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For much of the past decade, cryptocurrency and traditional finance operated in parallel. Stablecoins, blockchain-based tokens pegged to fiat currencies, emerged in the cryptocurrency market as tools for liquidity and arbitrage. At the same time, banks and payment networks continued investing in modernizing legacy rails, with limited overlap between the two spheres.
That separation is now collapsing.
Cross-border payments represent a sprawling and inefficient market, with most transactions consisting of B2B flows. The inefficiencies in this system include multi-day settlement times, high fees, limited transparency and heavy reliance on intermediaries. Stablecoins offer a technical alternative capable of addressing these pain points — instantly settled transactions, lower costs, programmable transfers and global accessibility.
As executive commentary from the second quarter reveals, stablecoins are being embedded into the existing financial system not as substitutes for fiat money, but as digital settlement layers that can operate across borders more efficiently than traditional networks.
The distinction matters. This isn’t a wholesale replacement of global finance; it’s a technological competition around the means of settlement, with stablecoins offering a leaner architecture for moving money internationally.
Read more: Are Closed-Loop Financial Instruments the Future of Institutional Stablecoins?
Taken at face value, the convergence of clear regulatory policy in the United States, improving tech stacks and shifting market incentives is triggering a network effect when it comes to the apparent stablecoin opportunity.
The new competitive dynamic is forming along three primary vectors, per earnings commentary. First, incumbent payment networks (e.g., Visa and Mastercard) are expanding their infrastructure to include stablecoin capabilities. Second, FinTech platforms (e.g., PayPal, SoFi and Robinhood) are creating stablecoin-native products or issuing their own tokens.
“We are not just a bank, and not just a tech company — we’re a little bit of both,” SoFi CEO Anthony Noto said during the firm’s earnings call Tuesday (July 29), teasing plans including stablecoin issuance.
With a federal bank license in hand and new regulations under the GENIUS Act opening the door, SoFi said it has a structural advantage over pure-play crypto platforms. Think Western Union meets decentralized finance (DeFi), executives stressed.
Third, crypto-native firms, as well as traditional banks, are meeting the moment by investing in the infrastructure layer — custody, liquidity and compliance — that others will rely on.
“We see payments as the next big use case in crypto and believe that the majority of all payments in the economy will eventually run on stablecoin rails,” Coinbase CEO and co-founder Brian Armstrong said Thursday (July 31).
“One of the biggest areas we are focused on is B2B payments,” he added. “We think cross-border stablecoin payments is a $40 trillion opportunity, and B2B is 75% of that. It’s better if the sender and recipient both want to use the same stablecoin and actually the same underlying payment rail.”
See more: White House Report Says Stablecoins Will Keep Dollar Dominant
Despite stablecoins representing less than 1% of global cross-border payment volume, infrastructure is improving, regulatory clarity is expanding, and institutional interest is accelerating.
The market is already being divvied up.
Visa announced Thursday that it is now integrating stablecoin support across multiple layers of its network. The message is that tokens and traditional card rails can coexist.
“We are also enabling cross-border money movement capabilities for P2P and B2B in certain emerging markets, and we are piloting and partnering with stablecoin payments companies who specialize in these markets as we build out our stablecoin treasury stack for settlement and money movement flows,” Visa CEO Ryan McInerney said during his firm’s earnings call Tuesday.
“Additionally, we are also helping banks issue their own stablecoins and realize the benefits of programmable money…,” he added.
Visa has been testing a series of corridors and putting stablecoins to work directly versus fiat currency money movement options, McInerney said during the call. The company has a “good sense on which corridors we can provide faster money movement, cheaper money movement.”
PayPal CEO Alex Chriss framed his company’s dollar-backed stablecoin, PYUSD, as a tool to cut cross-border fees and delays.
“Traditional payment methods can be prohibitively expensive and time-consuming,” he said Tuesday. “PYUSD delivers a stable, reliable and cost-effective alternative.”
PayPal added yield rewards for holding the coin, expanded issuance to the Stellar and Arbitrum blockchains and said PYUSD would power PayPal World transactions that settle in local currency on the back end.
Stable Sea CEO Tanner Taddeo and Trovata CEO Brett Turner told PYMNTS in an interview published Thursday that stablecoins have an appeal within corporate finance functions, offering the promise of near-instant settlement, reduced costs and worldwide reach.
“Moving $10 [million] to $30 million across borders into exotic corridors typically takes three to five business days,” Taddeo said. “With stablecoins, it can settle in four to eight hours.”
Still, not everyone is convinced.
Robinhood Chairman and CEO Vlad Tenev said during the company’s earnings call Wednesday (July 30) that “stablecoins among retail have been largely an ex-U.S. phenomenon. And of course, they’re coming into the U.S., but the U.S. already has the benefit of pretty robust payment and banking systems. I think the real opportunity in the U.S. would be tokenizing assets that were previously inaccessible.”
