Stablecoins have become blockchain’s first breakout use case.
In March 2025, annual stablecoin transfer volume hit $35 trillion – twice that of Visa. This wasn’t a given. For years, cryptocurrencies were predominantly for retail investors willing to exchange great financial risk for great potential profits. Innovative ideas like initial coin offerings (ICOs) and non-fungible tokens (NFTs) came with speculative booms and busts that overshadowed the ideas themselves. The industry has sought its killer consumer app, the blockchain equivalent of ChatGPT, but that has yet to materialise.
Seventeen years after Bitcoin’s launch, stablecoins are shaping up to power the first universal application of blockchain technology. Stablecoins are decidedly unspeculative, given that they’re digital tokens pegged to real-world currencies like the US dollar. The connection between fiat currencies, the global payments infrastructure, and crypto means that the next wave of growth is expected to come not from crypto-native firms, but from more traditional financial institutions and payments companies who will enter the market as builders instead of speculators.
Regulatory evolution has provided the catalyst for this shift. In particular, the Guiding and Establishing National Innovation for US Stablecoins Act, or the GENIUS Act, which the US House of Representatives passed into law on July 17, 2025. This regulatory clarity is precisely what financial institutions need for stablecoin adoption.
Stablecoins are a tool, not an investment
Major banks are exploring stablecoins because they solve slow cross-border payments, high settlement costs, and operational inefficiencies -- issues that trace back to the early days of banking. Examples of major banks engaging with stablecoins include JPMorgan Chase with JPM Coin, Société Générale with EURCV, and ANZ with A$DC. Several other banks are reportedly planning to launch their own stablecoins, either as a consortium or separately. What unites these initiatives is a reframing of digital assets as a utility, rather than as a volatile investment.
Stablecoins are not an investment vehicle meant to make a profit. They’re payment infrastructure. The financial benefits for banks are compelling. Traditional cross-border payments involve multiple correspondent banks, each taking fees and adding delays. Stablecoins can eliminate these intermediaries, dramatically reducing settlement costs while creating new revenue streams from faster, more efficient services. Banks can also improve their capital efficiency by offering 24/7 settlement, reducing the working capital their clients need to tie up in pending transactions.
For example, JPMorgan's JPM Coin allows institutional clients to settle transactions instantly instead of having to wait days for traditional bank transfers to clear. Stablecoins are a technological upgrade with massive implications for how we move money around the world.
Stablecoins make remittances faster and cheaper
Cross-border payments are still surprisingly slow and costly. The global average cost of sending $200 from one country to another is roughly $12.50. Some cross-country transfers are much worse: In Q4 2024, it cost $39.17 to send $200 from Turkey to Bulgaria.
Stablecoins solve this problem almost completely. Sending money abroad can cost as little as $0.01. The process is relatively straightforward, too: convert local currency to stablecoins, transfer the stablecoins instantly across borders, then convert back to the local currency at the destination. The people paying and receiving the funds don’t necessarily need to understand the underlying technology, or actively acquire stablecoins. They will simply experience faster, cheaper service while the conversions happen in the background.
Regulation unlocks participation
Up until recently, regulatory uncertainty was the primary barrier preventing stablecoin adoption. The GENIUS Act changed that. It is the first comprehensive regulatory framework for stablecoins in the US. At its core, the legislation does three things:
- It creates licensing requirements for stablecoin issuers.
- It sets clear rules about reserves and operations.
- It determines which stablecoins can be treated as legitimate money equivalents.
At a Federal level, only three types of entities can issue stablecoins under the new rules: banks, specially licensed non-bank issuers, and subsidiaries of insured banks. This restriction ensures that stablecoin issuers have proper financial backing and regulatory oversight. For American banks, GENIUS has provided the regulatory certainty they need to enter the stablecoin market. They now have a clearer idea of what compliance looks like, and can build stablecoin infrastructure without regulatory risk.
In Europe, similar clarity already existed. The Markets in Crypto-Assets Regulation (MiCA) came into effect late 2024 and has provided a blueprint for European stablecoin regulation, including strict reserve requirements and transaction caps for large issuers. All businesses subject to MiCA’s rules should now be in full compliance with the framework.
Both regulations share common principles: full reserve backing, regular audits, operational transparency, and consumer protection. This alignment across the US and EU sets the stage for a global stablecoin market.
Invisible infrastructure
Unless you’re the Centre Pompidou, plumbing should be invisible. Most of us don’t think about TCP/IP when browsing the web or SWIFT when making international transfers. We simply expect these systems to work reliably in the background. Blockchain technology is now following the same trajectory.
This invisibility was always the endgame. The industry’s early focus on user adoption and crypto education missed a fundamental point: transformative infrastructure doesn't require mass understanding of its technical workings. Most people don't know how the internet's routing protocols function, yet they use the internet constantly.
In the same way, banks are building stablecoins so their clients don’t need to understand the underlying technology. There’s no need for education. Clients simply benefit from faster settlement and lower costs.
What builders should focus on
Banks that want to build a stablecoin, or companies that want to build stablecoin infrastructure, face specific technical and regulatory challenges. For one, security is paramount. Banks operate under strict risk management frameworks, and any stablecoin infrastructure must integrate properly with existing security protocols and compliance systems. Stablecoins need robust encryption for private key storage, transaction data, and communications between systems. They also need multi-signature custody solutions and real-time monitoring capabilities that satisfy internal risk committees.
Technical integration cannot be overlooked either. Banks won't replace their core systems for stablecoins. They need APIs that connect directly to existing treasury management platforms, payment processing systems, and accounting infrastructure. The goal should be to improve existing operations with blockchain settlement capabilities, not to force operational restructuring.
Additionally, successful stablecoins must be designed to satisfy multiple regulatory frameworks simultaneously, including GENIUS, MiCA, and other relevant legislation. This requires automated reporting capabilities and the ability to demonstrate full reserve backing through regular attestations. It also requires KYC/AML integration, which institutions can achieve by providing proprietary wallets to stablecoin holders. These wallets will require reliable, secure, and compliant recovery services in the event clients lose access to their wallets.
Similarly, the institutions themselves will require wallet infrastructure to operate in the stablecoin ecosystem. These institutional wallets must support complex multi-signature protocols for internal governance while integrating seamlessly with existing risk management frameworks. Banks must implement comprehensive disaster recovery protocols that include secure key backup systems, geographically distributed key storage, and robust succession planning for key personnel.
Institutions will drive the next phase of growth
Retail speculation may have brought crypto to mainstream awareness, but institutional adoption will drive the next phase of growth. This is exciting, because it’s not hype-driven, but utility-driven. The crypto industry's future no longer depends on retail investors to become crypto enthusiasts. Instead, it’s about building great infrastructure.
Stablecoins represent crypto's maturation from speculative investment to essential infrastructure. The institutions are coming because stablecoins offer a better way to move money around the world. It is crypto's iPhone moment: when blockchain technology is so seamlessly integrated that you forget it's even there.
Learn how CoinCover helps build trust, security, and compliance in stablecoin infrastructure. Explore our institutional products and services for regulated crypto use cases.
