Stablecoins in Finance

It’s Genuis! How we think about money is in the process of changing. If you are in the business of managing money, managing your own money or OPM, this is an important development worthy of discussion. The GENIUS Act, passed by Senate last week by 2/3, establishes the first federal framework for stablecoins. GENUIS requires issuers to maintain 1:1 reserve in highly liquid assets (short-term Treasuries/U.S. dollars) with monthly disclosures and annual audits. GENUIS establishes a licensing system for issuers to become regulated under federal oversight (Fed, OCC) and includes anti-money laundering safeguards, consumer protection measures, and legal standing that establishes the right for stablecoin holders to maintain priority claims on reserves in the event of bankruptcy. Unlike the traditional banking system, U.S. stablecoins must maintain 1:1 backing of highly liquid assets (short-term UST bills). Stablecoins provide substantial structural demand force for UST significant upcoming maturities. There are over $6.6 trillion in bank deposits that the U.S. Treasury has warned could migrate to stablecoins. Last week when the Senate passed the bill, JPMorgan announced that Coinbase Institutional will be supporting their creation of JPM stablecoin, built on Coinbase’s Ethereum-based L2 (Base), a bank-backed deposit token that targets U.S. institutional clients. Others will follow JP Morgan’s lead. Treasury Secretary Scott Bessent is focused on $25 trillion UST that must be refinanced over the next 3 years. While the stablecoin market has grown from $5B at the start of 2020 to >$255B today, what may be more impressive is stablecoin annual transaction volume is greater than $28T - more than Visa and Mastercard. The $6 trillion math: - $6+ trillion U.S. consumer spending on credit cards is ripe for disruption. Imagine $6 trillion processed via credit cards were transacted on blockchain rails using stablecoins fully backed by short-term UST, eliminating the 3% transaction fee that CC companies charge (more money in the hands of consumer, more demand for UST). - $6+ trillion is the baseline for size of U.S. money markets, while both stablecoin and money markets are both backed by UST, the frictional administrative/fee cost structure of administering a stablecoin is less friction than money market funds; stablecoin is more liquid (same day/same minute). - $6+ trillion reside within bank deposits which is only 1/10 backed by UST vs ~100% UST collateralization for stablecoins. Bank deposits payout 50bp for same-day deposit accounts or 3.5% for money market accounts (next day) vs. stablecoin which can earn the full rate of UST which is closer to 4% today (higher return). It is best to be prepared for this development, its early days, but it’s in the process of happening.

A new era for stablecoins. The passage of the GENIUS Act marks a watershed moment for the stablecoin industry. This regulatory breakthrough is expected to unlock unprecedented growth, with funding to stablecoin companies projected to rise to $12.3B in 2025 – more than 10x 2024's $1B in funding. The GENIUS Act represents more than just regulatory oversight; it legitimizes and industrializes stablecoins as critical financial infrastructure. This foundational shift from regulatory ambiguity to structured oversight is triggering a new wave of adoption across traditional finance, e-commerce, and cross-border payments. Success in the post-GENIUS Act era will be determined by three key factors: 1) Regulatory Compliance Capabilities - Companies that can quickly meet the Act's stringent requirements will gain first-mover advantages 2) Traditional Finance Partnerships - Integration with established financial institutions becomes essential for scale and legitimacy 3) Infrastructure Scale - Robust custody, settlement, and operational capabilities will separate winners from losers The door is now open for banks, fintechs, and retailers to launch their own stablecoins or integrate them into existing systems and the transformation is already underway. Major payment companies including Mastercard, Visa, and Stripe have begun integrating stablecoin capabilities. Industry giants like Amazon and Walmart are reportedly moving toward stablecoin-style offerings as payment networks prepare for disruption. Nearly all of the major banks and financial services firms have publicly disclosed their digital assets initiatives with stablecoins at the core. The GENIUS Act doesn't just regulate stablecoins; it positions them as the backbone of the next phase of financial digitization. Companies positioned at the intersection of traditional finance and compliant stablecoin infrastructure stand to capture the largest share of this rapidly transforming market. The stablecoin industry is now set to become to essential financial infrastructure. Which companies are positioned to win in the stablecoin era? Explore the full CB Insights' stablecoin market map: https://lnkd.in/guk7HuPz

Stripe’s Stablecoin Move: A Game Changer for Emerging Markets? 🌍💰 I recently listened to the ALL IN podcast and was intrigued with excitement . Stripe’s integration of USDC stablecoin payments isn’t just about making transactions faster—it could unlock financial access for millions in emerging markets. Here’s why this is a big deal: ✅ Corporations in emerging markets have access to $1.4T in spending power ✅ These corporations want to offer their users a way to transfer money globally instantly, hold a stable currency (dollars) and earn yield on that currency ☝️ DeFi all ready does all this ☝️ ✅ Faster, cheaper cross-border payments – Remittances and international transactions often come with high fees and delays. Stablecoins can cut costs and speed up settlements. ✅ Financial inclusion – Many businesses and freelancers in emerging markets struggle with limited banking access. Now, they can accept digital dollars without needing a traditional bank. ✅ Shielding against currency volatility – In economies with unstable currencies, stablecoins provide a safe store of value, protecting earnings from devaluation. ✅ Bridging Web2 & Web3 – With Stripe leading the way, we’re seeing a shift where global commerce is becoming more decentralized and accessible. This move has the potential to reshape how businesses and individuals in emerging markets interact with the global economy. Is this the turning point for stablecoin adoption in developing economies? Let’s discuss 👇 #Fintech #Stablecoins #EmergingMarkets #FinancialInclusion #Crypto

I am often asked by friends who are not as familiar with Crypto what the “real” applications are - here is my typical answer! 🖖 In Developed Markets - Gambling / Speculation In countries like the US and the UK, Crypto has found product market-fit in speculation/gambling because: 1. Most token prices are very volatile going up and down very quickly 2. This creates news headlines and FOMO, so people think they can get rich quick. Obviously, this often goes wrong, just like gambling in a casino. Inevitably, people look down on gambling but humans are drawn to it and have been for a long time. As far back as 1916, $268m was wagered on the outcome of the US Presidential Election [1]. Whether it is ethical or not is a different question. 👉 In Developing Markets - Holding US Dollars In markets like Turkey and Argentina, Stablecoins (i.e. tokens that can be redeemed for a fixed amount of fiat currency like $1) are increasingly owned. Consumers want to hold US dollars to ensure the value of their savings don’t get eroded - by inflation or government policy. Stablecoins combined with blockchain settlement help them tackle two problems: 1. Local currency inflation: In 2023, inflation in Argentina and Turkey was 211% and >60% respectively [2]. The value of consumers’ local currency savings fall quickly so they want to own USD, which has much lower inflation. 2. Capital restrictions: In these countries, governments have confiscated assets and put restrictions on sending money abroad and how much foreign currency you can own. If assets are stored in self-custody blockchain wallets, a government can’t freeze your account like they can in a bank or exchange. In Turkey, I’ve seen 80 year olds on the street wearing Binance hats - holding stablecoins is not niche. It is common practice to buy USDT and store it on Binance or in a self-custody wallet. This market is already sizeable and growing fast [3]: 1. In 2022, >$11 trillion in stablecoin transactions were settled, dwarfing PayPal volumes ($1.4 tn) and comparable with Visa ($11.6 tn). 2. Supply of stablecoins has grown from $3bn five years ago to >$120bn in mid-2023. 3. >2/3 of stablecoins are held in self-custody wallets i.e. outside exchanges like Binance. 4. There are 25 million blockchain addresses holding stablecoins and 5 million sending stablecoins each week. As this market grows, we’re seeing business opportunities in areas like remittances. If you’ve seen other Crypto use cases in action now - I’d love to hear from you! [1] Historical Presidential Betting Markets - $165m in 2002 dollars converted to 2022 dollars: https://lnkd.in/gaGnh397 [2] 2023 Inflation in Argentina: https://lnkd.in/gNBdKvJF [3] Brevan Howard - The Relentless Rise of Stablecoins: https://lnkd.in/gSdAivei

"Crypto’s $205 Billion Stablecoin Market Set to Go Mainstream" Mainstream players such as Visa, PayPal Holdings Inc., Stripe Inc. and others are making investments in projects involving stablecoins, which are crypto tokens typically designed to be pegged to the value of the US dollar or another traditional currency. This sub-sector of the digital-asset space has proven to be a lucrative business, now that issuers are able to invest reserves backing stablecoins in short-term US Treasuries with attractive yields. And unlike Bitcoin and other tokens prone to price volatility, use of stablecoins as actual currencies in transactions is gaining popularity around the world. “We’ve seen significant growth in demand from some of the largest companies in the world that participate in under-served payment verticals like global contractor and employee payouts, trade finance, and remittance,” said Rob Hadick, a general partner at digital-asset venture firm Dragonfly. “There is both significant demand from end users in receiving US dollars, which can be near impossible using non-stablecoin rails, but also from senders who want to bypass the correspondent banking system which can be slow, costly, and have high failure rates.” https://lnkd.in/gBwCVbcu

𝗠𝗮𝘀𝘁𝗲𝗿𝗰𝗮𝗿𝗱 + 𝗙𝗶𝘀𝗲𝗿𝘃 𝗧𝗲𝗮𝗺 𝗨𝗽 𝗼𝗻 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 This week, Mastercard and Fiserv announced a new partnership that brings stablecoins into the hands of traditional businesses, FI's, and consumers, all without needing to touch an exchange or wallet. Here’s what’s happening👇 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻 𝗦𝗲𝘁𝘁𝗹𝗲𝗺𝗲𝗻𝘁 𝗕𝗲𝗰𝗼𝗺𝗲𝘀 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀-𝗥𝗲𝗮𝗱𝘆 Fiserv is integrating Circle’s USDC into its platform, while Mastercard will help enable blockchain-based settlement across its global network The goal? → Let merchants and consumers send/receive stablecoins like fiat → Enable instant settlement, 24/7/365 → Provide programmable payments for modern use cases 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 This partnership signals a foundational shift toward stablecoin interoperability and merchant-grade infrastructure → Fiserv (Clover, Carat) enables 6M+ merchant endpoints → Mastercard already has pilots for CBDCs and blockchain traceability → Circle’s USDC is regulated, transparent, and widely adopted Together, these players bring stablecoin rails to the legacy POS ecosystem, not just fintech apps. 𝗨𝘀𝗲 𝗖𝗮𝘀𝗲: 𝗖𝗿𝗼𝘀𝘀-𝗕𝗼𝗿𝗱𝗲𝗿 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀 𝗳𝗼𝗿 𝗦𝗠𝗕𝘀 📌 → A merchant in Mexico could accept USDC via Clover → Funds settle instantly, in dollars, without FX fees or delays → Mastercard APIs then help convert or route funds seamlessly back into fiat 𝗧𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁 → Cross-border commerce that works like domestic card acceptance. 𝗧𝗵𝗲 𝗕𝗶𝗴 𝗣𝗶𝗰𝘁𝘂𝗿𝗲 Stablecoins are quickly becoming the backbone of programmable payments, especially in markets where card settlement is slow or costly This partnership removes key adoption barriers like: ✔️ Instant settlement ✔️ On-chain transparency ✔️ Easy integration via Fiserv’s platforms ✔️ Global merchant acceptance via Mastercard rails 𝗪𝗵𝗮𝘁’𝘀 𝗡𝗲𝘅𝘁? As more payment processors and networks embrace stablecoins, expect to see: → Lower-cost remittances → Faster merchant settlements → Consumer apps built directly on tokenized money rails Source: Circle, Mastercard, FIS 🔔 Follow Jason Heister for daily #Fintech and #Payments guides, technical breakdowns, and industry insights

Here's what Shopify x Coinbase x Stripe actually announced last week is way bigger than most realize (especially after Stripe’s Privy acquisition) For the first time, stablecoin payments are available 𝘯𝘢𝘵𝘪𝘷𝘦𝘭𝘺 in Shopify Checkout Imagine this: 1. A customer pays in USDC (stablecoin) 2. funds land in escrow in milliseconds 3. you capture payment instantly when the item ships; merchants receive USD 4. No middlemen, and fees are near zero. That’s a massive shift. Why this is different: • Coinbase created a new onchain payments protocol that mimics how credit cards work (authorize → capture → refund) It’s open source, on Base, and available for anyone to build on. • Stripe handle's the backend payment processing + fiat conversion (through Bridge ) + embedded wallet into the user flow (Privy) This makes stablecoins work like real, 𝘱𝘳𝘰𝘨𝘳𝘢𝘮𝘮𝘢𝘣𝘭𝘦 commerce tools, not just P2P transfers.  Now, Shopify made it usable. Expect many others to follow. What does this actually unlock? → A merchant in Argentina can sell a product to a buyer in the U.S. → The buyer selects USDC, and Privy creates a temporary or persistent embedded wallet linked to their email or phone, without requiring them to download MetaMask or manage keys. → The buyer pays in USDC on Base → The merchant gets paid in local currency, doesn't touch crypto → Zero FX fees → No credit card networks → Settlement is near-instant and final Even more: Merchants can now program discounts, loyalty rewards, or dynamic pricing into the payment logic itself. This is 𝗻𝗼𝘁 𝗮 𝗰𝗿𝘆𝗽𝘁𝗼 𝗰𝗵𝗲𝗰𝗸𝗼𝘂𝘁 𝗯𝘂𝘁𝘁𝗼𝗻. This is infrastructure for real-time, programmable, global commerce. Coinbase built the protocol rails. Stripe powers the payment rails. Shopify brings the distribution. And most users will never know it’s running on a blockchain. Crypto is not “coming for finance.” Crypto 𝘪𝘴 the new financial stack. The world’s largest commerce and payments companies are now betting on stablecoins. And we finally have Internet First payments. _ 👉Get actionable insights on this shift in our weekly newsletter & join 30k+ others: www.51insights.xyz 🚨 Interested in who's building this? We're tracking 100s of blockchain companies so you don't have to. Sign up for early access: https://lnkd.in/ejRfPnZa

I’ve been closely tracking how stablecoins will change payments since I worked on Project Hamilton at the Federal Reserve Bank of Boston. Stablecoin adoption always seemed a few years away, but they have finally arrived. Stablecoins are an onchain store of value and a medium of exchange, but for most users they are an onchain dollar, redeemable for a dollar. Stablecoins have found product market fit – they're a nearly free, nearly instant, infinitely flexible payments platform. There are over $160B stablecoins issued & stablecoins were used for 2x the volume of the Visa network! ($8.5T v $3.9T in Q2 '24). More than 60M wallets sent stablecoins that same quarter. By looking at 10 years of stablecoin history and 250 years of US banking history, specifically the evolution of money & bank deposits - we can peak into the future of stablecoin adoption Fiat-backed stablecoins like USDC or USDT mimic old National Bank Notes -- a bearer note redeemable for a stable asset like a bond or specie. Asset-backed stablecoins (stablecoins created by lending protocols) extend the onchain money supply -- similar to how the traditional money supply is extended by bank lending. There is also a new category of dollar token that we call a Strategy-backed Synthetic Dollar (SBSDs). SBSDs are a dollar share in an onchain hedge fund -- useful for investors, but less safe than a stablecoin or money in a bank deposit. There's a reason why regulators prevent bank deposits from being invested in hedge fund strategies -- to keep the money safe. But this analysis only takes us so far: Stablecoins are the cheapest way to send a dollar. Stablecoins can reset the market structure in the payments industry, creating opportunities for incumbents and for startups to build on a new platform of frictionless and cost-free payments! Read more here: https://lnkd.in/eSQNHyir -- None of the above should be taken as investment advice or an advertisement for investment services; see a16z.com/disclosures for further information.

🏦  A major bank plans to issue a HKD-backed stablecoin ⬇️ Standard Chartered just announced a joint-venture to issue one of the first HKD-backed stablecoins (https://lnkd.in/eTW8z-Ut) They join a growing list of banks getting more involved in the stablecoin space, empowered by evolving regulatory clarity: ➞ BBVA is collaborating with Visa to launch a fiat-backed stablecoin in 2025 via the Visa Tokenized Asset Platform (VTAP) ➞ Société Générale (SG-Forge) launched EUR CoinVertible (EURCV) a euro-backed stablecoin, now accessible to retail investors and is in talks with ~10 banks to white-label its stablecoin technology. ➞ FV Bank partnered with issuers to integrate PYUSD, USDC and USDT for direct deposits and outbound payments ➞ JPMorgan Chase uses JPM Coin, a deposit token, for $1B of daily internal transfers (not publicly available but already integrated internally) Three reasons why this is relevant: 1️⃣  Non-USD stablecoins enable improved cross border payments experience ➞ USD stablecoins are 99% of stablecoin market cap today but the cheaper/faster/programmable benefits of stablecoins apply to other fiat currencies too ➞ There are an increasing number of non-USD currencies launching globally. With sufficient liquidity, this enables truly 24/7 FX (including on chain) as well as more on/off ramp and last mile delivery options. Imagine multi-currency wallets for where you have full control of what you were holding and when to exchange/off ramp. ➞ Given that around 80-90% of global trade happens in USD and that there is demand from the global south for USD for stability reasons I still see USD being the dominant stablecoin currency (e.g. +90%) but if the total stablecoin market cap is $2T by 2030 that’s still space for $200B of non-USD stables. 2️⃣  Banks adds legitimacy to the space ➞ Bank deposits above insured amounts aren’t risk free, but the perception is that they’re safer than existing stables (see USDC and USDT depegs and the incorrect but commonly cited example of Terra/Luna). Most business users are unlikely to argue about the safety of a "BofA" coin on its face given the association. The implementation details will matter. Tokenization of bank deposits themselves (see USBC) vs fully backed reserves is an evolving topic to watch out for. 3️⃣ Banks recognize the potential in stablecoins and are turning threats into opportunities ➞ Banks take deposits (pay little yield) and invest in loans (mortgage, cards, cars, biz loans). Stablecoins take deposits (pay little yield) and invest in treasuries. Issuance is fundamentally a very narrow version of banking without fractionalisation and it’s hard to ignore Tether making $13B of profit in 2024. ➞ Cross border payments could threaten banks high margin FX business but they themselves can take advantage of these new rails because they already have (1) customers and (2) access to FX liquidity

Every fintech is rushing to add crypto. But most are making the same 3 mistakes... I've analyzed how PayPal, Stripe, Visa, and Mastercard approached crypto integration. What I found was surprising The biggest players succeeded by avoiding the obvious moves. Here are the 3 biggest mistakes most companies make: 1// Starting with trading features PayPal learned this lesson the hard way. While crypto trading seems like an obvious entry point, it's already heavily commoditized with shrinking margins. The regulatory burden is massive, and we're seeing the fallout. Just look at Affirm - they've already shut down their entire trading program after realizing the economics don't work. 2// Ignoring stablecoins Most companies overlook stablecoins in favor of mainstream crypto, but the data tells a different story. Stablecoin market cap has grown 300% year over year, with transaction volume hitting $20T in 2024. This is why we're seeing Visa build their entire VTAP platform around stablecoins and PayPal launch their own PYUSD. The unit economics simply make more sense than crypto trading. 3// Building everything in-house The race to market is too critical for building from scratch. Stripe recognized this when they acquired Bridge for $1.1B. Visa partnered with BBVA to launch VTAP. PayPal leveraged their existing payment rails instead of rebuilding. Mastercard joined forces with Paxos. The pattern is clear: speed to market matters more than perfect technology. Here's what the winners are doing instead: They're focusing on foundational infrastructure - solving real payment processing challenges, improving cross-border settlement, and building institutional services. Rather than reinventing the wheel, they're using existing rails where possible and partnering strategically for missing capabilities. Most importantly, they're starting with stablecoins. The regulatory path is clearer, the use cases are immediate, and the margins are sustainable. This approach is driving faster adoption across the board. The reality is that the companies winning in crypto are solving real payment problems. Want to see my detailed breakdown of how each major fintech player is approaching crypto? Drop a "+" in the comments and I'll share the analysis.