Stablecoins might not be the most exciting crypto instrument ever invented but they’re by far the most useful. What began as a fringe use case for exchanges struggling to secure long-term fiat onramps has evolved into a global payments system that puts every other crypto sector in the shade and is outpacing even traditional giants in transaction volume.
In 2024, stablecoin transfer volumes hit an astonishing $27.6 trillion, surpassing the combined volumes of Visa and Mastercard by almost 8%. Who’d have predicted that a decade ago? This remarkable stat attests to the suitability of stables to serve as fast, low-cost alternatives to legacy payment networks, processing settlements in seconds rather than days.
Yet, despite this dominance, stablecoins remain very much a crypto thing. Within mainstream finance, they’re a fringe attraction at best, hindered by infrastructure gaps that prevent them from becoming everyday financial instruments.
That’s not the only challenge keeping stables on the sidelines, admittedly: the need for regulatory clarity, robust compliance mechanisms, and greater privacy protection are also critical missing pieces.
If these components can be slotted into place, the divide between web2’s traditional financial systems and web3’s decentralized alternative will be finally bridged, making stablecoins the world’s de facto unit of account – and all powered by blockchain networks.
Should this occur – and the sheer practicality and “normality” of stables makes them the onchain sector most likely to succeed – they’ll simultaneously serve as a Trojan horse for other web3 verticals, normalizing blockchain for enterprise and consumer use cases of all kinds.
Stables Find Their Footing in a Fiat World
Pegged to fiat currencies like the U.S. dollar or euro, coins like Tether (USDT) and USDC offer a stability absent in volatile cryptocurrencies, making them ideal for everything from cross-border payments to DeFi transactions.
Mastercard itself recently acknowledged this shift, having tokenized 30% of its own transactions last year and nodding to crypto’s disruptive potential. But volume alone doesn’t equate to adoption.
Stablecoins thrive in crypto-native ecosystems, yet their penetration into everyday commerce, be it payroll or retail, lags, constrained by structural and legal hurdles that traditional payment networks have long navigated.
A primary barrier is regulatory ambiguity. The Bank for International Settlements (BIS) highlights in its 2025 report that stablecoin issuers face a patchwork of rules – and in some cases a complete absence of them – across jurisdictions.
In the U.S., agencies such as the SEC and CFTC debate whether stablecoins are securities or commodities, while the EU’s Markets in Crypto-Assets (MiCA) framework, which came into effect from 2024, imposes strict reserve and auditing requirements.
There are signs, at least, that greater clarity is coming to crypto markets on both sides of the pond, as US policymakers make clearer stablecoin regulation a priority. In Europe, however, MiCA appears to be a mixed blessing for the stablecoin issuer, with issuers expected to custody deposits in domestic banks, among other onerous measures.
This uncertainty spooks traditional financial institutions, wary of integrating assets that could trigger unforeseen liabilities. A previous Congressional Research Service report noted that without harmonized guidelines, issuers struggle to assure banks and regulators of their stability, especially after high-profile failures like TerraUSD eroded trust.
For stablecoins to rival Visa in terms of unique users, they need a clear rulebook that allows them to play in a fiat world.
Blockchain’s Double-Edged Sword
Privacy is another sticking point. Stablecoin transactions, logged on public blockchains, offer transparency but expose user data to scrutiny, a natural deterrent for privacy-conscious firms and individuals. It’s these very same concerns that have stymied CBDCs, the US recently becoming the most prominent nation to have called an indefinite timeout on the proposal.
Unlike Mastercard’s closed-loop system, where data is shielded by proprietary controls, blockchain’s openness invites risks ranging from regulatory overreach or exploitation by bad actors. Yet absolute privacy isn’t viable either; regulators demand traceability to combat money laundering and fraud.
BIS data shows illicit stablecoin flows dropped to 0.3% of volume in 2024 from 0.5% in 2023, thanks to better monitoring, but the tension persists. Stablecoins need infrastructure that threads this needle by offering privacy without anonymity; compliance without exposure.
There are, mercifully, signs that this privacy paradox is being addressed. Concordium’s onchain identity verification layer, for example, uses zero-knowledge proofs to verify user identities while masking sensitive details, aligning with MiCA and similar frameworks. Unlike most public blockchains, where pseudonymity reigns, Concordium embeds compliance at the protocol level.
Issuers like Membrane Finance, with its EUROe stablecoin, leverage this to assure regulators of user legitimacy without compromising privacy. As such, Concordium is positioned as a bridge between web2’s blanket KYC and web3’s user-sovereign ethos.
ID layers that allow tokenized assets to interact with the traditional financial world while maintaining user privacy could be the stablecoin breakthrough that makes life easier for issuers and regulators alike.
Making Stablecoins Stronger
Their price might remain constant, but for stablecoins to achieve genuine mainstream adoption, they’ll need to significantly grow their current market cap and volume. And to achieve that, there are a few things that need to fall into place.
Ultimately, they need the infrastructure that can not only scale from a technical perspective but from a legal one too, preserving blockchain’s inherent strengths while adhering to the financial regulations that govern existing global payment systems.
Regulatory clarity tops the stablecoin wishlist: a global framework, perhaps modeled on MiCA’s better rules, could standardize reserves, audits, and redemption rights, easing the hesitancy of banks to embrace tokenized dollars.
Compliance mechanisms that can strike a balance between privacy and verification must also be widely adopted, both within crypto and legacy finance, integrating with payment rails like SWIFT or FedNow.
The stablecoin sector is still trying to find that Goldilocks Zone where privacy protections are just right, be it through encrypted sidechains or ZKP-based ledgers that shield data yet satisfy AML rules. The $27.6 trillion in settlement stables racked up last year is a testament to what they’re capable of, outmuscling Visa and Mastercard in raw throughput.
Yet mass adoption hinges on trust, not just transactions. Enterprises signal a readiness to engage if these risks can be tamed. Build the right rails, and stablecoins could redefine the way the world moves money, not just in crypto hubs but across the world’s financial arteries. The total addressable market is enormous. But the challenges that must be solved for that to happen are significant, albeit surmountable.
We’ve passed the era of governments trying to outright ban stablecoins. We’re now in the acceptance phase, a precursor to the mass adoption web3 has always dreamed of. If any blockchain industry makes it to prime time, surely, it has to be stable.
