Stablecoins, long used as the “cash” of crypto markets, are now being adopted by traditional consumers and payment giants. Their market cap has reached $312 billion, with Circle and Tether controlling 85% of supply. While stablecoins offer faster, cheaper cross-border payments than traditional banking, they do not provide lending, credit, or deposit insurance. Data from McKinsey shows stablecoin payments totaled about $400 billion in 2025, compared to $4 trillion in tokenized bank deposits. Regulators and industry leaders express mixed views, with the Bank of England relaxing restrictions but imposing a £40 billion issuance cap. Coexistence, not replacement, appears the likely outcome.
Stablecoins have long been considered the “cash” of cryptocurrency markets, providing a means of trading Bitcoin and transferring liquidity without leaving the blockchain. Traditional consumers are now embracing stablecoins, with regulators introducing frameworks and payment giants integrating stablecoin rails.
Traditional cross-border payments still depend on pre-funded nostro accounts and correspondent banks, making transfers costly and slow. Stablecoins complete transfers in seconds and operate 24/7, without the need for correspondent banks or pre-funded accounts.
Major payment companies are adopting stablecoins. Mastercard agreed to buy BVNK for up to $1.8 billion, Visa’s stablecoin settlement volume reached a multi-billion-dollar annualized run rate, and Stripe incorporated Bridge into its payment system. These moves show that banks are not being replaced by stablecoins, as stablecoins do not offer credit creation, lending, or deposit insurance.
According to McKinsey, stablecoin payments totaled about $400 billion in 2025, while tokenized bank deposits transfer about $4 trillion yearly. Only 15% of every $1,000 converted into USDC or USDT returns to banks as reserves, explaining why banks are tokenizing deposits. This prompted the Bank of England to relax its planned restrictions on stablecoins.
Shantnoo Saxsena, CEO of Encryptus, noted that the Bank of England’s decision to remove individual ownership caps and lower reserve requirements is a welcome step, but the £40 billion issuance limit suggests policymakers are still focused on the wrong risk. “A £40bn cap on sterling stablecoins may sound generous, but it effectively keeps the infrastructure at pilot scale while dollar stablecoins issued elsewhere are already supporting real remittance flows.” Pablo Hernández de Cos, General Manager of the Bank for International Settlements, stated that if widely adopted in their current form, stablecoins would pose policy challenges in credit provision and monetary policy.
Maksym Sakharov, CEO of WeFi, argued that stablecoins are putting pressure on the weakest parts of cross-border infrastructure, including delayed settlement and too many intermediary steps. Jamie Dimon, CEO of JPMorgan, expressed skepticism about why anyone would choose a stablecoin over traditional payment methods, though JPMorgan will operate both its own deposit token and third-party stablecoin rails.
The stablecoin market cap has reached $312 billion, with Circle and Tether controlling about 85% of the supply. This surpasses the reserves of 95 countries. Sakharov added that real adoption is visible when stablecoins solve repeated financial problems for freelancers, companies, and treasuries. The rise of the stablecoin market is more likely to result in coexistence rather than replacement of banks.
