Brief

From Niche to Utility: Stablecoins Move toward the Financial Mainstream

Widespread adoption depends on regulatory clarity, a compelling value proposition, and seamless integration with legacy systems.

Douglas Kurdziel, Ricardo Correia, Thomas Olsen, Mike Baxter, and Philipp Grimmig

First published on апреля 29, 2025
min read


Резюме Stablecoins have expanded to become one of the largest holders of US Treasury securities, and they are poised to take on a greater role. To date, regulation has not provided sufficient clarity for widespread adoption in traditional payment and settlement use cases, but it is quickly evolving in the US, EU, and other key jurisdictions. New regulatory frameworks, combined with the technical characteristics of stablecoins, could catalyze changes in the market structure for money movement, with implications for governments, banks, merchants, technology platforms, and digital wallets. These changes could enable new businesses to disrupt traditional use cases, the economics of major payment flows, cards and checking accounts, and primary relationships with customers. Stablecoins are having a headline moment as US legislators turn their attention to clarifying the rules of the game. But in fact, a number of prominent companies have for years been expanding their stablecoin holdings and uses around the globe, especially outside the US. Stablecoin issuers have become one of the largest holders of US Treasury securities (see Figure 1). And the supply of stablecoins has risen sharply over the past five years (see Figure 2). Figure 1 Stablecoins have become a large holder of US Treasurys Notes: Estimated international holdings of US Treasury marketable and nonmarketable bills, bonds, and notes as reported by the US Department of the Treasury (January 2025); Tether holds about $116 billion in US Treasurys and Treasury-related instruments; Circle holds about $50 billion in US Treasurys and Treasury repurchase agreements Sources: US Department of the Treasury (January 2025); Tether Auditors’ Reports on the Reserves (December 2024); Circle Reserve Fund Attestation (February 2025) Figure 2 The supply of stablecoins has gone from $2 billion to more than $200 billion in recent years Notes: Illustration excluding smaller US dollar–denominated stablecoins as well as non–US dollar stablecoins; average supply of stablecoins refers to coins in circulation directly tied to the reserve assets backing them to maintain their price stability Source: Visa Onchain Analytics Dashboard (as of April 2025) Stablecoins are a type of digital asset with special characteristics. They’re typically pegged to a fiat currency and backed by pooled currency reserves or other high-quality liquid assets held in financial institutions (such as short-term Treasurys), which allows them to maintain a stable value. They’re issued by banks or private nonbank entities, operating under money transmitter regulations. And they’re typically distributed and transferable over blockchain networks. Lack of clear, comprehensive regulation previously limited the regulated financial services industry globally from using stablecoins. Now that outlook has changed and triggered offerings in private blockchain projects or public stablecoins from regulated entities such as PayPal, Stripe, and other major financial firms. The US Congress is debating regulation of stablecoin issuers, covering reserve backing, liquidity requirements, consumer protections, and anti-money–laundering and know-your-customer (AML/KYC) provisions. Should US regulation emerge from Congress, it could close the gap in regulatory clarity with other countries. The EU’s Markets in Crypto-Assets Regulation, United Arab Emirates’ Payment Token Services Regulation, and the Monetary Authority of Singapore’s stablecoin regulatory framework have been in place since 2023 and 2024, with similar high-level regulatory requirements. Yet no global standard has emerged, and no single regulator has comprehensive authority over stablecoin issuers today, which thus operate under diverse charters and contend with many areas of uncertainty. Regulatory clarity will open the door to broader opportunities, notably around asset transfers and settlements. Reconciliation of business payments, for instance, could be done almost instantaneously at any time, instead of taking days for clearance or being limited to certain windows of availability such as bank working days. Early use cases have shown promise, including global remittances, internal branch-to-branch or book transfers for banks, or intercompany settlements that are faster and less costly than straight wire transfers. However, challenges remain in deploying stablecoins for more consumer-facing use cases. Simplifying and improving customers’ experiences will be essential to expanding the technology throughout financial systems. In that respect, the rise of stablecoins is analogous to the period when digital payment wallets emerged. These wallets differed only slightly (technically speaking) from physical cards. Yet they had to overcome barriers to adoption, including consumer skepticism, build-out of in-store infrastructure, and lack of back-end network and customer support. The market structure had to develop incrementally over time. Prominent use cases to date Stablecoins’ unique value proposition includes several elements that can generate positive customer and business experiences. Speed: Use of blockchains allows near instant transfer and settlement speeds, significantly faster than existing rails such as Swift, which for complex cases can take one or two days. Cost: Some transactions can be considerably less expensive as they bypass certain intermediaries. Programmability: Stablecoins can leverage smart contract technology to enable automated payments based on predefined conditions and events. Interest provision: Some stablecoins are becoming tokenized money market funds and therefore could provide value as an interest-bearing asset. (Note, though, that interest is currently prohibited by US regulators for stablecoins used as payment.) Transparency and auditability: Stablecoins allow for real-time tracking of transactions and, in many cases, reserves. This transparency can improve trust relative to traditional banking systems. Interoperability: Stablecoins can be used in different platforms, wallets, and blockchain networks, enabling integration between traditional and decentralized financial systems. Incumbent companies have already begun to implement stablecoin use cases (see Figure 3). Business-to-business payments and settlement is a major area of activity, with Circle, J.P. Morgan, and Société Générale piloting stablecoin-based solutions in round-the-clock liquidity and global payments. Companies targeting this stream of offerings will need to determine which regions, flows, and types of buyers and sellers to target. Figure 3 Companies are expanding their participation in the stablecoin ecosystem Source: Bain analysis In remittances and cross-border transactions, companies such as Stripe use stablecoins to cut costs and settlement time. Note, though, that much of the current process delay relates to AML/KYC and risk concerns, and the relevant controls and compliance regimes will remain with stablecoins. Still, stablecoins could streamline the experience and reduce costs. For everyday transactions, platforms, including Visa and Shopify, have begun using two prominent stablecoins—namely, Circle’s USDC and PayPal’s PYUSD. A significant challenge to broad adoption here will be delivering a clear and compelling value proposition, overcoming customers’ initial unfamiliarity, skepticism, or their allegiance to loyalty point and reward programs—perhaps by offering discounts for stablecoin use. Finally, new rails such as J.P. Morgan’s Kinexys support tokenized money market funds, bonds, and programmable payments. How participants may be affected Looking across the financial system, stablecoins could have varying effects. Banks may see opportunities to streamline expensive processes, such as fund transfers, while at the same time needing to defend their deposit bases against the potential migration of deposits to stablecoins held in custody by other companies on behalf of nonbank issuers. Payment rails and networks may experience greater competition for some use cases, including cross-border transactions. This could erode volumes and profit margins in high-return areas such as foreign exchange. Technology platforms have an opportunity to enhance offerings, such as private payment ecosystems linked to digital wallets or social media accounts. They could consider minting their own stablecoins as currencies to which they attach rewards or merchant incentives. Nonbank payment companies might improve their economics via reduced transaction costs, faster and more efficient cross-border payments, and demand for new products. Corporates may issue their own stablecoins in order to develop closed-loop payment and loyalty ecosystems or use third-party stablecoins to develop new ways to enhance customer loyalty. For instance, a merchant could drop personalized tokens into a customer’s stablecoin wallet in the form of a discount on certain products. Nonbank financial institutions might first find process savings. As adoption spreads, they might cultivate the intersections between stablecoins and other asset-backed tokens for savings products. Money market fund tokens can also improve the efficiency of collateral management and liquidity. For customers, much of stablecoins’ presence could wind up in back-end networks and therefore not be noticed by consumers or even businesses. They might simply see their money moving at high speed and low cost, rather than knowing how it moves. As stablecoins evolve, banks, payment companies, and technology platforms will want to monitor and evaluate the forces driving market adoption. Above all, stablecoins’ value proposition must be compelling for consumers, businesses, or financial institutions relative to the status quo. The rate of adoption will also be dependent on companies solving issues around errors, fraud, chargebacks, and returns that are already well addressed by the existing payments networks. Despite the recent focus by regulators, many questions still must be answered, so uncertainty remains a constraint for full institutional adoption in the US. Any new regulation should address consumer protection and legal classification gaps around issues such as fraud. And globally, cybersecurity and compliance will have to be better aligned and should scale up to meet regulatory scrutiny and consumer expectations of trust. Signposts to guide next steps Similar to many other technologies, unlocking stablecoins’ full potential over the coming years will require continued education and development, as well as further integration with existing systems in banking, payments, and settlements. Companies that want to participate will need to develop solid, detailed plans on three fronts: a clear strategy for their target use cases, a blueprint for integrating with their existing infrastructure and core systems, and a path to adding differentiation and a clear and compelling value proposition for customers. To keep ahead of potential near-term scenarios, companies should monitor a useful set of signposts: What clarifications will future regulations bring on interest rate frameworks and consumer protections? Which national or global mandates will enable or discourage adoption? Which innovations will yield incremental value, and for which use cases and parts of the value chain? What technology developments will make stablecoins more attractive to traditional financial firms, merchants, and consumers? What ecosystems are emerging that remove silos, enable seamless interoperability, and foster exchange of stablecoins and digital assets more broadly? What moves will banks, big technology firms, payment companies, and other participants make? Which use cases and related metrics will best signal merchant and consumer adoption? What risks, such as liquidity fragmentation, operational outages, or financial instability, could arise from widespread stablecoin use? Stablecoins’ future is far from certain at this point. But they can flourish if regulatory support and private investment combine to create a market structure for products that improve customers’ financial lives.

Резюме

Stablecoins have expanded to become one of the largest holders of US Treasury securities, and they are poised to take on a greater role.
To date, regulation has not provided sufficient clarity for widespread adoption in traditional payment and settlement use cases, but it is quickly evolving in the US, EU, and other key jurisdictions.
New regulatory frameworks, combined with the technical characteristics of stablecoins, could catalyze changes in the market structure for money movement, with implications for governments, banks, merchants, technology platforms, and digital wallets.
These changes could enable new businesses to disrupt traditional use cases, the economics of major payment flows, cards and checking accounts, and primary relationships with customers.

Stablecoins are having a headline moment as US legislators turn their attention to clarifying the rules of the game. But in fact, a number of prominent companies have for years been expanding their stablecoin holdings and uses around the globe, especially outside the US. Stablecoin issuers have become one of the largest holders of US Treasury securities (see Figure 1). And the supply of stablecoins has risen sharply over the past five years (see Figure 2).

visualization — Stablecoins have become a large holder of US Treasurys

Stablecoins are a type of digital asset with special characteristics. They’re typically pegged to a fiat currency and backed by pooled currency reserves or other high-quality liquid assets held in financial institutions (such as short-term Treasurys), which allows them to maintain a stable value. They’re issued by banks or private nonbank entities, operating under money transmitter regulations. And they’re typically distributed and transferable over blockchain networks.

Lack of clear, comprehensive regulation previously limited the regulated financial services industry globally from using stablecoins. Now that outlook has changed and triggered offerings in private blockchain projects or public stablecoins from regulated entities such as PayPal, Stripe, and other major financial firms. The US Congress is debating regulation of stablecoin issuers, covering reserve backing, liquidity requirements, consumer protections, and anti-money–laundering and know-your-customer (AML/KYC) provisions.

Should US regulation emerge from Congress, it could close the gap in regulatory clarity with other countries. The EU’s Markets in Crypto-Assets Regulation, United Arab Emirates’ Payment Token Services Regulation, and the Monetary Authority of Singapore’s stablecoin regulatory framework have been in place since 2023 and 2024, with similar high-level regulatory requirements. Yet no global standard has emerged, and no single regulator has comprehensive authority over stablecoin issuers today, which thus operate under diverse charters and contend with many areas of uncertainty.

Regulatory clarity will open the door to broader opportunities, notably around asset transfers and settlements. Reconciliation of business payments, for instance, could be done almost instantaneously at any time, instead of taking days for clearance or being limited to certain windows of availability such as bank working days.

Early use cases have shown promise, including global remittances, internal branch-to-branch or book transfers for banks, or intercompany settlements that are faster and less costly than straight wire transfers. However, challenges remain in deploying stablecoins for more consumer-facing use cases. Simplifying and improving customers’ experiences will be essential to expanding the technology throughout financial systems.

In that respect, the rise of stablecoins is analogous to the period when digital payment wallets emerged. These wallets differed only slightly (technically speaking) from physical cards. Yet they had to overcome barriers to adoption, including consumer skepticism, build-out of in-store infrastructure, and lack of back-end network and customer support. The market structure had to develop incrementally over time.

Prominent use cases to date

Stablecoins’ unique value proposition includes several elements that can generate positive customer and business experiences.

Speed: Use of blockchains allows near instant transfer and settlement speeds, significantly faster than existing rails such as Swift, which for complex cases can take one or two days.
Cost: Some transactions can be considerably less expensive as they bypass certain intermediaries.
Programmability: Stablecoins can leverage smart contract technology to enable automated payments based on predefined conditions and events.
Interest provision: Some stablecoins are becoming tokenized money market funds and therefore could provide value as an interest-bearing asset. (Note, though, that interest is currently prohibited by US regulators for stablecoins used as payment.)
Transparency and auditability: Stablecoins allow for real-time tracking of transactions and, in many cases, reserves. This transparency can improve trust relative to traditional banking systems.
Interoperability: Stablecoins can be used in different platforms, wallets, and blockchain networks, enabling integration between traditional and decentralized financial systems.

Incumbent companies have already begun to implement stablecoin use cases (see Figure 3). Business-to-business payments and settlement is a major area of activity, with Circle, J.P. Morgan, and Société Générale piloting stablecoin-based solutions in round-the-clock liquidity and global payments. Companies targeting this stream of offerings will need to determine which regions, flows, and types of buyers and sellers to target.

In remittances and cross-border transactions, companies such as Stripe use stablecoins to cut costs and settlement time. Note, though, that much of the current process delay relates to AML/KYC and risk concerns, and the relevant controls and compliance regimes will remain with stablecoins. Still, stablecoins could streamline the experience and reduce costs.

For everyday transactions, platforms, including Visa and Shopify, have begun using two prominent stablecoins—namely, Circle’s USDC and PayPal’s PYUSD. A significant challenge to broad adoption here will be delivering a clear and compelling value proposition, overcoming customers’ initial unfamiliarity, skepticism, or their allegiance to loyalty point and reward programs—perhaps by offering discounts for stablecoin use.

Finally, new rails such as J.P. Morgan’s Kinexys support tokenized money market funds, bonds, and programmable payments.

How participants may be affected

Looking across the financial system, stablecoins could have varying effects.

Banks may see opportunities to streamline expensive processes, such as fund transfers, while at the same time needing to defend their deposit bases against the potential migration of deposits to stablecoins held in custody by other companies on behalf of nonbank issuers.
Payment rails and networks may experience greater competition for some use cases, including cross-border transactions. This could erode volumes and profit margins in high-return areas such as foreign exchange.
Technology platforms have an opportunity to enhance offerings, such as private payment ecosystems linked to digital wallets or social media accounts. They could consider minting their own stablecoins as currencies to which they attach rewards or merchant incentives.
Nonbank payment companies might improve their economics via reduced transaction costs, faster and more efficient cross-border payments, and demand for new products.
Corporates may issue their own stablecoins in order to develop closed-loop payment and loyalty ecosystems or use third-party stablecoins to develop new ways to enhance customer loyalty. For instance, a merchant could drop personalized tokens into a customer’s stablecoin wallet in the form of a discount on certain products.
Nonbank financial institutions might first find process savings. As adoption spreads, they might cultivate the intersections between stablecoins and other asset-backed tokens for savings products. Money market fund tokens can also improve the efficiency of collateral management and liquidity.
For customers, much of stablecoins’ presence could wind up in back-end networks and therefore not be noticed by consumers or even businesses. They might simply see their money moving at high speed and low cost, rather than knowing how it moves.

As stablecoins evolve, banks, payment companies, and technology platforms will want to monitor and evaluate the forces driving market adoption. Above all, stablecoins’ value proposition must be compelling for consumers, businesses, or financial institutions relative to the status quo. The rate of adoption will also be dependent on companies solving issues around errors, fraud, chargebacks, and returns that are already well addressed by the existing payments networks.

Despite the recent focus by regulators, many questions still must be answered, so uncertainty remains a constraint for full institutional adoption in the US. Any new regulation should address consumer protection and legal classification gaps around issues such as fraud. And globally, cybersecurity and compliance will have to be better aligned and should scale up to meet regulatory scrutiny and consumer expectations of trust.

Signposts to guide next steps

Similar to many other technologies, unlocking stablecoins’ full potential over the coming years will require continued education and development, as well as further integration with existing systems in banking, payments, and settlements. Companies that want to participate will need to develop solid, detailed plans on three fronts: a clear strategy for their target use cases, a blueprint for integrating with their existing infrastructure and core systems, and a path to adding differentiation and a clear and compelling value proposition for customers.

To keep ahead of potential near-term scenarios, companies should monitor a useful set of signposts:

What clarifications will future regulations bring on interest rate frameworks and consumer protections?
Which national or global mandates will enable or discourage adoption?
Which innovations will yield incremental value, and for which use cases and parts of the value chain?
What technology developments will make stablecoins more attractive to traditional financial firms, merchants, and consumers?
What ecosystems are emerging that remove silos, enable seamless interoperability, and foster exchange of stablecoins and digital assets more broadly?
What moves will banks, big technology firms, payment companies, and other participants make?
Which use cases and related metrics will best signal merchant and consumer adoption?
What risks, such as liquidity fragmentation, operational outages, or financial instability, could arise from widespread stablecoin use?

Stablecoins’ future is far from certain at this point. But they can flourish if regulatory support and private investment combine to create a market structure for products that improve customers’ financial lives.