Stablecoins are rapidly transforming digital finance, emerging as the de facto standard for internet-based payments. With transaction volumes now surpassing global giants like Visa and Mastercard on blockchain networks, stablecoins are being hailed as the default settlement layer for the internet. Noam Hurwitz, head of engineering at Alchemy, emphasizes that stablecoins offer a powerful combination of speed, low cost, and global accessibility—key ingredients for the future of online transactions.
This shift isn’t just theoretical. Major financial institutions and fintech innovators are actively integrating stablecoins into their infrastructure. As blockchain adoption grows, so does the demand for reliable, scalable, and secure systems to support this new financial reality.
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The Rise of Stablecoins in Digital Payments
The adoption of stablecoins has been nothing short of explosive. According to Hurwitz, onchain transaction volume via stablecoins has outpaced Visa and Mastercard by 7%, marking a significant milestone in the evolution of digital money. This growth is fueled by real-world utility—businesses and consumers alike are leveraging stablecoins for faster, more efficient cross-border transfers and instant settlements.
Companies like PayPal and Stripe have recognized this trend and are embedding stablecoin technology into their platforms. By utilizing blockchain infrastructure, these firms can bypass traditional banking delays and reduce transaction fees significantly. Instead of waiting days for settlement, funds move in seconds—anytime, anywhere.
Alchemy plays a central role in this transformation. As a leading blockchain development platform, Alchemy powers stablecoin transactions for industry leaders including Visa, Stripe, Circle, and PayPal. It also serves as the underlying onchain provider for Robinhood Wallet, enabling seamless integration between traditional finance and decentralized ecosystems.
This level of institutional engagement signals a broader shift: stablecoins are no longer niche tools for crypto enthusiasts but core components of modern financial infrastructure.
Why Stablecoins Are Gaining Momentum
Several key advantages explain why stablecoins are gaining widespread traction across industries:
- Speed: Transactions settle in seconds, not days.
- Cost-efficiency: Minimal fees compared to traditional wire transfers or card processing.
- Global accessibility: Anyone with an internet connection can send and receive value.
- Security: Built on tamper-resistant blockchain networks.
- Programmability: Can be integrated into smart contracts for automated payments.
Hurwitz underscores that stablecoins enable money to move “cheaply, quickly, securely, and globally.” These attributes make them ideal for use cases ranging from remittances to decentralized finance (DeFi) and even prediction markets like Polymarket.
Beyond payments, stablecoins are also reshaping asset markets. For example, Tether (USDT)—one of the largest stablecoins—holds approximately $113 billion in U.S. Treasurys**, generating around **$13 billion in profit last year alone. This positions Tether as a major player in traditional finance, holding more U.S. debt than some sovereign nations.
Tether holds more U.S. Treasurys than Germany.
— Source: TFTC
Such developments highlight how tokenized money is becoming the foundation of a broader tokenized financial system. From digital dollars to tokenized bonds, the infrastructure for a fully onchain economy is taking shape—and stablecoins are at its core.
Challenges Facing Stablecoin Adoption
Despite rapid growth, stablecoin adoption faces hurdles—particularly around infrastructure fragmentation and risk assessment. The blockchain ecosystem remains highly decentralized, with multiple chains, standards, and custodial models. For institutions looking to adopt stablecoins, evaluating provider reliability and counterparty risk becomes critical.
Hurwitz raises a crucial question:
“Can a small startup really support enterprise-grade operations while building and scaling the services they need?”
This concern points to the need for robust, battle-tested infrastructure and clear regulatory guidelines. Without them, scalability and trust remain barriers to mass adoption.
However, progress is underway. One notable development is Kinexys, a tokenized bank deposit launched by JP Morgan. This permissioned deposit token allows institutional clients to access yield-bearing deposits on public blockchains, offering:
- 24/7 settlement
- Near real-time liquidity
- Interest-bearing capabilities for holders
Such innovations demonstrate how traditional finance is beginning to embrace onchain solutions—blurring the lines between legacy systems and decentralized finance.
Regulatory Clarity Fuels Innovation
A major catalyst for confidence in stablecoins is the recent passage of the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) by the U.S. Senate. This landmark legislation establishes federal oversight for U.S.-dollar-backed stablecoins, creating a clear regulatory framework that protects consumers while encouraging innovation.
Hurwitz notes:
“With the recent passage of the GENIUS Act, the regulatory landscape is becoming clearer and more structured, which encourages innovation while protecting consumers.”
Regulatory clarity reduces uncertainty for businesses and investors alike. It enables startups to build compliant products and gives established financial institutions the confidence to integrate stablecoin solutions into their offerings.
👉 Explore how evolving regulations are shaping the future of digital assets.
Technical Hurdles and the Road Ahead
While adoption surges, technical challenges persist. One major goal for developers is to decouple user experience from underlying blockchain complexity. Most users don’t need to understand gas fees or wallet management—they just want fast, reliable payments.
Achieving this requires advanced infrastructure capable of abstracting away technical details without sacrificing security or performance. Hurwitz predicts that most financial services will eventually deploy their own layer 2 blockchains to scale operations, monetize ecosystems, and improve user experience.
These layer 2 networks will enable:
- Faster transaction finality
- Lower costs
- Seamless crosschain interoperability
Over time, this could lead to a unified financial network where stablecoins flow freely across platforms—powering everything from microtransactions to institutional settlements.
BIS Criticism: A Counterpoint to Optimism
Not everyone shares Alchemy’s optimistic outlook. The Bank for International Settlements (BIS) released its Annual Economic Report 2025, arguing that stablecoins fail key monetary functions: singleness, elasticity, and integrity. The report classifies stablecoins as “digital bearer instruments” that resemble financial assets more than true money.
According to the BIS, stablecoins lack the central oversight needed to maintain price stability during crises and cannot be expanded or contracted like central bank money. These limitations raise questions about their long-term viability as a monetary substitute.
Yet proponents argue that utility trumps theory. Regardless of academic debates, stablecoins are already being used at scale—for remittances, trade finance, DeFi lending, and more. Their real-world adoption continues to grow, driven by demand for better financial tools.
Frequently Asked Questions (FAQ)
Q: What makes stablecoins different from regular cryptocurrencies?
A: Unlike volatile cryptos like Bitcoin or Ethereum, stablecoins are pegged to stable assets—usually the U.S. dollar—making them ideal for payments and value storage.
Q: Are stablecoins regulated?
A: Increasingly yes. In the U.S., the GENIUS Act introduces federal oversight for dollar-backed stablecoins, enhancing transparency and consumer protection.
Q: Can individuals use stablecoins for everyday transactions?
A: Yes. Many wallets and payment apps now support stablecoins for peer-to-peer transfers, online purchases, and even cross-border remittances.
Q: Do stablecoins earn interest?
A: Some do. Certain platforms offer yield-bearing accounts where users can earn returns by staking or lending their stablecoins.
Q: Is it safe to hold large amounts in stablecoins?
A: Safety depends on the issuer’s transparency and reserve backing. Regulated issuers like Circle (USDC) publish regular audits to verify full collateralization.
Q: How do stablecoins impact traditional banking?
A: They introduce competition by enabling faster, cheaper transactions. Banks are responding by launching their own tokenized deposits and exploring blockchain integration.
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Conclusion
Stablecoins are redefining how value moves across the internet. With transaction volumes exceeding those of Visa and Mastercard onchain, they are increasingly seen as the default settlement layer for digital commerce. Backed by growing institutional adoption, technological innovation, and emerging regulatory frameworks like the GENIUS Act, their role in global finance is only set to expand.
While challenges remain—from technical scalability to regulatory alignment—the momentum behind stablecoins is undeniable. As Hurwitz stated, they offer a future where money flows as easily as information—fast, frictionless, and borderless.
For developers, businesses, and policymakers, understanding this shift is essential. The era of tokenized finance is here—and stablecoins are leading the charge.