Stablecoins slowly emerge as real-world payments method

Stablecoins are cryptocurrencies which are designed to maintain a stable value based on fiat currencies such as the US dollar, and which can function as a payment rail similar to the US ACH or FedNow networks. They were initially used primarily for lending, borrowing and trading in other digital assets via digital asset trading platforms called centralised exchanges (CEXs).
In the last few years, stablecoins’ principal usage has been migrating to non-CEX uses similar to those provided in traditional finance. Stablecoins are being used to save or to transact in USD terms, and for cross-border USD-to USD transactions. The US Genius Act, which was passed in July 2025, is expected to accelerate stablecoin usage for real-world transactions, as it creates a US regulatory framework for stablecoins.

While stablecoin transaction volumes seem large – $35tn annually in 2025 – their use for real-economy transactions remains modest. According to “The impact of stablecoins on the international monetary and financial system”, a Bank for International Settlements paper citing data from Allium and Visa, payment-related stablecoin flows in 2025 totalled $390bn. This is a tiny fraction of traditional payment system transaction flows.

Mastercard and Visa

With Mastercard and Visa forming partnerships and making investments in stablecoin companies, the banking industry has awoken to the reality of stablecoins as a new payment method.

In 2023, Visa began settling card transactions over VisaNet in stablecoins. In 2025, Visa partnered with stablecoin infrastructure firm Bridge to enable businesses and fintechs to offer stablecoin-backed Visa cards allowing stablecoin balances to be spent on Visa cards for consumer purchases. Through Bridge’s partnership with Lead Bank, these stablecoin-based card transactions can be settled on-chain (i.e. processed on a blockchain) with Visa.

In April 2026, on-chain decentralised banking infrastructure provider WeFi announced a collaboration with Visa to bring stablecoin payments into everyday commerce. WeFi offers an orchestration layer between decentralised finance and traditional regulated payment infrastructure.

WeFi is collaborating with Visa on exploring on-chain banking and stablecoin-based everyday payments in Europe, Asia and Latin America. WeFi already offers a Visa-backed card enabling cardholders to spend crypto and fiat assets.

“Our Visa partnership means stablecoins stop being something people hold and become something people use,” WeFi’s group CEO Maksym Sakharov said. “Visa brings global acceptance and regulatory maturity, and we bring on-chain settlement. Most integrations treat stablecoins as a funding source – something in the background that gets converted when needed. With us, stablecoins are embedded directly into the underlying infrastructure, and settlement happens in the background. Consumers don’t manage conversions or interact with separate systems – they spend stablecoin-backed balances anywhere Visa is accepted without thinking about conversion steps or hidden FX costs. For businesses, it means cross-border payments settling faster and more predictably.”

Visa’s strategy of enabling cards to make stablecoin payments complements Mastercard’s B2B and infrastructure-based focus which involves linking traditional payments rails with blockchain-based systems supporting stablecoins and tokenized deposits.

In March 2026, Mastercard acquired UK-based based stablecoin infrastructure firm BVNK to establish the deposit rails enabling fintechs and banks to accept stablecoin payments. The acquisition of BVNK, which includes Worldpay and Flywire among its clients, follows Stripe’s acquisition of Bridge in 2025.

“Mastercard’s move into stablecoin infrastructure is a signal that stablecoins are no longer a niche crypto product but an emerging part of mainstream financial infrastructure,” said Will Harborne, CEO of stablecoin infrastructure provider Rhino.fi “The market now needs infrastructure that makes stablecoin rails feel less like crypto-plumbing and more like standard financial infrastructure: simple to integrate, fast to settle, operationally robust, and built for regulated businesses serving mainstream users.”

Banks

The US Genius Act defines stablecoins issued by permitted issuers as payment instruments rather than securities or commodities. This means US banks can now issue stablecoins as clear reserve requirements exist.

Currently, banks are using stablecoins to accelerate cross-border payments, handle real-time liquidity between branches around the world, and pilot new settlement methods between FIs. Some banks are incorporating stablecoins into consumer e-wallets, and other banks are piloting interbank networks built on tokenized payments. These initiatives’ goal is to ensure faster and more transparent fund transfers rather than about investing in cryptocurrencies.

Banks launching stablecoins include JPMorgan Chase with JPM Coin, Citigroup with Citi Token Services, and Societe Generale with USD CoinVertible.

These initiatives face competition from PayPal and Meta.

PayPal is widening access to its PayPal USD stablecoin through a new platform, PYUSDx, which will enable developers to create their own US dollar-linked tokens backed by PayPal USD.

PayPal USD is a US dollar-based stablecoin issued by federally-related US national banking association Paxos Trust Company. PYUSDx is a tokenization and issuance framework offered by MoonPay Digital Assets.

According to Bloomberg, Facebook owner Meta is looking at offering stablecoin payments on Facebook, Instagram and WhatsApp.

Growth

In the past two years, the total market value of stablecoins denominated in all currencies has increased by 100% to over $320 billion, according to cryptocurrency database DefiLlama, with 99.6% being dollar-linked.

According to the Bank for International Settlements (BIS), Euro-denominated stablecoins accounted for 0.3%, Yen-pegged stablecoins 0.01%, and Brazilian Real-denominated stablecoins 0.5% of total US dollar stablecoin market capitalisation in March 2026.

USD stablecoins are being used by growing numbers of people in emerging markets to guard against high inflation, evade restrictions on international payments and counter the risk of local currency depreciation against the dollar.

Standard Chartered’s “Stablecoins – Implications for EM” report predicts that stablecoins used for savings in emerging markets could increase from around $173 billion in 2025 to $1.22 trillion by end-2028, although that would only represent 2% of bank deposits in those countries.

USD stablecoins’ attraction is the stability of the dollar via-a-vis sovereign currency fluctuation, which is driving adoption of USD stablecoins in high-inflation or low-stability countries, said Justin Ferrabee, a partner at Canadian payments consultancy North Galt.

Risks

The factors driving adoption of stablecoins for real-world transactions such as speed and 24/7 availability introduce new risks and regulatory challenges.

The growth in use of US dollar-pegged stablecoins threatens to increase the dollarisation of emerging market economies and undermine their control of money flows, while posing serious risks to financial integrity, Pablo Hernández de Cos, the BIS general manager, warned in April 2026.

De Cos said stablecoins’ potential to undermine monetary and fiscal policy, cause financial market stress and hamper the fight against illicit financing, means global coordination is of “critical importance”.

Without it, “divergent regulatory frameworks for stablecoins across jurisdictions could lead to severe market fragmentation or enable harmful regulatory arbitrage,” de Cos said, referring to when businesses opt for the least onerous rules.

If regulators classify stablecoins as securities, stablecoin issuers will face more stringent disclosure and compliance rules. But regulating them as money – which the Genius Act does- could fuel an explosion in their use for mainstream payments.

Cross-border transfers

Stablecoins potentially threaten slow and opaque correspondent banking models, which rely on chains of intermediary banks to move money cross-border.

According to Rhino.fi’s Harborne, stablecoins are increasingly used for commercial workflows such as treasury movement and cross-border business payments. “Stablecoins can reduce the cost and friction of moving money internationally, improve settlement speed, and expand access for consumers and businesses that are underserved by traditional banking rails,” he said.

Stablecoins could be advantageous for consumer cross-border transfers, as SWIFT and money transfer services such as Wise are expensive, said North Galt’s Ferrabee.

In some emerging market countries, USD stablecoins represent a significant share of cross-border payments, according to the IMF, particularly as traditional remittances can cost 20% of the amount being sent. “Being a single source of information, blockchains can greatly simplify the processes linked with cross-border payments and reduce costs,” the IMF said in its “Understanding Stablecoins” report.

“The core problem for remittances in emerging markets is cost, speed, and reliability” Ryan Kirkley, CEO of Miami-based cross-border settlement provider Global Settlement Network, said. “Much of that relates to how dependent those flows are on Western correspondent banking networks and dollar liquidity, even when the transaction has nothing to do with the U.S.”

“What’s changing is the rail underneath. We’re starting to see stablecoins appear in those flows because they simplify settlement. Instead of routing through multiple intermediaries, value can move more directly, settle faster, and then get paid out locally through existing systems like banks or mobile wallets. That’s where the impact is most immediate in remittance-heavy corridors. In Africa, we’ve worked on corridors between Africa and Europe where those flows move on stablecoin rails and settle locally.

“For cross-border transactions, USD stablecoins are embedded as the dominant stablecoin currency for now, and retail payments will continue in this pattern,” Ferrabee said. Business and corporate payments are more risk-driven, and they will likely hedge currency risks rather than use stablecoins.

Ferrabee said there isn’t a material percentage of high-value cross-border payment flows moving through stablecoins “We still see 99.7% of high value in Western cross-border flows going through SWIFT using Fiat currencies.”

“As stablecoins pose counterparty and liquidity risks, they aren’t attractive for high-value transfers,” Ferrabee said. “For regulatory, bank reporting and risk reasons, sending $50m isn’t practical by stablecoin. But there is an intra/inter-company private network use case for stablecoins, a ‘walled garden’ supply chain use case, and some shared industry infrastructure use cases for corporates. This would remove the payments rails from banks and give control to the private network, which can have a legal framework, proper KYB, AML, and sanction-screening. The private network can reduce fraud and counter party risk, run 24/7/365 at low cost with data richness for programming and straight-through-processing.”

Hotel industry

According to Susanne Sandler, SVP and GM of hospitality fintech Mews, the hospitality industry is in the early stages of adopting stablecoin payments. “We’re not yet seeing widespread rollout from major global hotel chains,” she said. “Most of the activity is happening in pilots, with smaller operators testing acceptance through partnerships with payment providers.”

One hotel chain adopting stablecoins is Las Golondrinas Hotels in Buenos Aires, which in November 2025 partnered with settlement layer provider Polkadot Asset Hub to accept stablecoin payments at its properties using two USD stablecoins, USDT managed by Tether and USDC managed by Circle.

“Hotels aren’t building stablecoin platforms themselves,” said Sandler. “Instead, the ecosystem around them is evolving. Payment infrastructure providers are making it possible to accept stablecoins through unified checkout experiences that handle conversion, compliance, and settlement behind the scenes.

The biggest driver for hotels to explore stablecoins is cross-border efficiency. “Hospitality is a global industry, but payments remain fragmented and expensive,” said Sandler. “Stablecoins offer near-instant settlement and can reduce reliance on intermediaries and forex fees. There’s also growing interest in meeting new customer expectations. A segment of travellers increasingly holds digital assets and prefers to transact that way, particularly for international travel.”

“Longer term, this is about modernising the payments stack,” Sandler said. “Stablecoins combine the programmability of digital currencies with price stability, making them a more practical option for real-world transactions.”