study from Ripple, many financial leaders indicated they are open to using stablecoins within the next three years, and roughly a third said they already use them in their day-to-day operations.

The top three use cases cited were cross-border payments, trade settlement, and serving as a traditional bank alternative.

Adding Cross-Border Functionality

Stablecoins have long been touted as a solution to the inefficiencies of cross-border payments. These digital assets offer immediate settlement, low fees, full visibility, and stable value—a strong alternative to the correspondent banking system, where payments are often delayed in a multi-step process that can be both risky and expensive.

This cross-border capability is one of the main reasons why many financial services organizations have launched or considered launching stablecoins. For example, Zelle, which is owned by seven major U.S. banks, recently floated its plans to launch a stablecoin.

While Zelle is currently the largest P2P platform in the U.S., its users must have a bank account to send funds. Adding a stablecoin to its product list could allow the platform to expand its footprint beyond U.S. borders.

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Just as stablecoins have proliferated, there will be more networks to support them.

Blockchain infrastructure firm Fireblocks unveiled its global stablecoin network, which is designed to connect businesses with on/off ramp, liquidity, and compliance providers across the globe.. In a news release, Fireblocks likened its network to cross-border payments system Swift and noted that it already has more than 40 providers and hundreds of payment companies on board.

One of the selling points for Fireblocks is that its network was built to be compliant and enterprise-grade, but the company isn’t alone in this arena. After keeping plans for its blockchain under wraps, Stripe has officially unveiled its stablecoin-based blockchain Tempo, a collaboration with venture capital firm Paradigm.

Patrick Collison, CEO of Stripe, noted that existing blockchains were built to support cryptocurrencies, not to accommodate the nuances of stablecoin transactions. Like the Fireblocks network, Tempo is geared toward organizational adoption. However, unlike Fireblocks, Stripe already has an extensive and established customer base of businesses.

The Number of Competing Options

While this is a factor in Stripe’s favor, the payments giants face obstacles as it vies for position in a growing stablecoin market. Aside from the challenges associated with managing a secure global payment network, competing options are increasingly emerging.

For example, Circle recently unveiled its financial services blockchain, Arc. As Circle is the issuer of the second-largest stablecoin in the world, USDC, creating a stablecoin-centric infrastructure was naturally one of the company’s objectives for the blockchain.

Instead of building its own solution, crypto company Ripple announced that it will buy Rail, a stablecoin platform, to build a more extensive structure for organizations.

A Fragmented Market

All these blockchains are competing with established platforms like Ethereum and Solana, which many financial institutions have already heavily used for stablecoin transactions. Although all these platforms aim to unify global payments, they have also created a fragmented market.

For this reason, Google unveiled its Google Cloud Universal Ledger (GCUL), a financial services blockchain designed to be neutral and scalable. Google’s leadership noted that a neutral solution was necessary because, for example, Stripe’s competitors are unlikely to use Tempo.

Although it remains to be seen which solution will become predominant, the race to build the infrastructure for the surging stablecoin market means more launches are likely on the way.

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Although the global stablecoin market has surged above $280 billion in value, coins backed by the British pound account for only a fraction of this segment.

The U.S dollar has been the underpinning for all the leading stablecoins, and the United States has taken a significant step forward with the passage of the GENIUS Act—the long-awaited regulatory framework governing stablecoin usage in the country.

This U.S. dominance is one of the main reasons 30 of the largest crypto companies, including Coinbase, Kraken, BitGo, and Fireblocks, have urged Britain to reconsider its perspective toward stablecoins. The digital asset firms called for a national stablecoin strategy that “positions stablecoins not as a risk to be contained, but as a financial infrastructure to be responsibly embraced.”

Strengthening Its Position

The firms noted that a national stablecoin strategy will not only keep the UK from lagging behind the U.S. but also would strengthen the UK’s position as a global financial hub and generate new income streams for the nation.

A UK treasury spokesperson told CNBC that the country plans to finalize its framework around all digital assets (including stablecoins) by the end of the year. The official said this legislation was designed to give investors more confidence and drive growth in the UK.

A New Form of Money

Stablecoins have been one of the most impactful forces on the financial services industry in recent years. The digital assets have the potential to solve many long-standing issues like cross-border payment inefficiencies and volatile domestic currencies.

Although stablecoins have substantial potential, concern about the dominance of the U.S. dollar in the market has increased. This is one of the reasons some countries have explored central bank digital currencies (CBDCs), which are issued by a government instead of a company like Circle or Tether.

This could mitigate one of the stablecoin risks—that the company issuing the asset might not have the reserves to back it. Despite the potential benefits of CBDCs, the rapid rise of stablecoins has caused them to fall out of favor with many governments. Only three countries have deployed CBDCs on a national scale, and many other countries have abandoned their CBDC programs.

Interestingly, the UK is one of the countries that have considered scrapping plans for a digital currency. Bank of England officials have said it was more sensible for the UK to focus on other payment innovations rather than on a digital pound and that there was no need to launch a new form of money at this time.

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Few financial products have dominated the spotlight in recent months quite like stablecoins. With high-profile launches and new regulations, they are poised to make a substantial impact.

However, as a recent report from Ripple—2025 New Value: Stablecoin Trends in Business and Beyond—details, today’s landscape is just the tip of the iceberg for stablecoins.

More than just a crypto offshoot, stablecoins—particularly those where the value is pegged to a fiat currency— can address long-standing financial challenges like cross-border payment inefficiencies, treasury management complexities, and the limitations of today’s global settlement systems. They’ve also proven to be the digital asset of choice for traditional institutions that want to engage in the crypto ecosystem.

Solving for Inefficiencies

Most of the global finance leaders surveyed for Ripple’s report believe that stablecoins will have a massive or significant impact on business and finance, especially in the Middle East and Africa (MEA).

Stablecoins have been an important innovation for MEA because much of the region has faced longstanding issues such as heightened inflation, currency devaluations, and limited access to foreign exchange. Stablecoins can help mitigate or even eliminate these challenges.

In Latin America, cross-border payment inefficiencies have been a particular struggle. According to Mastercard, the average cost of sending remittances in Latin America was 6.3%, well above the 3% target established by the United Nations. With stablecoins, transactions are often nearly free.

Another issue with cross-border payments is the regulatory nuances specific to each country. Although crypto and digital assets have faced their share of regulatory uncertainty, these obstacles are gradually diminishing.

In the Persian Gulf, the UAE and Bahrain have established strong regulatory frameworks that enable stablecoins to play a significant role in both institutional and retail transactions. The European Union also recently passed its Markets in Crypto Assets (MiCA) regulations, which provide a comprehensive framework for stablecoin usage in the region.

One of the most historic milestones for stablecoins—and for the broader digital assets community—was the passage of the GENIUS Act in the United States. This legislation created a clear pathway for many organizations, including highly regulated financial institutions, to offer a stablecoin for the first time.

Stablecoins in the Enterprise Environment

The better-regulated stablecoin market has become highly attractive to many organizations. According to Ripple, many financial leaders indicated they were open to using stablecoins within the next three years, and roughly a third said they already use them in their day-to-day operations.

The top three use cases cited were cross-border payments, trading and trade settlement, and serving as an alternative to traditional banking systems.

Another significant advantage of stablecoins is their potential to dramatically improve financial access in underbanked regions, as they enable bank-less transactions. This means organizations in these regions—and beyond—can use stablecoins for payroll, savings, and payments, all with minimal transaction costs.

Businesses interested in the trading and trade settlement use case can also benefit from stablecoins’ unique attributes: 24/7 accessibility, enhanced liquidity, and reduced counterparty risk.

The Bridge to Digital Assets

Due to the powerful advantages of stablecoins, even participants from more traditional financial institutions are beginning to explore stablecoin strategies. Ripple’s research shows that approximately 86% of respondents are open to using stablecoins, while fewer than 10% have no plans for stablecoin adoption.

As more financial institutions move from strategizing to full-scale implementation, they are likely to explore additional digital asset initiatives.

Although central bank digital currencies (CBDCs) have fallen out of favor in the U.S.—largely due to the surge in stablecoin adoption—there is still potential for more CBDCs to emerge globally.

A CBDC is the official, government-issued digital version of a nation’s fiat currency, such as China’s e-CNY digital yuan or the Bahamas’ Sand Dollar. While privacy concerns have fueled some pushback, many regions are still pressing ahead with CBDC projects. In some cases, these efforts aim to counter the growing influence of stablecoins, which are largely backed by the U.S. dollar.

Stablecoin adoption could also drive a surge in tokenized deposits. These are digital representations of customer deposits held in bank accounts. The tokens are backed by funds held by the issuing institution and are typically designed for real-time transactions between financial institutions.

Citi recently highlighted the bright future of tokenized deposits, even as it announced it was considering launching a stablecoin.

Although stablecoins and tokenized deposits share many similarities—such as real-time settlement and low transaction fees—tokenized deposits are built to operate within a regulated banking environment. This is one reason tokenization initiatives have been undertaken by organizations like the Bank of England and the Bank for International Settlements (BIS).

In addition to CBDCs and tokenized deposits, organizations that adopt stablecoins are more likely to delve into the tokenization of real-world assets, crypto, and other blockchain-based technologies. However, stablecoins will likely remain the first step—a step financial institutions should already be preparing to take.

“FIs need to think beyond payments and about how embedded programmability features into financial workflows can enhance or streamline their operations,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research.

“Ripple frames stablecoins as being core to the future financial architecture,” he said. “Stablecoins are a fast, compliant, and programmable asset ready for institutional adoption. For FIs, this means rethinking settlement, custody, and financial product design to harness these rails before competitors do.”

From Hype to Utility

The infrastructure underpinning the digital assets industry, combined with improving regulatory clarity, is creating a zeitgeist for stablecoins. Institutions that adopt stablecoins today will be best positioned for the future.

That said, risks remain—particularly for financial institutions. They need solutions that not only ensure compliance but also protect their business from fraud. If an institution is considering issuing their own stablecoin, they’ll also need a bank-grade digital asset custody solution for secure storage and management.

This makes it imperative that these institutions partner with a stablecoin and digital assets provider that have a proven track record of working closely with industry regulators and global policymakers.

“Ripple’s RLUSD stablecoin demonstrates how compliant assets on blockchain rails can be integrated into enterprise workflows,” Hugentobler said. “These rails unlock new opportunities and models for FIs and service providers.”

“FIs and banks should take note—stablecoins aren’t just for cross border payments,” he said. “They’re for treasury and cash management, liquidity management, FX operations, and 24/7 settlement. If a financial institution or bank isn’t exploring stablecoin integration at this point, they’re behind the curve. There has been a significant shift from hype to utility.”

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The passage of the GENIUS Act in the U.S. has brought stablecoin interest to a fever pitch in recent months. However, even as more of the world’s leading organizations consider launching stablecoin, the use cases for these fiat-backed assets are still being unlocked.

In a recent PaymentsJournal podcast, Nabil Manji, SVP, Head of Fintech Growth and Financial Partnerships at Worldpay, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, highlighted payouts as one of the most intriguing applications for stablecoins—a model that could offer dramatic benefits for merchants.

At the Heart of Dovetailing Trends

In addition to regulatory clarity in the U.S., there has been global momentum toward more transparent digital asset regulations. For example, the European Union recently passed its Markets in Crypto-Assets (MiCA) legislation.

This improved regulated environment has made the space more attractive for both traditional financial institutions and corporates to explore digital assets. These organizations are considering stablecoins for several reasons, including payments, corporate treasury management, and yield generation.

The combination of regulatory clarity and institutional interest has dovetailed with broader payments trends to bring stablecoins into the spotlight.

“What I think makes the timing almost a perfect storm in a positive way is in many markets around the world, we’ve had domestic real-time payments,” Manji said. “The big outlier has been the U.S., where up until recently with RTP and FedNow, there hasn’t been relatively ubiquitous real-time payments.”

“Very quickly, the world’s largest economy and the participants in it, are going to grow accustomed to having real-time payments for domestic use cases through those payment rails,” he said.

In addition to the surge in real-time payments, cross-border e-commerce has continued to grow significantly, driven by factors like marketplace shopping, the gig economy, and social media commerce.

Consumers increasingly expect these trends—real-time payments and cross-border transactions—to converge, and they don’t understand why an adequate solution isn’t yet available.

Stablecoins are among the leading contenders to fill this gap because transactions are instant, efficient, and borderless. While their surface-level utility as a digital representation of the U.S. dollar is a game-changer, it’s only the beginning of what the technology can do.

“It’s becoming clearer, even to savvy payment folks, that it is different from what we have had in the past,” Wester said. “That was one of the misconceptions for a while, it was ‘Don’t we already do something like that?’ Well, not really. Once you begin to understand what stablecoins can do in terms of being a programmable digital bearer instrument, that idea becomes very powerful, and people begin to explore what they can do with it.”

The Two Lenses

While payment acceptance has traditionally taken precedence, payouts are at the heart of many merchants’ business models. These companies are searching for ways to make real-time, inexpensive payouts to beneficiaries, which could include employees, vendors, customers or other third parties.

These payouts are often high-frequency and low-value—such as those a marketplace might make to its sellers or a gig company to its workers. They could also include an airline reimbursing a passenger for disrupted travel plans, or an online gaming company paying out winnings to a user.

Often, these merchants need to make payout in a relatively high number of currencies and geographies. Additionally, many of the best candidates for stablecoin payouts serve unique customer bases.

“You layer on top of that the type of customers of theirs that would want to receive a stablecoin instead of fiat currency,” Manji said. “Then you layer on top the recipients that are in places like countries that have volatile currencies, or countries that the population is underbanked or unbanked.”

“Also, populations where they’ve got a relatively young age skew and people that want something like a stablecoin, because they’re comfortable with investing and generating yield on a stablecoin or operating something like a crypto wallet,” he said. “Those are the two lenses where this makes sense to offer to customers.”

Cutting Through the Complexity

Though stablecoin payouts may seem like a no-brainer given the regulatory environment and consumer familiarity, many merchants are still concerned about the implications of adopting cryptocurrency for payouts.

“One of the problems with payments people is we’re fascinated with payments, thinking everybody else is fascinated with payments too, and they’re not,” Wester said. “They just want to make sure that their money moves. We started talking about blockchain, digital assets, cryptos, stablecoins and how cool it is from a technology standpoint. All they did was look at it and say, ‘Wait, how are payments done? This sounds complex.’”

However, advancements in technology have made global payouts using stablecoins virtually indistinguishable from payouts in fiat currencies.

For example, on Worldpay’s platform, a merchant can fund their account in various fiat currencies. They can then initiate a payout request via an API call or by uploading a batch file containing hundreds or thousands of payments requests. Alternatively, they can log into the online portal to submit a one-off manual payment.

Regardless of the method, the payment instruction determines which currency should be deducted from the merchant’s account and which currency should be paid out to the recipient.

“For example, they may say, ‘Use some of my USD balance that I funded you to payout one of my marketplace sellers in Turkish lira,” Manji said. “We have connections in our platform to payout in over 130 currencies in over 180 markets, of which approximately 80 are on real-time payment rails. We can, in most cases, execute a relatively instantaneous payout to a beneficiary in countries covering most of the world’s GDP.”

The addition of stablecoin payouts to the platform means that Circle’s USDC has essentially become the 131st payout currency—making the adoption of stablecoin payouts as simple as the click of a button.

“There’s no new integration; there’s no new platform; there’s no new logic,” Manji said. “All we’ve done is in the field in the API where you put the destination currency, instead of putting something like Turkish lira or Argentinian peso, you just put USDC. Instead of sending us an international bank account number or a routing number and account number, you send us a wallet address and we take care of it from there.”

“So, the merchant doesn’t need any crypto wallet,” he said. “They don’t need to hold USDC. They don’t need to touch USDC. They don’t need to know what chain the customer’s wallet is on. They don’t need to screen the wallet. We take care of all of that for them.”

Across the Spectrum

This functionality can be a game-changer for merchants, but it is just the beginning of the road for stablecoins. Once organizations become accustomed to stablecoin payouts, they will begin to recognize other benefits, such as the ability to automatically execute transactions.

“The people who seem to light up the most when you talk about programmability are corporate treasurers,” Wester said. “They’re like, ‘I can do a lot of stuff that right now is either a manual process or an inefficient process.’ I think that is going to be an area where we’re going to see a lot of development.”

The recent surge of stablecoin-related news has led some to wonder when the hype might fade. However, the efficiencies and capabilities of stablecoins are likely to keep them at the forefront of the financial services industry for many years to come.

“There is this increasing interest from traditional financial institutions, from the payment ecosystem, from our clients, and from consumers to start using stablecoins in a meaningful way,” Manji said. “I think there’s this real interest now—across the spectrum—that’s giving us a lot of excitement in terms of how we’re thinking about the space and how we want to invest.”

The post Amid Surging Stablecoin Use Cases, Payouts Stand Out appeared first on PaymentsJournal.

After law enforcement agencies identified illegal activity, stablecoin issuer Tether froze $85,877 worth of its flagship USDT coin.

The freeze followed a user’s report that their Binance account has been hacked and their USDT was drained. However, this freeze is relatively small compared to the firm’s recent larger-scale actions.

In June, Tether froze $700 million in USDT across 112 wallets after U.S. authorities requested an intervention. To date, Tether says it has frozen over $2.5 billion in USDT after working with global authorities to identify illicit activity.

These freezes address one of the most long-standing concerns with digital assets: their potential for misuse in money laundering and fraud.

“Tether’s ability to track transactions and freeze USDT linked to illicit activity sets it apart from traditional fiat and decentralized assets,” Paolo Ardoino, CEO of Tether, noted in a blog post. “We take our responsibility to combat financial crime seriously and will continue working closely with global law enforcement agencies.”

The Foundational Tenets

The ability to identify and freeze funds at the smart contract level sets stablecoins apart from cryptocurrencies like Bitcoin and Ethereum. One of the foundational tenets of these digital assets is that they are decentralized and free from government oversight.

Privacy concerns have been one of the main reasons why stablecoins are often favored over government-issued central bank digital currencies (CBDCs). For example, critics of the digital euro said that the CBDC could be used to surveil the region’s citizens, an assertion denied by the European Central Bank.

Control and Visibility

Interest in CBDCs has continued to wane in most countries. In the U.S., legislation that would ban the Federal Reserve from issuing a CBDC has moved forward—even as the nation’s first stablecoin regulations have been signed into law.

However, stablecoin issuers’ ability to monitor and control their coins raises concerns about privacy. These concerns are amplified as a wave of new stablecoins are expected to enter the market. Retailers like Walmart and Amazon, tech giant Meta, and leading U.S. banks like JPMorgan Chase, Bank of America, and Citi have all announced plans to launch their own stablecoins.

As these products roll out, questions will persist about how these organizations will enforce the usage of their stablecoins—and how they will protect users’ data.

The post Tether Freeze Raises Stablecoin Centralization Concerns appeared first on PaymentsJournal.

Wyoming—often at the forefront of crypto innovation—has piloted its Wyoming Stablecoin (WYST) with help from blockchain firm Hashfire.

Hashfire’s platform was built to bring agreements and contracts on-chain. The goal of the WYST trial was to automate vendor agreement approvals and enable real-time payments—a process that would normally take 45 days.

According to Coindesk, Wyoming officials have indicated they could launch the stablecoin as soon as this month and plan to move forward with broader use cases for WYST later this quarter.

Not Jumping on the Bandwagon

There have been a slew of stablecoins announced in recent months, largely due to the imminent passage of the GENIUS Act, a landmark U.S. bill designed to establish a regulatory framework for stablecoins.

However, Wyoming is not merely jumping on the bandwagon. The state announced its plans to launch a stablecoin nearly a year ago.

“Wyoming has been the leading state in crypto acceptance, and it is attempting to maintain that lead,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, told PaymentsJournal. “Their stance on crypto is akin to that of Switzerland—they fully support it and they have passed roughly 30 laws to help push innovation while still protecting consumers.”

Making Crypto Advances

While Wyoming has been an early mover in the digital assets space, several other states and cities have made advances of their own. For example, New York State recently proposed a law that would allow residents to use bitcoin, ether, and other cryptocurrencies to pay fines, taxes, and penalties.

Both Colorado and Utah have accepted cryptocurrencies for tax payments for years, and Louisiana recently became the first state to accept crypto payments for all state services. Additionally, Detroit will accept crypto for tax and fee payments—making it the largest U.S. city to do so.

Although these entities haven’t yet matched Wyoming’s progress, more government agencies are likely to explore digital assets. If the WYST trials are any indication, digital assets have the potential to transform often-onerous government payment process into a streamlined, real-time operation.

The post Wyoming Trials Stablecoin for Contractor Payments appeared first on PaymentsJournal.

As U.S. lawmakers inch closer to passing stablecoin legislation, Citigroup is reportedly exploring the possibility of issuing its own stablecoin.

In a post-earnings call, Jane Fraser, CEO of Citigroup, said the institution is also evaluating key aspects of digital assets, including stablecoin reserve management, fiat and digital currency on- and off-ramps, and crypto custodial services.

This growing interest in digital asset technologies reflects a larger trend in the U.S. financial services industry. JPMorgan Chase and Bank of America have both signaled plans to deepen their involvement with stablecoins, with JPMorgan pursuing several initiatives through its Kinexys digital assets division.

Stablecoins have dominated the limelight in recent months, with industry leaders like Walmart, Amazon, and Meta openly considering launching their own stablecoins. However, fiat-backed tokens are more than just a passing fad—they have the potential to revolutionize finance, particularly in areas like cross-border payments.

Lost in the Hoopla

Amid the stablecoin hype, the broader integration of digital asset technologies into mainstream finance often gets overlooked. Blockchain—the underlying technology behind digital assets, including stablecoins—has applications that go well beyond cryptocurrency.

With its secure, transparent framework, blockchain offers an ideal foundation for artificial intelligence. AI has struggled with inefficiencies, often due to reliance on incomplete data repositories and a lack of transparency around its decision-making. Blockchain can mitigate both issues: its records are immutable, and its processes are fully transparent.

A Trend That Will Continue

Blockchain can also serve as the foundation for tokenizing real-world assets. For example, a property deed could be digitized and placed on-chain, making often complex property transactions secure, transparent, and near-instant.

For these reasons, many investment firms, such as Citadel and BlackRock, have explored the tokenization of stocks and bonds.

However, according to Citi’s Fraser, one of the strongest areas of opportunity for Citi lies in tokenized deposits. Tokenized deposits can offer the same speedy settlement and low fees as stablecoins, but within a regulated banking environment. This is one of the reasons tokenization initiatives have been taken up by organizations like the Bank of England and the Bank for International Settlements (BIS).

“I think tokenized deposits will be a big focus for financial institutions because private lending has grown immensely, just in the last year,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research told PaymentsJournal. “More banks are putting assets like HELOCs and personal loans on chain, and it is much faster and more transparent for banks and consumers.”

“It’s a trend that’s going to continue—companies are going to continue to put funds and assets on-chain,” he said.

The post Citi Considers Stablecoin, but Is More Active in Tokenized Deposits appeared first on PaymentsJournal.

More banks will soon have an avenue to capitalize on crypto, as Fiserv rolls out a digital assets platform and stablecoin that will be available to its customers.

The stablecoin, FIUSD, along with the platform, will be accessible to banks and credit unions by the end of the year. This move is expected to dramatically increase the number of financial institutions that can offer crypto services.

FIUSD will be built on infrastructure provided by stablecoin leaders Paxos and Circle, and will initially be issued on the Solana blockchain. Solana has become the blockchain of choice for financial institutions due to its speed and lower transaction costs compared to Ethereum.

Laster this year, Solana is slated to receive a major upgrade that will not only outpace competing blockchains, but also surpass the speed of the well-established payment rails built by Visa and Mastercard.

Combining Global Reach

With this foray into digital assets, Fiserv hopes to build interoperability with other stablecoins. The company has already unveiled its partnership with PayPal to integrate FIUSD with PYUSD, PayPal’s stablecoin.

PYUSD has been around for two years, and one of its main features is that it’s issued by a payments company—not a crypto company—with a global customer base. Fiserv noted that combining the global reach of Fiserv and PayPal would accelerate the adoption of both companies’ stablecoins.

Actively Expanding Use Cases

While banks and credit unions have increasingly viewed digital assets as a powerful opportunity, compliance concerns have kept many financial institutions on the outside looking in.

A key feature of FIUSD is that it’s built with a compliance-first approach. Fiserv said FIUSD gives financial institutions full control and enables compliance through the company’s existing fraud monitoring, risk management, and settlement systems.

The company also hopes to bring more digital asset offerings to its platform in the future. Tokenization is another technology that financial institutions have incorporated over the past few years—for many of the same reasons stablecoins have gained traction.

Tokenization of real-world assets simplifies transactions that are time-consuming, risky, and expensive for banks. Fiserv is exploring the use of deposit tokens to maintain the benefits of stablecoins in the institutional environment and is in discussions about partnerships to expand use cases.

The post Fiserv Unveils Stablecoin for its Network of Financial Institutions appeared first on PaymentsJournal.

After bringing Shopify on board, Coinbase will roll out its stablecoin acceptance platform to merchants at scale.

The platform, dubbed Coinbase Payments, provides the infrastructure where merchants can receive payments in Circle’s USDC. It runs on Coinbase’s layer-2 network, Base, and supports hundreds of wallets, including MetaMask, Phantom, and Coinbase Wallet.

On the back end, the solution is designed to handle standard merchant operations such as refunds and subscriptions, leveraging Coinbase’s APIs.

Benefits and Rewards

Shopify is already live on Coinbase Payments, a partnership which brings stablecoin payments to a wide array of merchants and creators. While stablecoin acceptance gives customers another way to pay how they prefer, it also offers substantial benefits to merchants.

Stablecoin payments are borderless, secure, nearly instant, and free from the transaction fees typically associated with credit cards. These advantages are part of the reason why the two largest retailers in the world—Amazon and Walmart—have considered launching brand-specific stablecoins.

In addition to reducing transaction costs—which could translates to billions of dollars in savings for major retailers—there is also the potential for merchants to offer incentives for using branded coins. Coinbase hopes to bring this capability to Coinbase Payments by adding support for programmable rewards to the platform soon.

The Deluge of Stablecoins

The deluge of stablecoin-centric launches in recent months shows no sign of slowing—especially now that the U.S. has reached a key milestone. The Senate recently passed the GENIUS Act, a bipartisan bill aimed at establishing a regulatory framework for stablecoins in the U.S.

This marks the first time such legislation has moved forward at the federal level. However, the Act still faces obstacles: The U.S. House of Representatives must pass it, and lawmakers may need to reconcile it with its own STABLE Act.

Despite differences between these two bills, the development represents a significant step forward for the digital assets industry. The lack of regulatory clarity has long drawn criticism,  and more certainty provide a tailwind for the already accelerating stablecoin market.

The post Coinbase Launches Stablecoin Platform for E-Commerce appeared first on PaymentsJournal.

As more organizations consider branded stablecoins, a recent JPMorgan Chase trademark application has fueled speculation that the bank is gearing up for a stablecoin launch.

The document filed with the U.S. Patent and Trademark Office seeks to trademark JPMD, which has been considered to stand for JPMorgan Dollar. The application states that the bank is pursuing this trademark to carry out crypto and digital assets services such as trading, transfers, and payment processing.

Although JPMorgan Chase has not yet confirmed anything, many in the crypto industry quickly took the filing as a sign that a stablecoin is on the way from the largest bank in the United States.

A Strong Proponent

This isn’t a stretch. JPMorgan Chase has been an early adopter and strong proponent for digital assets technologies. The institution launched one of the world’s first bank-operated blockchains, Onyx—a platform later rebranded to Kinexys—to bring technologies like blockchain and tokenization to mainstream financial services.

The platform’s crypto payment settlement system, JPM Coin, is a cryptocurrency that banks use to perform foreign exchange conversions on the blockchain. One of the initial use cases for the crypto, which was also rebranded as Kinexys Digital Payments, was to facilitate USD to euro conversions.

More recently, Kinexys signed a deal with India’s Axis Bank to allow the bank’s enterprise clients to send and receive USD transfers both domestically and cross-border in real-time.

A Solo Stablecoin

JPMorgan has strong digital assets underpinnings, but recent indications were that the bank wasn’t pursuing a solo stablecoin. In fact, The Wall Street Journal reported that Citi, Chase, Bank of America, and Wells Fargo were considering issuing a joint stablecoin.

Whether or not JPMorgan decides to go at it alone, it seems clear that major financial institutions around the world are destined to enter the roughly $250 billion stablecoin market. This trend is spreading outside of the financial services industry. Walmart and Amazon recently signaled that they are considering brand-specific stablecoin launches of their own.

This news raised concerns that stablecoin payments to the two largest retailers in the world could remove significant volume from the traditional financial system, which is likely a reason that banks are working toward stablecoins of their own.

The post JPMorgan Pursues Trademark for Potential Stablecoin appeared first on PaymentsJournal.

The two largest retailers in the world are considering stablecoin launches—moves that could shift a significant volume of transactions away from the traditional financial system.

The Wall Street Journal reports that both companies are exploring this strategy as they eye the potential passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act—a law designed to provide a regulatory framework for stablecoin transactions.

A brand-specific stablecoin could save Amazon and Walmart billions in transaction fees while enabling instant and transparent payments. Th impact could be especially pronounced in cross-border payments, where global retailers often face high fees and delays.

However, there are also concerns that widespread adoption of stablecoin payments could divert billions from the traditional banking system. So far, neither Walmart nor Amazon have confirmed their stablecoin ambitions yet.

Not Alone in Their Ambitions

The retail giants aren’t alone in these ambitions, as the WSJ also noted that travel company Expedia Group and many major airlines have considered stablecoins of their own.

Meta is also working with stablecoin companies to launch its own stablecoin, with cross-border payments as a primary use case. For example, an Instagram creator could receive an international payment in Meta’s stablecoin and bypass delays, fees, and regulatory barriers.

Getting into the Game

Although there are concerns that these stablecoin launches could detract from financial players, more traditional banks are getting into the game themselves. France’s Societe Generale became the first regulated bank to launch its own stablecoin with a euro-backed offering a few years ago, and it now plans to follow this up with a USD-backed stablecoin.

There have also been reports that major U.S. banks like Citi, Chase, Bank of America, and Wells Fargo are considering issuing a joint stablecoin. These financial institutions are enticed by a $250 billion market that already includes a stablecoin from PayPal, and will likely soon include one from Stripe.

Many companies that aren’t launching their own stablecoin are still working to accept coins issued by Tether and Circle. Most recently, e-commerce marketplace Shopify said it would accept Circle’s USDC through a partnership with Coinbase.

According to Shopify, the reason why it is adding this functionality is because stablecoins provide a secure and efficient protocol that can be accepted by the company’s global base of creators.

The post Walmart and Amazon Mull Launching Branded Stablecoins appeared first on PaymentsJournal.

After its euro-backed stablecoin failed to gain traction, Société Générale is launching a stablecoin pegged to the U.S. dollar.

The Paris-based bank’s EUR CoinVertible (EURCV) was a milestone offering because it marked the first time a regulated bank issued a euro-backed stablecoin.

Though the stablecoin was launched two years ago and is compliant with the European Union’s Markets in Crypto-Assets (MiCA) regulations—which govern crypto and stablecoins—EURCV has only around $47 million in circulation.

Jean-Marc Stenger, CEO of SG-Forge, the digital assets arm of Société Générale, told Reuters that a USD-backed stablecoin was the natural next step for the bank. It is also another landmark for Société Générale, as it will be the first time a major bank has launched a dollar-based stablecoin.

The new coin, dubbed USD CoinVertible (USDCV), is expected to be issued this summer on the Ethereum and Solana blockchains.

The Need for a Regulated Offering

Though stablecoins have become a $250 billion market, MiCA regulations limit many players from trading in the EU. Most notably, Tether—which issues the world’s leading stablecoin—is not licensed to operate in the region.

While the other major stablecoin player, Circle, is licensed under MiCA and has successful euro- and dollar-backed stablecoins in circulation, Société Générale believes there is still room for USDCV.

“At the moment, there are no other banking-related players in that space,” Stenger told Reuters. “That’s definitely the feedback we have from the market, both corporates, financial institutions, but also crypto exchanges. There is a very, very strong need for well-regulated, robust offering in the crypto and stablecoin space.”

A USD Coin in the EU

It had become a foregone conclusion that a significant financial institution would offer a stablecoin, as banks around the world have been inching closer to the digital asset. The Wall Street Journal recently reported that major U.S. banks like Citi, Chase, Bank of America, and Wells Fargo have considered issuing a joint stablecoin.

However, the Société Générale’s USDCV launch is intriguing because there have been concerns in the EU about the dominance of USD stablecoins. Some have said that the reliance on these coins would only increase the region’s dependence on foreign currencies and companies.

Interestingly, USDCV is backed by U.S. bank BNY Mellon, who will act as the custodian for the stablecoin’s assets. However, Société Générale believes that the stablecoin’s potential use cases in crypto trading, cross-border payments, foreign exchange transactions, and cash management outweigh any foreign dependence.

The post France’s Société Générale Launches USD Stablecoin appeared first on PaymentsJournal.

In a move that has the potential to usher in a new era of cross-border payments, Sling Money is introducing its US and European Virtual Accounts—combining the accessibility of traditional payment rails with the efficiency of tokenization. According to Sling Money, these accounts will go beyond peer-to-peer transactions, enabling users to receive payments in their local currency from multiple locations around the world.

Designed as a global equivalent to Venmo, Sling Money lets users route payments into either a U.S. account and routing number or a European IBAN. This means they can receive funds in both dollars and euros—directly into their Sling Wallet.

“Sling Money has bridged two separate systems—local banking rails like ACH and stablecoins—into a single seamless app,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “This will significantly reduce friction in cross-border payments.”

Founded three years ago, Sling Money launched in the U.S. last November and is now available in more than 75 countries. In addition to ACH, it also plans to expand into using RTP and FedNow as payment rails.

An Alliance with Bridge

A key development in all of this was Stripe’s acquisition of the regulated financial infrastructure provider Bridge in February. Bridge’s technology converts incoming payments into stablecoins—either the Pax Dollar, a dollar-backed stablecoin issued by Paxos Trust Company, or the Euro Coin, issued by Circle. Sling then transfers the chosen stablecoin to the user’s wallet, where the funds can be held within the app or converted into local currency for a small fee.

“Stripe’s acquisition of Bridge, now powering Sling Money’s accounts, signals that one of the biggest fintechs in the world is leading the charge with stablecoin infrastructure and seamless payment applications,” said Hugentobler. “It also gives Sling greater credibility and probably scalability as well. There’s clearly a convergence of traditional and blockchain based fintech going on here.”

The Stablecoin Difference

Stablecoins are increasingly playing a key role in cross-border payments. According to the Bank for International Settlements, bitcoin, ether, and other leading stablecoins facilitated roughly $600 billion in cross-border transactions in Q2 2024 alone.

“This highlights the validity of stablecoins as a payment option thesis,” said Hugentobler. “Sling Money is ahead of many of its competitors in the way that it is already enabling regulated crypto payments through Bridge.”

The post Sling Money Brings Stablecoins to Traditional Rails for P2P Transfers appeared first on PaymentsJournal.

Artificial intelligence models are only as effective as the data they’re trained on, which is one reason why Stripe believes its AI-driven payments platform can better detect fraud.

At an event, the company said its Payments Foundation Model has been trained on billions of transactions that flow through its systems, which makes the AI model more attuned to the nuanced aspects of each transaction.

One example is card testing fraud, where criminals run small transactions to check if stolen card details are still active. Stripe said that while its previous AI tools had some success in blocking this kind of fraud, the new model could reduce card testing by 64% almost immediately—thanks to expanded access to the company’s transaction data.

Following in the Footsteps

Stripe is following in the footsteps of some of the world’s largest financial players, who are doubling down on their AI initiatives.

Both Mastercard and Visa have launched new platforms designed to capture the potential of agentic AI. Mastercard’s Agent Pay and Visa’s Intelligent Commerce platforms are built to handle all the aspects of a transaction autonomously—from picking out items to the final purchase.

In the crypto space, Coinbase has unveiled its x402 payments mechanism that leverages an existing HTTP protocol to enable both humans and AI agents to conduct stablecoin transactions during web interactions.

Replacing the Coach

As hot as AI is, stablecoins have also been making headlines in recent months. After PayPal launched its stablecoin two years ago, it seemed natural that Stripe would follow suit with one of its own. This launch became inevitable  after the company’s billion-dollar acquisition of stablecoin company Bridge.

However, Stripe has broader ambitions in the stablecoin market. The fintech’s leadership has indicated plans to bring stablecoin-backed, multicurrency cards for businesses. The goal is to give businesses in different countries the ability to operate using the same currency.

Additionally, Stripe is planning to roll out a range of new offerings, including everything from tax help to instant payment integration. However, it’s unclear whether this bevy of solutions will help the company move forward.

“Stripe is persistent, if nothing else, as it relentlessly chases global omnichannel merchants,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “The press releases, product stack and required features/functions are all there, the only thing missing is the large enterprise merchants.”

“Like the sports team that continually replaces the head coach, at some point you have to wonder what the real issue is,” he said. “However, this fraud model could be a game-changer if it truly delivers the results that Stripe claims.”

The post Stripe’s AI Model Touted to Be More Effective Against Fraud appeared first on PaymentsJournal.

Crypto exchange Coinbase will launch the x402 payments mechanism, which leverages the existing HTTP “402 Payment Required” status code to facilitate instant stablecoin payments.

The protocol allows APIs, apps, and AI agents to conduct transactions during web interactions with minimal code integration. This means humans and AI agents can exchange digital assets as easily as they exchange data.

“x402 turns this 402 status code into a real payment layer, which allows any server to request a payment, and any client (human or agent) to respond with digital dollars like stablecoins,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Giving agents access to external context and APIs right now is a fairly high-friction process with a lot of manual configurations. The x402 streamlines and removes a lot of the bottlenecks associated with that.”

AI in the Shopping Experience

Eliminating these obstacles could be the next step in granting agentic AI a more substantial role in transactions. There has been a significant push toward incorporating agentic AI into the shopping experience, which has intensified in recent weeks, as both Mastercard and Visa have rolled out new platforms.

Mastercard’s Agent Pay incorporates agents capable of shopping for specific items—such as a pair of yellow skis—or even assembling a selection of products and services for an entire occasion. Shortly after, Visa introduced its Intelligent Commerce platform, offering a similar range of features.

However, these services can go further than simply locating and suggesting items. The ultimate goal is for agentic AI to autonomously handle every step of the transaction, including the purchase itself.

Dominating the Limelight

Coinbase’s crypto-centric solution represents the ongoing convergence of artificial intelligence and digital assets—a trend that has accelerated in recent years. Although blockchain and tokenization initiatives are priorities for financial institutions, stablecoins have dominated the narrative.

The potential of Coinbase’s x402 is likely to reinforce the prominence of stablecoins.

“This model is more scalable, efficient, economically viable, and it opens up a new on-chain business model for content and cloud service providers,” Hugentobler said. “Stablecoins enable programmable transactions for reoccurring payments or subscriptions. It also has built-in compliance and security.”

The post Coinbase Payments Protocol Puts Stablecoin Transfers in AI Agents’ Purview appeared first on PaymentsJournal.

Stripe has invited companies outside of the United States, the UK, and the EU to participate in trials of its U.S. dollar-backed stablecoin.

Patrick Collison, CEO of Stripe, said the payments firm had been planning a stablecoin launch for over a decade. The company made an early foray into bitcoin payments around the same time, but the demands of processing crypto and digital assets led Stripe to step away from bitcoin shortly afterward.

However, Stripe has made crypto a priority over the past year. The company entered into a partnership with Coinbase, allowing users to receive payouts and convert fiat in stablecoins like Circle’s USDC and Pax Dollar.

While this was a significant step, there has long been speculation about when Stripe would issue a stablecoin of its own. Rival payments firm PayPal recently introduced its PYUSD stablecoin, and its established customer base and institutional connections helped the token quickly gain significant traction in the market.

Compliance-Grade, Enterprise-Ready

After the recent acquisition of stablecoin company Bridge, it became clear that Stripe had stablecoin designs of its own. The $1.1 billion deal was the largest purchase Stripe ever made, and one of the largest acquisitions the crypto industry has seen.

While it may seem like just another stablecoin in an already crowded market, there are clear advantages that Stripe brings to the table.

“Unlike crypto-native firms that build first and seek permission later, Stripe is ‘regulatory-first’ and that gives it a leg up,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “With regulatory approval of the Bridge acquisition, Stripe’s stablecoin product could offer the compliance-grade, enterprise-ready solution that banks, fintechs, and international businesses have been waiting for.”

The Real Prize

In addition to compliance benefits, Stripe aims to differentiate itself by targeting markets that have been previously underserved.

“Everyone’s talking about stablecoins in the U.S., but Stripe believes the real prize is outside the states,” Hugentobler said. “While competitors fight for domestic market share, Stripe is building liquidity rails across the Global South, Asia, and Latin America—where demand for dollar-stable value transfer is enormous but bank infrastructure is weak.”

Additionally, Stripe is likely hoping its stablecoin can help solve persistent cross-border payment issues like delays and fees.

“Stripe could lock up international business clients who need fast, cheap, and compliant payment options,” Hugentobler said. “Global companies are desperate for low-friction cross-border payment solutions. Existing payment options are expensive, slow, and often have currency exchange barriers. Stripe’s product is filling the gap.”

The post How Stripe’s Stablecoin Can Differentiate Itself in a Crowded Market appeared first on PaymentsJournal.

The stablecoin market is more competitive than ever, yet it remains dominated by USD-backed assets like Tether’s USDT and Circle’s USDC. In this dynamic environment, Latin American crypto exchange Bitso is launching a Mexican peso-backed stablecoin, which could serve as a cross-border payments solution in the region.

The exchange has established a subsidiary, Juno, to issue its digital assets. Juno’s first launch will be the MXNB stablecoin. Juno will operate independently from Bitso to manage MXNB and will conduct its own reserve audits and reporting.

Ben Reid, Head of Stablecoins at Bitso Business, said that a primary objective for the stablecoin is to drive foreign investment by allowing “global companies to do business in Latin America in a more efficient way” than the conventional financial infrastructure.

Stablecoin Store of Value

The launch follows a recent Bitso study on Latin American crypto adoption, in which the company reported a 9% year-over-year increase in stablecoin purchases on its exchange in 2024.

While there are existing Mexican peso-backed stablecoins, such as Tether’s MXNT, Bitso noted that most of last year’s growth was seen in USD-backed stablecoins. USDT and USDC together accounted for 39% of total purchases on the platform in 2024.

Bitso referred to these stablecoins as a store of value for Latin American citizens grappling with difficult macroeconomic conditions, including high inflation and currency devaluation.

Solving Cross-Border Payments Struggles

Stablecoins have gained traction in regions with volatile currencies or underbanked populations because they offer a reliable alternative. They have also emerged as prime candidates for cross-border remittances, as their blockchain foundation ensures swift and secure payments.

Cross-border payments are more in-demand than ever but remain plagued by issues like slow settlement times, fraud, and exorbitant fees. While a Mexican peso stablecoin like MXNB would undoubtedly be a more reliable alternative to fiat currencies, there are still questions about how it will carve out a niche in a competitive market.

To drive adoption of MXNB, Juno plans to launch its Juno Mint Platform, which gives businesses the APIs and tools to redeem and convert MXNB. The service also facilitates fiat conversions and stablecoin exchanges.

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In the latest step toward global stablecoin adoption, the crypto subsidiary of Japan’s SBI financial services company will soon support Circle’s USDC stablecoin.

SBI Group is a vast conglomerate with businesses spanning industries from banking to biotechnology. Its crypto division, VC Trade, was launched almost a decade ago and currently supports digital assets like bitcoin, Ether, and XRP.

Until two years ago, the Japanese government had a ban on stablecoins backed by foreign currencies. Although regulations have since eased, questions remained about how soon a USD-tracking stablecoin would hit the market.

SBI VC Trade CEO Tomohiko Kondo recently stated that the platform had received word from the Kanto Regional Financial Bureau’s Tokyo office that it was registered as an electronic payment instrument trading business operator. The platform plans to launch a USDC trading trial for selected users later this month, followed by a widescale USDC rollout soon.

Global Reach

Kondo has also said that SBI VC Trade was “the first and only company in Japan to obtain a so-called stablecoin license.” Circle founder and CEO Jeremy Allaire echoed this sentiment, calling USDC the “first and only global dollar stablecoin to become approved for use in Japan.”

Circle has been rapidly expanding USDC’s global reach, as the stablecoin recently achieved compliance with Canada’s new stablecoin laws. The Canadian Securities Administrators implemented a set of rules defining Value-Referenced Crypto Assets (VCRA), including digital assets that track the value of a fiat currency. As of December, USDC was the only stablecoin to meet Canada’s requirements.

Jumping Ship

While Circle is making strides, Tether’s USDT stablecoin still holds a commanding position in the market, boasting more than double the market capitalization of USDC. Additionally, numerous other stablecoin options, including those from Dai, Ethena, and even PayPal’s PYUSD, pose challenges to Circle’s position. However, despite the crowded landscape, Circle continues to stand out.

“At the end of the day, they’re all pretty much the same product, but they’re not managed the same,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research told PaymentsJournal. “If Circle continues to gain compliance in other jurisdictions, retail users will likely jump ship because their platform faces less risks. A lot of institutions prefer USDC over Tether currently, and this trend will continue as well.”

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As the use of stablecoins increases, Singapore’s Metro department store chain will begin supporting stablecoin transactions both in-store and online.

According to Cointelegraph, the integration will be powered by crypto platform Dtcpay. Metro customers will be able to make purchases using dollar-based assets like Tether’s USDT and Circle’s USDC, as well as FD121’s First Digital USD and the Worldwide USD (WUSD) stablecoin issued by the Worldwide Stablecoin Payment Network.

Founded almost 70 years ago, Metro department stores have since grown into an important brand across many Asian markets. However, stablecoin payments will initially be available only at the Metro Paragon and Metro Woodlands locations in Singapore.

A Viable Asset

Stablecoins have been considered one of the most viable digital assets for everyday transactions because they aren’t as volatile as many cryptocurrencies. However, until now, the majority of stablecoin transactions have been limited to crypto exchanges.

The adoption of stablecoins in retail represents another critical step toward what many consider an impending golden age of stablecoins. The use cases for a digital asset that tracks a fiat currency are numerous, such as in cross-border payments and in countries that lack a stable fiat currency.

Stablecoins Are Here to Stay

Though there are increasing applications for stablecoins, the most significant factor driving the momentum of these digital assets is their increased adoption by major players in the payments industry like PayPal and Stripe.

Two years ago, PayPal launched its PayPal USD (PYUSD) stablecoin, which soon reached a market capitalization of $1 billion. While PYUSD’s market share is still just a fraction of Tether’s industry leading USDT stablecoin, PayPal has a well-established network of partners and financial institutions that it can leverage to drive growth.

The same can be said for Stripe, which finally added crypto transactions into its payments platform after a series of attempts over the years. However, more significant than the crypto integration was Stripe’s $1.1 billion acquisition of stablecoin company Bridge in October.

The purchase was one of the largest acquisitions in crypto and digital assets history, but it also exemplified financial services providers’ growing belief that stablecoins are here to stay.

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A wave of crypto regulations is set to take effect worldwide, and Circle has announced that USDC is the first digital asset to reach compliance with Canada’s new stablecoin laws.

The Canadian Securities Administrators has passed a set of standards defining Value-Referenced Crypto Assets (VCRA), which will go into effect next year. These laws describe VRCA as a crypto asset that maintains a stable valuation by referencing the value of a fiat currency or other asset.

The new rules require all crypto exchanges in Canada to delist any stablecoins that aren’t compliant with the regulations by December 31. Circle said that it has not only met the VCRA requirements, but that it has also reached full compliance with the Ontario Securities Commission.

“Circle is taking steps in the right direction,” said Joel Hugentober, Cryptocurrency Analyst at Javelin Strategy & Research. “Tether is so large because everyone outside of North America uses it. Circle’s partnership with Coinbase, coupled with it becoming compliant in other jurisdictions, gives them a leg up.”

The Race for Market Share

Tether’s global dominance has made its USDT stablecoin the dominant product in the market, holding a $201.2 billion share compared to USDC’s $40.3 billion. These two coins face plenty of competition in the race to dominate a stablecoin market that saw a 10% increase in November alone, with monthly trading volumes nearing $2 trillion.

Institutional investments are fueling this momentum, with some of the largest payments players now joining in. PayPal recently launched its PYUSD stablecoin, and Stripe just acquired stablecoin company Bridge in one of the largest acquisitions in crypto history.

With so many digital tokens that track the U.S. dollar, there has been much speculation about which stablecoin will win out.

“At the end of the day, they’re all pretty much the same product, but they’re not managed the same,” Hugentobler said. “If Circle continues to gain compliance in other jurisdictions, retail users will likely jump ship because their platform faces less risks. A lot of institutions prefer USDC over Tether currently, and this trend will continue as well.”

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Tether, the producer of the highly successful USDT stablecoin, has announced the launch of its long-awaited tokenization platform.

The new service, Hadron, will create digital copies of real-world assets like stocks, bonds, and commodities on blockchains. In addition, the platform could enable the conversion of assets like loyalty points or other stablecoins. Hadron will also support “basket-collateralized products,” allowing organizations to combine commodities or other assets into a single token.

“Tether’s USDT, which has nearly a $100 billion greater market cap than the next stablecoin, Circle’s USDC, is so active throughout the industry and now they are pushing to innovate in the tokenization space,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research.

“Tether is much more prominent outside of the United States, so I would imagine other countries will leverage Tether’s platform first, to tokenize assets specific to their jurisdiction,” he said. “Circle and other stablecoin issuers will need to expand their services to compete in this fast-paced, evolving industry.”

Building on Success

Hadron will include tools to help organizations manage risks and conduct Know Your Customer and anti-money laundering checks. According to CoinDesk, Hadron will initially support Ethereum, Avalanche, and Liquid by Blockstream, but plans to add support for the TON network and other smart contract chains.

Tether’s USDT has reached a market capitalization of $127.3 billion, leading an accelerating stablecoin market that has seen a multitude of new offerings. Building on that success, the crypto firm has launched a token that tracks the price of gold. Tether has also proposed a token to the Turkish government that would track the price of boron, a mineral used in the manufacture of everything from fertilizers to cleaning agents.

Driving the Future

The company’s new platform could surpass all these endeavors, as the tokenization industry has the potential to be a market worth trillions of dollars. Tokenization has become a central focus for institutional investors who recognize the powerful benefits the technology offers.

Tokenized assets have also been at the heart of several initiatives by world governments. The technology was recently spotlighted by the Bank of England as one of the key innovations that will drive the future of the financial industry.

The post Tether to Expand Beyond Stablecoins with Tokenization Service appeared first on PaymentsJournal.

Robinhood, Galaxy Digital, and Kraken will collaborate on a network to support Paxos’ newly launched stablecoin, USDG.

The consortium of crypto companies said the Global Dollar network is designed to accelerate worldwide stablecoin adoption. USDG is currently available only on the Ethereum blockchain, though Paxos said the stablecoin could be available on other blockchains soon.

“The collaboration between this list of partners is impressive,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “These firms are taking an approach that is more like Tether than Circle. They are launching USDG out of Singapore, because there is a greater serviceable addressable market outside of the U.S. right now.”

A Crowded Field

Paxos said USDG is compliant with the Monetary Authority of Singapore’s stablecoin framework, which was established last year. The stablecoin is backed one-to-one with the U.S. dollar in deposits, short-duration U.S. government securities, and other cash equivalents. The company’s USDG reserve will be held and managed at DBS Bank, Singapore’s largest financial institution.

The stablecoin is joining a crowded field dominated by Tether’s USDT and Circle’s USDC. Paxos also offers its Pax Dollar, and the company manages PayPal’s PYUSD stablecoin, which has quickly reached a $1 billion market cap.

A Golden Age

The multitude of use cases for stablecoins has fueled the surge in offerings, so much so that the digital assets could be on the cusp of a golden age. There are especially promising stablecoin use cases in cross-border payments and in countries with more volatile fiat currencies.

“Comparatively, the U.S. economy is doing well,” Hugentobler said. “There are relatively low rates of inflation, it is easy access to the dollar (world reserve currency), and there are dozens of ways to send payments and transact. That isn’t the case in many countries around the globe.  This backs our thesis at Javelin that stablecoins will continue to grow and provide a great alternative to traditional fiat currencies, particularly in areas with economic uncertainty.”

He added: “However, Tether and Circle have dominated most of the world’s stablecoin market share, so there are plenty of challenges ahead for the Global Dollar network.”

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Even as bitcoin surges in values and institutional investors move heavily into crypto, widespread adoption of digital currencies as a mainline payment vehicle remains on a distant horizon. Then there are stablecoins. These programmable digital currencies are coming into their own, as their resistance to volatility and ability to be programmed in transactions open up a range of compelling use cases. 

In a new report, Stablecoins and the Path to Innovative Money Movement, Javelin Strategy & Research Analyst/Content Specialist Craig Lancaster examines the world of service providers who are rising up to help financial services implement stablecoin programs. He also explores the use cases for stablecoins, which are now mostly apart from consumer payments, although this is expected to change dramatically.

The Stablecoin Moment

Stablecoins are having a moment right now, in part because of the major players that have entered this landscape. Tether and Circle remain far and away the leaders, but PayPal made a big splash when it introduced its own currency last year. JPMorgan Chase, MasterCard, Visa, and other major financial institutions are offering stablecoins programs of various kinds.

“If you’re a player in these in these areas and you’re not developing a stablecoin program, you’re missing something,” Lancaster said.

The most popular and useful stablecoins are generally pegged one-to-one to an underlying asset, like the U.S. dollar. That makes them less prone to volatility and more suitable for a variety of payment use cases.

“The holder of it essentially holds the dollar,” Lancaster said. “You can store value with it, and you can employ it in a transaction.  In a country with a currency that is not at all stable, an asset like the U.S. dollar is highly desired.”

Developing Use Cases

The most compelling present-day use cases for stablecoins reside in commercial payments, closed-loop payment ecosystems, and stored value for investors. Consumer-facing use cases for stablecoins and other cryptocurrencies have been slower to develop, but as decentralized finance and legacy systems of money movement increasingly intermingle, consumer adoption should rise.

Using stablecoins for cross-border payments is one highly promising use case. These have long been historically difficult transactions that are opaque, slow, and costly. They incur fees at each step of the old correspondent banking system and can be made more complex by fluctuating exchange rates. Stablecoins stand to alleviate many of these problems.

There are other potential use cases as well. “Any kind of lending that involves escrow is ripe for stablecoins,” Lancaster said. “They’re programmable and stable, which is good news for anyone who sweated out a house purchase, and all the liquidity issues and risk that go along with that. You can transform that by essentially programming the money, so when the thresholds and criteria are met, it funds the loan and completes the transaction.”

Stablecoin as a Service

An entity looking to create a branded stablecoin will often engage a service provider for the underlying design and architecture. PayPal worked with blockchain technology provider Paxos to design and develop its PayPal USD stablecoin, which reached a $1 billion market cap little more than a year after launch. Stablecoin service providers, such as Paxos and Netherlands-based Quantoz, provide the technological underpinning and know-how to administer stablecoin programs.

One area that has been especially fertile for stablecoin-as-a-service operations has been loyalty programs. Through branded stablecoins, companies can use blockchain technology to gain better insights into who their customers are and engage them in ways that are more effective than legacy loyalty programs. This allows companies to let the architecture work in the background while customers reap the benefits on the front end.

Like branded reward cards, through which consumers pick an airline, hotel chain, or retailer, this raises the potential for stablecoins to fade into the background and turn into loyalty points. Starbucks holds over $1 billion of customers’ money in its app, and one could easily imagine Walmart or Amazon entering the fray. Target’s successful RedCard program could be replicated with a stablecoin by anyone with a loyal customer base, driving revenues away from the card companies.

“Stablecoin-as-a-service providers can be a big help in getting those conceived and launched,” Lancaster said. “Take a lesson from banking as a service, which has gotten a little battered lately because of compliance issues. You might be able to outsource the compliance, but it’s all going to roll back to your door if there’s a problem. We urge companies to adopt the most stringent regulatory compliance stance as a starting point. If you’re compliant with the most stringent regulations, you’re compliant with all of them.”

Regulatory Concerns

Regulation, particularly in the United States, remains challenging at best and inscrutable at worst. This is to the detriment of companies that wish to explore the space, as well as to the consumers and commercial enterprises that could benefit from innovation.

Clarity is coming in other parts of the world, however, and that inspires some hope that a course can be charted here. There is still no guarantee that even the most scrupulous participant in stablecoins will not run afoul of regulators in the short term. Despite the likelihood of regulatory overreach, Lancaster predicts that stablecoins are an inevitable part of the future of financial technology.

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