As reported by Payments Cards & Mobile late last year, a global shift is under way in the world of cross-border payments, with traditional banks and fintechs increasingly drawn into what industry insiders are calling a “stablecoin gold rush”.
Scramble for position in the stablecoin race
As regulatory sentiment softens and adoption rises, legacy financial institutions are eyeing a once-nascent sector previously dominated by cryptocurrency natives.
Stablecoins — digital tokens designed to maintain a stable value, typically pegged to the US dollar — have historically served as bridges between cryptocurrencies.
However, their utility is now broadening.
In emerging markets, they are becoming instruments of choice for cross-border trade, commodity payments, and digital remittances.
Corporates, contractors, and consumers alike are using them to bypass traditional banking rails and gain instant access to hard currency — often at lower cost.
Global Issuance of Stablecoins
Global issuance of stablecoins stands at approximately $210 billion, with two companies — Tether and Circle — accounting for the lion’s share, at $142 billion and $57 billion respectively.
These tokens, USDT and USDC, have become de facto private reserves of the dollar. But incumbents are no longer content to remain observers.
Last month, Bank of America suggested it would consider launching its own coin, joining a growing cohort of financial giants.
Standard Chartered has announced plans to back a Hong Kong dollar-pegged token, while Stripe recently finalised a $1.1 billion acquisition of stablecoin platform Bridge, marking its largest deal to date.
PayPal, meanwhile, is planning to expand the reach of its PYUSD coin in 2025 — with US corporates paying international suppliers as a key use case.
Regulatory Tailwinds
The recent surge in institutional interest is partly driven by regulatory tailwinds.
The European Union’s Markets in Crypto-Assets (MiCA) regulation took effect this year, creating a formal framework for stablecoin operations.
In the US, bipartisan legislation is under debate in Congress to define oversight, while the UK’s Financial Conduct Authority is preparing to consult the market on its own regime.
Contributing to the accelerating momentum is the political climate.
Former US President Donald Trump’s endorsement of crypto assets has added a jolt of legitimacy to the stablecoin sector.
Industry players liken the current phase to a modern-day gold rush — with technology providers, not just speculators, hoping to capitalise.
…But Hold On
Yet despite the excitement, challenges abound.
Transaction volumes using stablecoins reached $710 billion last month, a significant rise year-on-year, but remain dwarfed by Visa’s daily throughput of nearly 829 million card-based payments.
And while PayPal’s stablecoin processed $163 million in monthly transactions, Tether saw over $131 billion in the same period.
There is also growing scrutiny over risk.
Unlike central bank money, stablecoins reflect the creditworthiness of their issuers. As fintech commentator Simon Taylor notes, users should be aware that stablecoins are only as secure as the companies behind them.
Still, with 35 million unique stablecoin users globally — a figure up 50% in a year — it is clear that digital tokens are no longer fringe.
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