Since their advent in the early 2000s, cryptocurrency supporters have sought viable real-world use cases. While the volatility of digital assets made them as attractive as investments, it hindered their adoption in mainstream financial activity.
The development of stablecoins over a decade ago changed that. By maintaining a relatively consistent value and transcending currency exchange rates, stablecoins opened the door for digital assets to move beyond peer-to-peer (P2P) trades and gain tractions with businesses and financial institutions.
Business-to-business (B2B) payments now surpass P2P transactions as the leading use case, accounting for roughly two-thirds of the market, according to blockchain firm Artemis. The primary driver: cross-border payments.
Why Cross-Border Payments Needed an Overhaul
Just as cryptocurrency required a mainstream use case to enter the payments ecosystem, cross-border payments demanded a fundamental rethink in today’s global economy. For years, these transactions relied on the correspondent banking system, in which banks facilitated currency exchanges and settled transactions on each other’s behalf.
Handle such transactions independently is challenging due to multiple currencies, jurisdictional issues, and constantly evolving anti-money laundering regulations. Traditional processing involves multiple intermediaries—correspondent banks, clearinghouses, and more—all of whom charge fees. Combined with foreign exchange costs, this makes it difficult for businesses to achieve transparency in their payment expenses.
Despite global trade growth, the number of correspondent banks has declined by roughly 25% over the last decade. Additionally, geographic and regulatory barriers, like Know Your Customer requirements, have excluded many people from the traditional financial system.
Given all these issues, it is no surprise that correspondent banking faced significant challenges even before stablecoins entered the scene. Data from the Bank for International Settlements (BIS) shows active correspondent banking relationships declined by around 30% between 2011 and 2022.
Early Development and Usage of Stablecoins
When the first stablecoin launched in 2014, its goal was not to solve cross-border issues. BitUSD, introduced on July 21, 2014, via the decentralized exchange Bitshares, aimed to facilitate trades within cryptocurrency markets.
However, the coins’ stable value proved useful for transactions between partners using different currencies. Stablecoins also leverage key benefits of cryptocurrencies, such as programmability and blockchain traceability, making them ideal for cross-currency settlements.
“They pivoted really quickly, because once you have a wallet in place and you send it to another wallet, they realized, ‘There’s something else here,’” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It quickly became kind of the offshore digital euro dollar.”
Stablecoins gained momentum before the pandemic, as businesses accumulated excess capital and crypto adoption expanded. Post-pandemic inflation further drove demand, particularly in countries with hyperinflation like Venezuela and some African nations. Stablecoins provided a reliable alternative to unstable local currencies.
Crypto Exchanges Lead, Legacy Firms Follow
In 2014, Tether introduced the first cryptocurrency pegged to the U.S. dollar. Originally called Realcoin, it was quickly rebranded as Tether (USDT). Tether remains the market leader with roughly $184 billion in circulation, followed by Circle with around $79 billion. Today, Tether processes approximately $10 trillion in transactions annually.
The scale of these operations has prompted financial organizations to enter the stablecoin market. Visa, Fiserv, and SoFi are among the major players offering stablecoin programs.
- Visa launched a program in January 2026 allowing merchants to settle international transactions using digital assets. In partnership with stablecoin infrastructure provider BVNK, businesses can prefund payments with digital assets and pay recipients directly via digital wallets. Visa Direct handles the payouts, while BVNK manages wallet and blockchain integration, as well as compliance checks.
- Fiserv is working on its own turnkey digital assets platform and stablecoin for bank and credit union clients. Cooper Thompson, Fiserv’s Vice President of Innovation for Digital Assets told Finopotamus: “It sits inside your existing digital experiences. It provides open APIs. That way you if you have a different digital banking application, it can be integrated there. We are very much building it to sync with their existing core system to where customers can move from some kind of that deposit account directly into stablecoin.”
- SoFi is launching SoFiUSD as a white-label stablecoin for financial institutions. Initially used internally for settlement, it will debut on the Ethereum blockchain, with plans to expand to other blockchains for broader access. SoFi aims to make it usable by card networks, retailers, and businesses in countries with volatile currencies.
Other initiatives include Early Warning Services exploring a stablecoin for Zelle cross-border transactions, PayPal’s PayPal USD, and country-specific coins like South Korea’s KRW1 and South Africa’s ZARU. Wyoming issued the Frontier Stable Token (FRNT), pegged to the dollar, intended primarily for local retail use and to reduce swipe fees.
Competing with Crypto Firms?
While traditional financial institutions may appeal to those seeking regulation and security, crypto firms enjoy a first mover advantage. For younger users or those in emerging markets, crypto is often perceived as safe as fiat.
“Tether is so well-positioned globally,” said Hugentobler. “People who live in other countries see it is a no brainer. You look at Tether’s balance sheet, and they’re something like the 15th largest buyer of U.S. Treasuries at this point in the world. They also have a ton of gold on their balance sheet.”
Stablecoins have already become the predominant asset used in cross-border payments, though precise figures are scarce. And that transformation has happened without global rules that regulate their usage.
“So many people are using crypto or stablecoins as an alternative route to banking,” said Hugentobler. “It’s a double-edged sword because you want to use who you trust. Where stablecoins are regulated and transparent, that’s where people are going to go.”
Regulatory clarity is improving: In July 2025, the U.S. GENIUS Act established a framework for stablecoins, influencing how banks, B2B platforms, and remittance providers engage with digital assets. The pending Clarity Act may further shape usage, particularly regarding yield offerings. While U.S.-centric, such regulation could set a global precedent.
“Until the U.S. passes the Clarity Act into law, there’s still a lot of unanswered questions about how these other countries should go about it,” said Hugentobler. “Obviously there’s no single global rule book, but organizations like the FATF are pushing for coordination on things like licenses, issuers, transparency, and redemption rights. It’s going to take some time, but once the U.S. does pass the Clarity Act, we’ll start seeing more and more entities working together.”
The Next Frontier: Agentic AI
Stablecoins may also have play a critical role in agentic commerce, where autonomous systems conduct millions of transactions across networks. A stable, programmable digital asset could reduce friction and volatility compared with fiat. For micropayments—mere cents per transaction—stablecoins offer a scalable solution.
Stripe co-founder and President John Collison noted crypto is well-suited for autonomous software agents handling payments. Stripe supports the x402 standard, which enables agent-driven transactions.
Similarly, Coinbase’s Payments MCP allows agents to access financial tools, with plans to implement x402 for instant stablecoin settlements. Google’s Agentic Payment Protocol (AP2) also supports x402, converting the rarely used HTTP 402 status code into a real payment layer for both human and agent clients.
“It’s cheap enough for machine-to-machine payments, especially small payments,” said Hugentobler. “I’ve been hearing that some companies are blocking agents from either scraping their website or allowing agentic payments, so those types of things need to be figured out before it really hits mass adoption. There’s still a lot that needs to be figured out, like identity and permissions, fraud controls, dispute handling. All those things need to happen before it gains adoption.”
Key Takeaway
Stablecoins have moved beyond niche cryptocurrency use to become a core tool for cross-border payments, offering speed, transparency, and stability that traditional systems lack. Financial institutions, businesses, and emerging digital platforms can’t afford to ignore stablecoins. Especially as they enable efficient global transactions and open the door to innovative applications like agentic commerce. As regulatory clarity grows and adoption expands, stablecoins are poised to become a foundational element of the future financial ecosystem.
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