How Stablecoins Are Rewiring Global Payment Rails
What Are Stablecoin Payments and How Do They Work?
A stablecoin is a digital cryptocurrency that maintains a stable value by being pegged to another asset, typically at a 1:1 ratio with fiat currencies like the US Dollar.
Stablecoins come in three flavors:
Fiat-backed: The most common type, where every digital coin is backed by real dollars in a bank. USDC (Circle’s $42B giant) and Tether dominate here.
Crypto-collateralized: These use other cryptocurrencies as collateral, often overcollateralized to absorb market swings. DAI is the poster child, surviving even crypto winters thanks to Ethereum-backed reserves.
Algorithmic: These rely on code to balance supply and demand—no collateral required. TerraUSD’s infamous 2022 collapse left this category with trust issues (and <1% market share).
So how do they work? Stablecoins live on blockchains like Ethereum or Solana, remitting payments globally in seconds. Take PayPal’s PYUSD: launched on Solana in 2024, it handles transactions at $0.01 fees and processes $25M of daily payments as of Jan-2025.
In short: stablecoins merge crypto’s speed with traditional finance’s stability. No bank hours, no middlemen—just you, your phone, and a global payment network that doesn’t sleep.
Advantages Over Legacy Payment Systems
Speed and Efficiency
Stablecoins settle transactions in seconds, bypassing the delays of systems like SWIFT or ACH, which can take days. For example, PayPal’s PYUSD on Solana processes payments instantly. By contrast, traditional cross-border transfers often face intermediary banks and time zone hurdles.
Lower Costs
Stablecoin transaction fees are negligible—often pennies (or less on some blockchains)—compared to the 2-3% fees charged by credit cards or the steep costs of international wire transfers. Merchants save significantly, but users also benefit indirectly through reduced prices.
Financial Inclusion
Over a billion adults globally lack access to traditional banking. Stablecoins require only a smartphone, making them critical in regions with unstable financial systems or geopolitical instability. They bypass credit checks and paperwork, offering a lifeline to the unbanked.
Transparency and Security
Every stablecoin transaction is recorded on a public blockchain, reducing fraud risks. Transactions are fully auditable and provide in-depth data for analytical insights. Regulated options like USDC comply with anti-money laundering (AML) standards, offering accountability that cash or opaque banking systems can’t match.
24/7 Availability
Stablecoins operate round-the-clock, unlike banks that close on weekends or holidays. This is transformative for global businesses, freelancers, and remittance-dependent families needing real-time settlements.
Stablecoins combine the reliability of traditional finance with the innovation of blockchain. The gap between old and new will only widen as adoption grows.
Traction to Date - Corporate Adoption
The rapid corporate adoption of stablecoin infrastructure highlights a strategic pivot toward blockchain-based payments. Recent high-profile acquisitions and partnerships underscore this shift.
Key Deals and Rationale
Stripe’s $1.1B Acquisition of Bridge
Rationale: Stripe sought to future-proof its business against disruption by integrating stablecoin capabilities. Bridge’s API infrastructure simplifies stablecoin adoption for enterprises, enabling instant cross-border settlements, compliance automation, and fiat-stablecoin conversions. For Stripe, this accelerates its "Pay with Crypto" strategy and positions it to serve clients like SpaceX, which uses Bridge for global treasury management
Implications: The deal signals that traditional fintech firms view stablecoins as critical to maintaining relevance. By acquiring Bridge, Stripe aims to dominate the emerging tokenized payments ecosystem, challenging legacy systems like SWIFT and ACH.
MoonPay’s $175M Acquisition of Helio
Rationale: MoonPay, a leading crypto on-ramp (i.e., fiat to crypto conversions), acquired Helio to expand into merchant payment processing. Helio’s Solana-based checkout tools allow businesses to accept crypto (e.g., USDC, SOL) with instant settlement and near-zero fees, serving over 6,000 merchants. The acquisition merges MoonPay’s user base with Helio’s e-commerce infrastructure, creating an end-to-end crypto payment solution.
Implications: This consolidation reflects crypto’s push toward mainstream commerce. By integrating Helio, MoonPay can onboard non-crypto-native merchants, bridging the gap between decentralized finance and everyday transactions.
PayPal’s PYUSD Expansion on Solana
Rationale: PayPal launched its stablecoin PYUSD on Ethereum in 2023 but migrated to Solana in 2024 for faster transactions and lower fees. Solana’s scalability allows PYUSD to dominate cross-border remittances and retail payments.
Implications: PayPal’s move validates blockchain scalability as critical for mass adoption. Competitors like Block (Square) are now pressured to enhance their crypto offerings, accelerating industry-wide innovation.
Roadblocks to Mainstream Adoption - Regulatory Barriers and the Trump-Era Shift
Stablecoins have made strides, but regulatory uncertainty and consumer habits remain key hurdles. The Trump administration’s policy shifts are easing some barriers while introducing new complexities.
Traditional Regulatory Challenges
Under the Biden administration, regulatory ambiguity dominated. The SEC aggressively classified many crypto tokens as securities through enforcement actions, creating a climate of fear. For example, SEC Chair Gary Gensler’s crackdown led to over 170 crypto-related lawsuits since 2015, targeting giants like Coinbase and Binance. Rules like SAB 121 forced banks to treat custodied crypto as liabilities, inflating capital costs and discouraging crypto services. Similarly, the SEC’s expanded “dealer rule” threatened decentralized protocols with impossible compliance demands.
Globally, fragmented regulations—such as the EU’s MiCA framework versus U.S. state-level rules—complicated cross-border transactions. Meanwhile, Biden’s exploration of a U.S. central bank digital currency (CBDC) positioned it as a competitor to private stablecoins.
The Trump Administration’s Regulatory Pivot
The Trump era has brought a pro-innovation stance. Key changes include:
SEC Task Force: Led by crypto-friendly Commissioner Hester Peirce, this group prioritizes clear rules over enforcement, easing token classification uncertainty.
Repeal of SAB 121: This rule was repealed on January 23rd, 2025.
Anti-CBDC Position: President Trump issued an executive order on January 23rd, 2025 banning the establishment of Central Bank Digital Currencies (CBDCs) in the United States.
Legislative Momentum: The Clarity for Payment Stablecoins Act, once stalled, now has bipartisan support and could pass in 2025, creating a federal licensing regime.
New Whitehouse Position - AI & Crypto “Czar”: David Sacks brings a Silicon Valley mindset to Washington. A key member of the PayPal Mafia, Sacks has long advocated for reduced tech regulation and blockchain innovation. His policy priorities are expected to include deregulation, pro-innovation policies and an anti-CBDC stance. Sacks is also a vocal investor in Solana, the blockchain of choice for PayPal’s stablecoin and others alike. His role could influence Solana friendly policies.
These shifts have already spurred corporate adoption. In October 2024, Visa launched the Visa Tokenized Asset Platform (VTAP), a comprehensive system enabling banks to create and manage stablecoins and other tokenized assets.
Persistent Challenges
Despite progress, roadblocks remain:
User Incentives: Credit cards dominate due to rewards (e.g., 1–5% cashback), while stablecoins lack consumer perks. Startups like Fold and Lolli are testing cashback-in-crypto models, but adoption is nascent.
Technical Complexity: Wallet setup and private key management deter non-tech users. Only ~10% of global merchants accept crypto payments.
Global Trust Gaps: Depegging incidents (e.g., USDC’s 2023 drop to $0.87) linger in public memory. Transparent reserves and audits are critical.
AI x Stablecoins
The World Economic Forum highlights the transformative potential of stablecoins and AI convergence, particularly in enabling an "agentic economy" where autonomous AI agents transact seamlessly. In its 2025 analysis, the WEF emphasizes that stablecoins serve as the ideal medium for AI-driven systems due to their programmability, near-instant settlement, and borderless fluidity. This ‘agentic’ economy will be built on blockchain-intermediated value exchange, with stablecoins used as the principal medium of exchange. AI agents can leverage stablecoins to execute microtransactions, collaborate with other agents, and access real-time resources without traditional intermediaries.
Programmable smart contracts, a core feature of stablecoins, allow AI agents to automate complex workflows. For instance, the WEF cites examples like dynamically adjusting parametric insurance payouts (which offer pre-determined payouts triggered by loss-making events) for farmers in emerging markets. The WEF also notes that stablecoins dissolve friction in value exchange, unlocking markets for granular assets—such as selling 10 seconds of traffic data or renting idle compute power—which AI agents can monetize at scale.
Predictions and Future Opportunities
The next decade will define stablecoins’ role in global finance. While hurdles remain, technological, regulatory, and market trends point to transformative growth. Here’s what to expect:
1. Mainstream Adoption Accelerates
Stablecoins will transition from niche crypto tools to everyday payment solutions. Traditional banks, facing pressure from fintech disruptors, will integrate stablecoins into their systems—notably for instant settlements and treasury management. Visa’s recent pivot to stablecoin-based B2B payments signals this shift.
2. Regulatory Clarity Unlocks Institutional Capital
The Clarity for Payment Stablecoins Act, likely to pass under the Trump administration, will establish a federal licensing framework. This will attract institutional investors, with asset managers like BlackRock and Fidelity expected to launch yield-generating stablecoin products. Compliance-focused issuers (e.g., Circle’s USDC) will do well.
3. DeFi and Stablecoin Synergy Deepens
Decentralized finance (DeFi) protocols will increasingly leverage programmable stablecoins for automated lending, insurance, and derivatives. For example, yield-bearing stablecoins could disrupt savings accounts, offering 5-7% APY without traditional banks.
4. Emerging Markets Drive Growth
Regions with volatile currencies or underdeveloped banking infrastructure—Latin America, Africa, Southeast Asia—will adopt stablecoins for daily transactions. Brazil’s Pix payment system (allows users to transfer money between accounts instantly, 24/7, using simple identifiers like phone numbers or email addresses) and Nigeria’s crypto-friendly policies hint at this future.
Key Investment Opportunities
Infrastructure: Custody solutions, fraud detection tools and components required to bridge traditional payment rails with crypto rails.
Consumer Incentives: Startups blending stablecoins with loyalty programs (e.g., cashback in USDC).
Cross-Border Solutions: Remittance solutions leveraging stablecoins’ low fees.
Platforms for Enterprises: Simplify enterprise operations via API integration, compliance automation, and regulatory alignment for seamless adoption.
Risks to Monitor
Geopolitical Fragmentation: Conflicting regulations (e.g., U.S. deregulation vs. EU’s MiCA) may splinter the market, though it is likely western economies will move in lockstep with the US.
Central Bank Pushback: CBDCs, though stalled in the U.S., could gain traction in China and Europe, competing with private stablecoins.
The Bottom Line
For investors, the message is clear: bet on infrastructure, compliance, and markets where traditional finance falls short.