Here come the stablecoins

Stablecoins are the talk of Wall Street thanks to a wave of recent favorable crypto regulatory activity, especially the landmark bill GENIUS Act, which became law after President Donald Trump signed it in July. These events come after years of concerted lobbying by the crypto industry to get recognition in Washington, D.C., as a legitimate player in finance. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act adds to stablecoins-friendly regulation across the world. Others include: The European Union's MiCA crypto regulation, which kicked in for stablecoins in June 2024; Hong Kong's Stablecoins Ordinance, whose strict KYC rules have met a wary industry reception; and The United Kingdom’s upcoming launch of its stablecoins framework in 2026. [caption id="attachment_57381540" align="aligncenter" width="800"] (Courtesy/Canva)[/caption] Industry snapshot Stablecoins are a levelheaded take on the crypto industry. With cryptocurrencies exhibiting unpredictable price behavior, stablecoins take the best of crypto — its security, privacy and speed — and combine it with the stability of fiat. Stablecoins have grown in leaps and bounds since the pioneering but now defunct BitUSD, which launched in 2014. By August 2025, the market exceeded $250 billion, with British bank Standard Chartered expecting this figure to climb to $2 trillion by 2028. Tether ’s USDT and Circle ’s USDC, with market caps of over $160 billion and $60 billion, respectively, are the leaders in the niche. Wall Street wants in No doubt the growth forecast by Standard Chartered will be fueled by traditional finance (TradFi) players getting in on the action. This year's second-quarter earnings calls showed banks are paying attention to stablecoins. The following financial institutions addressed their plans regarding the technology: BNY Mellon ; State Street ; Citi ; JPMorgan ; and Visa . This is partly because TradFi must catch up with crypto, which has deployed and proven stablecoins as an inevitable future of finance. As Mike Hudack , chief executive of crypto ramp Sling Money , told Bank Automation News , “In the future, you can expect the entire financial system — or, at least, payments — to run on stablecoins.” The development is also buoyed by the regulatory clarity from the GENIUS Act, which “sets the rules of the game,” Daniel Haisley , chief product officer at digital banking solutions provider Apiture , said. “In the future, you can expect the entire financial system — or, at least, payments — to run on stablecoins.” — Mike Hudack , chief executive of crypto ramp Sling Money Speed and affordability Stablecoins began as a way for crypto traders to sidestep the volatility of crypto. Over time, they evolved past this as their ability to facilitate faster and cheaper settlements — thanks to blockchain — became apparent. As stablecoins become more integrated into finance, customers will naturally gravitate toward their speed and affordability. This convenience is worlds apart from the often steep fees that come with traditional payments, especially overseas transfers. Hudack said stablecoins will be “especially great” at two types of payments: High-friction payments like international transfers, and Low-margin payments like micropayments or small subscriptions that credit cards aren’t built for. Risks and challenges Though stablecoins solve for speed and cost, they still come with their fair share of challenges. One is the risk of de-pegging, when a stablecoin’s value differs from its tracked asset, which is what happened with the collapse of algorithmic stablecoin TerraUSD . In 2022, TerraUSD lost its peg to the U.S. dollar when the asset crashed from $1 to $0.02, resulting in hundreds of billions wiped off the market and investors’ pockets. There's also a risk to customers. Stablecoins don’t have the same level of user protection as standard payment cards, leaving customers with little recourse if they lose money. Also, since many traditional financial players generate significant revenue from the friction and delays inherent to traditional money transfers, stablecoins could shrink margins for banks and other institutions. Future of stablecoins Major jurisdictions are moving forward with stablecoin regulations, making it clear that it's not a question of whether stablecoins will play a role in mainstream finance, but how significant their role will be. The currently favorable regulatory landscape signals a “green light for financial institutions and service providers to enact their stablecoin strategies — whether offensive or defensive,” said Apiture’s Haisley. Institutions can either be “fast followers,” he said, and watch from the sidelines as market momentum develops, or “select initial use cases and establish partnerships to grasp for a first mover's advantage.”

Here come the stablecoins

Stablecoin market could climb to $2T by 2028, Standard Chartered says

Nubank using AI for underwriting, customer service

Inside KeyBank’s fintech investment strategy

Related Posts

FIs deploy AI to fight digital-asset related fraud

Mastercard chief digital officer on scaling its Agent Pay solution

Podcast: Reimagining payment experiences with agentic AI

Inside KeyBank’s fintech investment strategy

Stay Informed with Our Newsletters

EMERGING FINTECH DIRECTORY

The Buzz Podcast

SPONSORED

Hiding in Plain Sight: How to Use Data to Spot Consumer Accounts Being Used by Small Businesses

Is Your Cash-Handling Infrastructure Ready for the New U.S. Banknotes?

Just Released! 2025 Strategy Benchmark

Connect

Welcome Back!

Retrieve your password