In January 2026, the global stablecoin market achieved an unprecedented milestone, with its total market capitalization soaring past $317 billion. Yet, the true significance lies not merely in this figure, but in the powerful underlying currents it reveals. Circle’s USDC witnessed an astounding 73% surge in 2025, marking its second consecutive year of outstripping Tether’s USDT, which grew by 36%. This remarkable momentum culminated in December 2025, when Visa announced the launch of USDC settlement services in the United States.
When the world’s largest payment network begins settling transactions with stablecoins, when BlackRock, managing $10 trillion in assets, issues an on-chain money market fund, and when JPMorgan Chase settles $3 billion daily via blockchain—it begs the question: What profound shifts are these traditional financial titans recognizing?
The Unstoppable March: Why Traditional Finance is Going All-In On-Chain
In March 2024, BlackRock, a titan in asset management, unveiled BUIDL—a tokenized money market fund. While not its inaugural foray into blockchain, this move signaled an unprecedented level of commitment. BUIDL, issued directly on a public blockchain, holds U.S. Treasury bills and cash, maintains a stable $1 net asset value, and distributes monthly yields to its holders.
BUIDL rapidly surpassed the $1 billion mark in March 2025, becoming the first on-chain fund of its kind to reach this scale. By the close of 2025, its assets under management had exceeded $2 billion, solidifying its position as the largest tokenized fund to date.
So, what exactly did BlackRock foresee? The answer is elegantly simple: unparalleled efficiency and significant cost reductions. Traditional money market funds typically entail T+1 or T+2 settlement times for subscriptions and redemptions, with cross-border transfers bogged down by the SWIFT system and layers of fees. In stark contrast, on-chain funds facilitate near-instantaneous transfers, often for less than $1 in fees, operating seamlessly 24/7.
Crucially, BUIDL has unlocked an entirely new avenue for investment. Historically, direct access to money market funds was often restricted to institutional investors with minimums frequently exceeding $1 million. Blockchain technology, however, democratizes this access, making it available to a broader spectrum of investors.
This newfound accessibility is precisely why protocols like Ondo Finance have flourished. Ondo simplifies the process: it repackages BlackRock’s BUIDL and other institutional-grade Real World Asset (RWA) products into smaller, more accessible fractions for DeFi users. Its OUSG product, for instance, directly invests in BUIDL, allowing everyday users to tap into the 4-5% annual yield offered by U.S. Treasuries.
The tokenized U.S. Treasury sector experienced explosive growth in 2025, skyrocketing from under $200 million in early 2024 to over $7.3 billion by the end of 2025 (data from RWA.xyz). BlackRock’s entry has, in many ways, provided a crucial layer of regulatory legitimacy to the entire RWA landscape.
The Great Divide: Why USDC is Gaining Ground on USDT
While Tether (USDT) undeniably retains its crown as the stablecoin king, boasting a $186.7 billion market capitalization and a 60% market share, a discernible shift in “smart money” is underway.
In 2025, USDC’s market cap surged from approximately $44 billion to over $75 billion—a remarkable 73% increase. In contrast, USDT grew by 36%, from about $137 billion to $186.7 billion, marking the second consecutive year that USDC’s growth rate has eclipsed that of USDT.
The driving force behind this divergence? Regulation.
On July 18, 2025, the U.S. President signed the “GENIUS Act” into law, representing the first federal legislation specifically targeting stablecoins. This landmark act mandates that “payment stablecoins” must be 100% backed by cash or short-term government bonds and are prohibited from paying interest to users.
Circle’s USDC is perfectly aligned with these stringent requirements. Furthermore, Circle became the first global issuer to achieve full MiCA compliance status across the European Union. This regulatory endorsement is not merely a formality; it signifies USDC’s golden ticket into the mainstream financial ecosystem.
The evidence is clear: when Stripe sought a stablecoin for payments, it chose USDC. When Visa launched stablecoin settlements, it opted for USDC. When Shopify enabled merchants to accept stablecoins, USDC was its supported choice. For banks, payment processors, and regulated exchanges, USDC has emerged as the “whitelisted” asset. Conversely, USDT, grappling with ongoing concerns about reserve transparency, even faced delisting pressures in Europe.
However, Tether remains unfazed, for its primary battleground extends beyond the U.S. and Europe. Its stronghold lies in high-inflation regions across Latin America, Africa, and Southeast Asia. In countries like Argentina, Turkey, and Nigeria, plagued by soaring inflation, USDT has effectively supplanted a portion of local currencies, becoming a de facto “shadow dollar.” For many, the first order of business upon receiving their salaries is to convert them into USDT to preserve value.
The stablecoin market is thus bifurcating into two distinct and clear pathways:
- USDC: The compliance-driven route, serving institutional clients and payment scenarios in Western markets, backed by premier investors such as BlackRock, Fidelity, and General Catalyst.
- USDT: The offshore route, catering to emerging markets and trading scenarios, holding an indispensable position in the Global South.
Payment Giants: Surrender or Strategic Evolution?
December 2025 marked a truly historic juncture: Visa announced the launch of USDC settlement services in the United States. This move, at first glance, might appear to be a radical self-disruption, given Visa’s traditional business model of charging 1.5%-3% fees per transaction. By enabling partners to settle with USDC at significantly lower costs, Visa seemed to be undercutting its own revenue streams.
However, this is not a surrender; it’s a strategic, defensive offense. Visa recognized a potent threat: stablecoins were rapidly eroding its core business—cross-border payments. Traditional international transfers are notoriously slow, taking 3-5 days and incurring multiple intermediary bank fees. Stablecoin payments, by contrast, settle in seconds for less than a dollar.
An a16z report from 2025 revealed that stablecoin total transaction volume reached an astonishing $46 trillion, already surpassing Visa’s volume. The adjusted payment/settlement volume stood at approximately $9 trillion, demonstrating explosive growth and actively capturing market share in cross-border and emerging markets.
Visa’s strategy is clear: if you can’t beat them, join them. By integrating USDC settlement, Visa is transforming itself from a mere “payment channel” into a sophisticated “payment orchestrator.” Instead of relying on high transaction fees, it aims to generate revenue by offering value-added services such as compliance, risk management, and anti-money laundering (AML) solutions.
Other payment giants are also making decisive moves:
- Stripe: In October 2024, it acquired stablecoin infrastructure platform Bridge for $1.1 billion, marking one of the largest acquisitions in crypto history.
- PayPal: Its native stablecoin, PYUSD, exploded by 600% in 2025, surging from $600 million to $3.6 billion.
- Western Union: Plans to launch its USDPT stablecoin on Solana in the first half of 2026.
- European Banks: A consortium of 10 European banks formed Qivalis, with plans to introduce a Euro stablecoin in the second half of 2026.
Notably, both Western Union and Visa’s initial partners have chosen Solana as their settlement chain. This highlights the distinct advantages of high-performance public blockchains in payment scenarios: superior throughput and minimal transaction fees.
Banks Strike Back: Navigating the On-Chain Revolution
Caught between the rising tide of non-bank institutions like Circle and Tether, and the aggressive moves of payment giants such as Stripe and Visa, traditional banks are far from sitting idly by. They are actively strategizing their entry into the blockchain space.
JPMorgan Chase stands out as one of the most proactive players. In early 2026, JPMorgan expanded its JPM Coin, developed by its blockchain unit Kinexys, to the Canton Network, facilitating multi-chain interoperability. JPM Coin is not a publicly traded stablecoin but rather a “deposit token.”
Kinexys already boasts a daily transaction volume exceeding $3 billion. It primarily serves multinational corporations like Siemens and BMW, enabling rapid, multi-second transfers of funds between their global subsidiaries. JPMorgan’s rationale is crystal clear: “We don’t need to issue tokens on public blockchains to compete with you. We simply need to onboard our clients onto private blockchains, leveraging blockchain technology to enhance efficiency without relinquishing control.”
In Europe, Société Générale has taken a more expansive approach. Its subsidiary, SG-FORGE, has issued the Euro stablecoin EURCV and the USD stablecoin USDCV. These represent the first stablecoins issued by a regulated bank on a public blockchain (Ethereum) and are listed on compliant exchanges like Bitstamp.
It’s crucial to note, however, that bank-issued stablecoins like JPM Coin and USDCV primarily cater to enterprise clients, not the retail market. They exemplify a path where traditional financial institutions embrace blockchain technology while meticulously maintaining centralized control and focusing on interbank or corporate settlements.
The Future Unveiled: Key Stablecoin Trends to Watch
In summary, the stablecoin market in 2026 is exhibiting four distinct and powerful trends:
- Accelerated RWA Tokenization: Major players like BlackRock, Ondo, and Franklin Templeton are actively issuing tokenized U.S. Treasuries and money market funds. This sector experienced explosive growth in 2025, surging over 35-fold from less than $200 million in early 2024 to more than $7.3 billion. Traditional financial institutions are leveraging tokenization to bring U.S. Treasury yields onto the blockchain.
- Clearer Compliance Pathways: USDC’s 73% growth, outperforming USDT for two consecutive years, underscores the market’s demand for regulatory clarity. With the passage of the GENIUS Act, compliance has become the sole viable option for mainstream institutions. Circle’s robust backing from top-tier investors like BlackRock and Fidelity, coupled with its potential 2026 IPO, could mark a pivotal milestone for the stablecoin industry.
- Payment Infrastructure Restructuring: Stripe’s $1.1 billion acquisition of Bridge, Visa’s USDC settlement launch, and PayPal’s PYUSD soaring by 600% signal a proactive integration of stablecoins into traditional payment infrastructure, rather than mere defensive posturing. High-performance public blockchains like Solana are emerging as preferred choices for enterprise-grade applications due to their superior throughput and low transaction fees in payment scenarios.
- Intensified Market Differentiation: Stablecoins are no longer a monolithic concept. The market is increasingly bifurcating into two distinct categories:
- Payment Stablecoins (e.g., USDC, PYUSD): Non-interest-bearing, but with strong regulatory backing, serving institutions and merchants for transactional purposes.
- Yield-Bearing Stablecoins (e.g., Ondo USDY, Ethena USDe): Offering competitive annual yields (e.g., 4-5%), attracting DeFi capital seeking returns.
Conclusion: A New Era of Global Finance
When BlackRock launches on-chain funds, when Visa facilitates settlements with USDC, and when JPMorgan processes billions daily via blockchain, it becomes unequivocally clear: stablecoins are no longer merely a “crypto” narrative. They represent the overture to a fundamental restructuring of the entire global financial system.
This is not speculative hype or abstract theory. In 2025, stablecoins generated an astounding $46 trillion in total transaction volume, with an adjusted payment/settlement volume reaching $9 trillion. These figures represent tangible, real-world commercial circulation.
The decisive entry of traditional financial giants signals that stablecoins are transitioning from niche “crypto tools” to indispensable “global financial infrastructure.” For those observing this transformative market, the imperative is not to predict the next fleeting trend, but to grasp the underlying logic driving this profound evolution.
The smart money has already made its move.
