Stablecoins hit $10t monthly as banks bypass card giants

The late 2025 regulatory landscape under the Trump administration catalyzed early institutional acceptance of stablecoins by permitting tokenized assets in traditional financial products such as 401(k)s. Despite incomplete regulatory frameworks, major banks like JP Morgan and Wells Fargo confidently advanced pilot programs and stablecoin issuance, anticipating forthcoming regulations that would legitimize their operations without legal repercussions. This regulatory optimism set a crucial foundation for stablecoins to transition from fringe assets to mainstream financial instruments.

In the UK, institutional momentum materialized through UK Finance’s pilot project for tokenized sterling deposits, involving Barclays, HSBC, Lloyd's, NatWest, Nationwide, and Santander. Running until mid-2026 and supported by Quant Network’s blockchain interoperability platform, the pilot aims to enhance payment control, fraud prevention, and settlement efficiency, thereby laying essential operational and regulatory groundwork for tokenized deposits within established banking infrastructures.

By late 2025, Wall Street’s stance on crypto shifted markedly, with JP Morgan’s Jamie Dimon openly endorsing stablecoin initiatives like JP Morgan’s MONY—a $100 million tokenized money market fund on Ethereum—and SoFi Bank launching SoFiUSD, a fully reserved, permissionless stablecoin backed by Fed-held reserves. These moves, alongside the SEC’s closure of its Ondo Finance probe and early regulatory dialogues involving Bank of America, Wells Fargo, and Citigroup, signaled a maturing ecosystem where regulated institutions integrated blockchain infrastructure as core settlement layers while navigating evolving compliance landscapes.

Entering early 2026, the institutional embrace of digital money infrastructure accelerated with BNY Mellon pioneering on-chain digital cash for tokenized bank deposits and real-time settlement, while giants like PayPal, BlackRock, Fidelity, and Goldman Sachs expanded stablecoin and tokenized asset offerings. This surge was underpinned by 2025’s explosive growth—$33 trillion in stablecoin transaction volume and over $25 billion in real-world asset tokenization—compelling traditional finance to converge with decentralized ecosystems, exemplified by BlackRock’s tokenized fund trading on UniswapX, marking a definitive shift from cautious observation to active market participation.

By late 2025 and into early 2026, strategic partnerships between legacy banks, fintechs, and blockchain infrastructure providers laid critical groundwork for stablecoin adoption and digital payment rails. The UK Finance pilot involving Barclays, HSBC, Lloyd's, NatWest, Nationwide, and Santander, powered by Quant Network’s blockchain interoperability platform, exemplified institutional commitment to digitizing sterling deposits with enhanced fraud prevention and settlement efficiency. Simultaneously, Stripe’s acquisition of Bridge catalyzed a rapid expansion of stablecoin infrastructure, shifting its customer base from niche developers to major fintechs, banks, and e-commerce treasury teams, while launching integrations with Remitt and Ramp to support stablecoin settlements across payment networks.

Early 2026 witnessed a surge in collaborative blockchain infrastructure initiatives that bridged traditional finance with emerging digital money systems. Swift’s partnership with Consensys and a coalition of over 30 institutions, including Bank of America and Citi, aimed to embed Ethereum-aligned blockchain ledgers into cross-border payment rails, addressing scalability challenges through Layer 2 solutions. Concurrently, Kraken and Deutsche Börse’s alliance sought to institutionalize crypto markets within Europe’s regulated ecosystem, while Ant International, HSBC, and Swift demonstrated interoperable tokenized deposits using ISO 20022 messaging, signaling regulatory readiness and industry alignment crucial for real-world deployment.

The first half of 2026 saw major payment networks and banks intensify efforts to mainstream stablecoin settlement and tokenized deposits through strategic acquisitions, regulatory milestones, and infrastructure rollouts. Polygon Labs’ $250 million acquisition of Coinme and Sequence created an 'Open Money Stack' for regulated U.S. stablecoin payments, while BNY Mellon’s launch of tokenized deposits on the Canton Network enabled atomic settlement of commercial bank money across blockchains with zero counterparty risk. Stripe’s Bridge secured a national trust bank charter, tightening compliance and expanding stablecoin use cases in payroll and vendor payments. Meanwhile, Visa and Mastercard advanced stablecoin settlement integration, with Visa supporting multiple stablecoins via Bridge and Mastercard anchoring SoFiUSD within its regulated network, complemented by Mastercard’s Crypto Partner Program involving over 85 companies to scale onchain payments.

By mid-2026, coordinated efforts among payment giants, banks, and regulators accelerated the construction of tokenized financial infrastructure on a global scale. The ECB’s Appia roadmap and Pontes DLT-based settlement layer poised Europe for sovereign digital euro settlement, countering dominance by USD stablecoins controlling 84% of the regional market. Visa’s launch of a unified API and its Stablecoin Platform integrating issuance, wallet services, and payment-network connectivity aimed to simplify institutional adoption of stablecoins like Open USD, while collaborative ventures such as Stripe, Visa, and Mastercard’s joint stablecoin platform and JPMorgan and Citi’s planned tokenized deposit network for 2027 underscored a strategic shift from isolated pilots to interoperable, regulated digital money rails. Additionally, investments like AB Xelerate’s stake in Ubyx and Goldman Sachs’ tokenization of real estate assets expanded the ecosystem beyond payments into asset tokenization and cross-border financial connectivity.

The 2026 Genius Act marked a watershed moment by legally recognizing stablecoins and establishing the first federal regulatory framework for dollar-pegged stablecoins, which catalyzed major banks like JPMorgan Chase to develop proprietary payment rails that bypass traditional intermediaries such as Visa and Mastercard. This regulatory clarity unlocked institutional participation previously hindered by uncertainty, enabling banks to actively engage in stablecoin infrastructure and innovate payment systems with greater efficiency and lower costs, as JPMorgan’s JP Morgan Coin and SoFi Bank’s SoFiUSD exemplify.

While the Genius Act laid foundational clarity, ongoing regulatory evolution throughout 2026—including the Federal Reserve’s new national rules for stablecoin issuers and the SEC and CFTC’s joint interpretive guidance—further refined the legal landscape by distinguishing payment stablecoins backed one-to-one by Treasury assets from emerging categories like savings or yield stablecoins. This nuanced framework, coupled with regulatory milestones such as Stripe’s Bridge receiving a national trust bank charter and Kraken gaining direct Fedwire access, signaled a maturing ecosystem where stablecoins are integrated into supervised banking infrastructures, reducing risk and fostering broader institutional adoption.

Despite significant progress, regulatory friction persisted in early 2026 as the CLARITY Act—aimed at comprehensive digital asset legislation—collapsed due to contentious provisions banning stablecoin yield payments and extending compliance burdens, revealing deep divides between crypto operators like Coinbase and venture capital firms such as a16z. This legislative impasse underscored the delicate balance regulators and industry stakeholders must strike between fostering innovation and ensuring consumer protection, a dynamic further complicated by international competitive pressures exemplified by China’s yield-bearing digital yuan.

By mid-2026, regulatory clarity and market maturation had propelled stablecoins from niche crypto tools to mainstream financial infrastructure, with institutions like Bank of America authorizing thousands of advisors to recommend crypto allocations and Mastercard expanding on-chain settlement options using regulated stablecoins such as USDC. This momentum was bolstered by bipartisan urgency to finalize Federal Reserve payment account proposals and evolving regulatory frameworks that increasingly distinguish digital commodities from securities, thereby easing institutional access and positioning stablecoins as the internet’s default settlement layer processing over $10 trillion monthly.

By mid-2026, stablecoins have transcended niche crypto applications to become foundational in mainstream finance, powering a diverse array of retail, corporate treasury, and cross-border payment solutions. Major institutions like JPMorgan with its MONY tokenized money-market fund and SoFi’s fully reserved SoFiUSD stablecoin, backed directly by Federal Reserve reserves, exemplify this shift toward regulated, permissionless digital dollars that eliminate counterparty risk. Meanwhile, neobanks such as Ether_fi and Plasma are innovating rapidly, integrating tokenized treasury yields, cashback rewards, and seamless fiat-crypto bridges to expand real-world use cases across developed and emerging markets, often leveraging AI to enhance product offerings and customer engagement.

The stablecoin ecosystem’s explosive growth—projected to reach trillions in market cap and transaction volume—has been fueled by strategic collaborations among payment giants like Visa, Mastercard, and Stripe, which are embedding stablecoin settlement into their infrastructure to enable real-time, programmable, and global payments. Visa’s Stablecoin Platform and Mastercard’s Crypto Partner Program, involving over 85 companies including Binance and Circle, highlight a transition from pilot projects to mainstream adoption, with a focus on regulatory compliance, infrastructure neutrality, and institutional trust. Revolut’s zero-fee stablecoin conversions and Stripe’s Link Wallet further illustrate how fintechs are lowering friction and expanding access, particularly benefiting SMEs and cross-border B2B payments.

Innovation in stablecoin products is accelerating with the rise of yield-bearing stablecoins like Sky’s sUSDS and Ondo’s USDY, which grew 80% in 2025, and new institutional-grade DeFi solutions from firms like Paxos Labs and Blueprint Finance that enable compliant lending, borrowing, and yield generation without sacrificing regulatory oversight. This maturation is complemented by on-chain liquidity management advancements, such as Spark’s $1.5 billion stablecoin volume on Uniswap v4 and integrated multi-party infrastructure involving Uniswap Labs and Sky, signaling a move from siloed liquidity to unified, scalable platforms that support diverse financial products and institutional adoption.

Regulatory clarity, particularly through frameworks like the Clarity Act and Genius Act, has been pivotal in transforming stablecoins from speculative crypto assets into fully regulated 'dollars on Internet rails' that traditional financial institutions can confidently adopt. This shift has encouraged major banks, including JPMorgan, BlackRock, and Soc Gen, to actively develop tokenized deposits and on-chain lending products, while also prompting the launch of tokenized deposit networks designed to compete with stablecoins. As Farooq Malik of Rain notes, true adoption hinges on technology that integrates seamlessly into existing financial behaviors, enabling stablecoins to become familiar, fast, and cost-efficient money for mainstream users.

The period from late 2025 through mid-2026 witnessed a pronounced wave of mergers and acquisitions as legacy financial giants and crypto-native firms fiercely competed to dominate the emerging stablecoin infrastructure landscape. Notable deals included Mastercard's landmark $1.8 billion acquisition of BVNK—outbidding Coinbase—and Stripe's $1.1 billion purchase of Bridge, signaling a strategic pivot by incumbents toward integrating stablecoin payment rails rather than building from scratch. This consolidation reflects a broader industry recognition that control over the 'pipes'—the settlement and custody infrastructure—is paramount, as these layers underpin the next generation of digital finance and cross-border payments, with JPMorgan’s Kinexys and consortiums like Qivalis exemplifying this trend in private markets and euro stablecoins respectively.

Competitive dynamics intensified as traditional payment networks and banks raced to integrate stablecoins into their core infrastructure, driven by the imperative to reduce intermediaries and capture the growing market share of digital money flows. The Citi-Coinbase partnership in early 2026 exemplified this trend, combining Coinbase’s blockchain expertise with Citi’s global payments network to accelerate institutional adoption and challenge legacy systems like SWIFT. Meanwhile, Kraken’s historic direct access to the Federal Reserve’s Fedwire system without intermediary banks marked a regulatory and political turning point, unsettling incumbents fearful of losing trillions in deposits to higher-yielding stablecoins. These developments underscore a market environment where speed to market, regulatory clarity, and technological integration are decisive competitive advantages.

By mid-2026, the stablecoin ecosystem evolved into a sophisticated full-stack financial environment where settlement rails, compliance, wallet orchestration, FX, and traditional card network connectivity converge, as seen in Mastercard’s BVNK acquisition and expansion of regulated stablecoin settlement options like USDC. This hybrid infrastructure reflects a strategic balancing act: while stablecoins threaten to compress traditional card network margins by bypassing intermediaries, incumbents leverage their scale, brand trust, and regulatory relationships to maintain a moat. Moreover, the rise of AI-driven autonomous payment agents intensifies competition over the payment routing layer, positioning card networks to evolve from mere processors to orchestration platforms in a landscape where consumers may remain unaware of the underlying payment rails.

Despite the dominance of major stablecoins like Tether and Circle’s USDC, a fragmentation trend emerged as fintechs, banks, and consumer apps increasingly launched their own branded stablecoins to capture yield within their ecosystems, signaling potential future market share dilution. However, network effects and liquidity considerations are driving issuers toward partnerships or wrapping dominant stablecoins rather than competing independently, mirroring blockchain Layer 1 and Layer 2 dynamics. Concurrently, regulatory clarity across multiple jurisdictions and initiatives like the ECB’s Pontes settlement layer and Japan’s push for yen-based stablecoins are fostering a competitive environment where legacy institutions and crypto-native firms vie to embed stablecoins within regulated financial products, underscoring the complexity and evolving governance challenges of consortium-based models.

Stablecoin settlement, AI-driven payment routing, and hybrid compliance layers are converging, forcing incumbents to evolve from card processors into orchestration platforms to stay relevant.