For years in the crypto industry, a popular topic of conversation has centered around the idea of blockchain’s ‘killer app’ – the thing that would supercharge adoption and bring ‘no-coiners’ into the fold. It now appears that the ‘killer app’ has indeed emerged, but in a form that most didn’t predict: stablecoins.
Over the past couple of years, stablecoins – digital assets pegged to the value of a fiat currency, typically the US dollar – have evolved from being a niche blockchain concept to a critical component of not only the crypto economy, but the global financial infrastructure. Recent developments, fueled by regulatory clarity, such as the GENIUS Act, and increasing institutional adoption, signal a profound shift in how money is moved, held, and settled.
Institutional Embrace: JPM Coin and Deposit Tokens
One of the most significant trends is the increased involvement of traditional financial giants like JPMorgan, the world’s largest bank by market capitalization. Recently, the bank made strides with its internal digital currency, JPM Coin, by piloting its deployment on Coinbase’s Base network.
JPM Coin is unique among stablecoins in that it is categorized as a deposit token, making it a regulated liability of the issuing bank representing a direct claim on a bank deposit. In contrast, traditional stablecoins are issued by private entities and backed by segregated assets. The significance lies in the underlying regulatory framework: deposit tokens leverage the stability and regulatory oversight of the existing banking system.
And JPMorgan isn’t alone in its foray deeper into the crypto realm; the bank is collaborating with institutions like Singapore's DBS to develop a blockchain-based tokenization framework to enable seamless, onchain transfers between their respective deposit token ecosystems. This move tackles one of the biggest obstacles the crypto industry continues to grapple with: interoperability.
By enabling different digital payment systems to communicate seamlessly, the infrastructure being established facilitates instant, 24/7 cross-bank and cross-border payments for institutional clients. This push for tokenized deposits and digital asset settlement by banks like JPMorgan, Citigroup, and Bank of America demonstrates a firm belief that blockchain technology offers a path to cheaper and faster institutional payment rails.
Payments Giants and Regulatory Tailwinds
It’s not just banks that are embracing the utility of stablecoins; they are also being actively integrated into consumer and business payment networks. Visa recently launched a pilot that allows US dollar-pegged stablecoin payouts, such as USDC, to be sent directly from business accounts to a recipient’s crypto wallet. This initiative targets the growing demand for faster digital payments among international businesses and the gig economy, where 57% of workers prefer digital methods for quicker access to funds.
Visa’s expansion, which builds on its prior integration of stablecoins like Global Dollar (USDG), PayPal USD (PYUSD), and Euro Coin (EURC) for settlement, is a direct response to the regulatory clarity provided by the GENIUS Act.
This legislation has established federal guidelines for stablecoins, reducing the compliance risk for major corporations and accelerating their entry into the space. Since the GENIUS Act established a regulatory framework for stablecoins, numerous corporate players, including Western Union, have announced plans to develop digital asset settlement systems.
The New Central Banks
While banks explore deposit tokens, the largest existing stablecoin issuer, Tether (USDT), is expanding its territory. With over $184 billion in USDT in circulation and a reserve portfolio heavily weighted toward short-term US Treasuries, Tether is increasingly being described as a private dollar-linked central bank for the cryptocurrency economy.
Tether actively manages its supply through large-scale minting and redemption, holds and manages reserves like a fixed-income desk, and earns significant profits from the interest on its assets. And now, the firm is aiming to become the SWIFT of crypto with the launch of Plasma (XPL), a new Layer-1 blockchain explicitly built for stablecoin transactions.
Many see Plasma as a strategic move to solidify its position as the de facto settlement layer for the digital economy. By creating a chain optimized for its flagship stablecoin, Plasma offers key features like zero-fee transfers and sub-second finality, thereby eliminating the cost and speed limitations typically found on general-purpose chains like Ethereum or Tron.
This allows Tether to control the entire “channel end” of the stablecoin business, not just the “issuance end.” The ultimate goal is to transform Tether from an issuer of digital money to becoming the core infrastructure for global money movement, particularly targeting emerging markets like Turkey and Argentina, where local currencies are unstable and USDT is already used as a shadow dollar.
Just as SWIFT provides the messaging network for traditional cross-border bank payments, Tether’s Plasma aims to provide the instant, low-cost settlement rails for stablecoin-based transactions worldwide, integrating directly with fintech apps and moving billions in value outside of traditional correspondent banking channels.
While Tether lacks a sovereign backstop or a public mandate, its compliance actions and market operations underscore the systemic importance of large stablecoin issuers.
TradFi to DeFi Bridge
Taken together with other recent developments, these innovations signal the profound significance of stablecoins: they're not just crypto's on-ramp, but also finance's efficiency engine. By enabling frictionless, borderless transfers, they could unlock trillions in trapped liquidity, empower unbanked gig economies, and tokenize trillions in RWAs.
Ultimately, the stablecoin evolution is about building a new, efficient digital payment infrastructure. The convergence of regulated deposit tokens from banks and compliant stablecoins from non-bank issuers, enabled by regulatory frameworks, positions these digital assets to become the backbone of modern, instant global payments, blurring the lines between traditional finance and the decentralized digital economy.
Conclusion
Stablecoins have quietly become one of the most transformative innovations in global finance. By combining blockchain’s transparency and efficiency with the stability of fiat currencies, they are bridging the gap between traditional banking and decentralized finance. From institutional deposit tokens to retail payment solutions, stablecoins are reshaping how money moves, making transactions faster, cheaper, and more inclusive. As regulatory frameworks like the GENIUS Act bring greater legitimacy, and banks and fintechs continue to adopt onchain settlement systems, stablecoins stand poised to underpin a new era of global liquidity—one where digital money becomes as trusted and universal as cash itself.