Stablecoins in business banking are moving from a niche in crypto and digital assets to the center of mainstream financial debate. What began as a price‑stability tool for crypto traders is now being reimagined for cross‑border settlements, liquidity management, and corporate treasury with transaction volumes in the trillions, still largely crypto‑native today but with a fast‑growing share from cross‑border payments and treasury use.
Reflecting this rapid expansion, Citi’s 2024 “Stablecoins 2030” report forecasts total issuance to reach $1.9 trillion in its base case and $4.0 trillion in its bull case – a sharp upward revision driven by accelerating institutional adoption and new regulatory clarity worldwide.
Their appeal lies in offering the transactional efficiency of digital assets without the volatility that typically comes with them – bridging the gap between traditional money and blockchain-based finance. But it’s in business banking that their potential impact is most disruptive.
Stablecoins challenge long-held assumptions about how money moves between firms, how balances are held, and even what constitutes a “bank account” in a digital-first world. For financial institutions, they’re not just another new payment rail – they represent a fundamental shift in how value is stored, transferred, and programmed across global business ecosystems.
The Evolution
When Bitcoin was introduced in 2009, it marked the beginning of a new era in finance – the idea that money could exist independently of governments and banks. Bitcoin was the first cryptocurrency, a digital and decentralized form of money that operated on a public blockchain, allowing users to transfer value directly without intermediaries.
In the years that followed, new cryptocurrencies emerged – most notably Ethereum in 2015, which introduced smart contracts, enabling programmable transactions and decentralized applications. Together, these developments expanded the landscape of digital assets, a broad category encompassing cryptocurrencies, tokenized assets, and blockchain-based applications.
However, volatility has always been a defining feature of cryptocurrency markets – not just in their early days, but throughout their evolution.
- Digital assets such as Bitcoin, Ether, and thousands of other cryptocurrencies can still rise or fall by double-digit percentages within a single day.
- That volatility makes them attractive for speculators and investors, but impractical for commerce, payroll, or savings, where stability is essential.
- Unlike traditional currencies, their value isn’t anchored to any underlying reserves or central authority, but instead driven by market sentiment, liquidity cycles, and global risk appetite.
This volatility created a critical gap: while cryptocurrencies proved that digital, decentralized money could exist, they were too unstable to function as a reliable medium of exchange or store of value. The crypto ecosystem needed a stable unit to trade, settle, and store funds without constantly reverting to traditional currencies like the U.S. dollar – and that gap gave rise to stablecoins.
The Emergence of Stablecoins
Stablecoins were designed to bridge that gap – digital tokens that combine the transactional efficiency of crypto with the price stability of fiat money. They are a subcategory of digital assets that:
- Operate on the same blockchain infrastructure as cryptocurrencies like Ethereum.
- Anchor their value to traditional assets such as cash, bank deposits, or short-term government securities.
- Allow users to transfer and store value globally with the speed, transparency, and programmability of crypto – but without exposure to wild price swings.
The first widely adopted stablecoin was Tether (USDT), launched in 2014. It was issued by a private company and backed by a mix of cash, bank deposits, and short-term assets held with financial institutions. Tether quickly became a digital-dollar substitute for traders, allowing them to move liquidity between exchanges instantly without exiting the crypto ecosystem.
As the concept matured, more regulated and transparent alternatives appeared – most notably USD Coin (USDC), which together with Tether now accounts for roughly 90% of the global stablecoin market (although some latest information indicates a gradual decline in their combined share as new issuers emerge) Both are pegged 1:1 to the U.S. dollar but differ in their structure and disclosure practices:
- Tether (USDT) remains the largest by circulation and is widely used for global liquidity and settlement, though it has faced scrutiny over reserve transparency and disclosure practices.
- USD Coin (USDC), launched in 2018 by Circle and Coinbase, is also backed by cash and short-term U.S. Treasuries and is generally regarded as more transparent and regulatory-aligned, making it popular with institutional users.
Other models soon followed, expanding the landscape further:
- 2019 – DAI: introduced by MakerDAO, a decentralized stablecoin that maintains its value through over-collateralized digital assets managed by smart contracts – self-executing blockchain programs that automatically adjust supply and collateral to keep the price near one U.S. dollar.
- 2022 – TerraUSD (UST): an algorithmic stablecoin that aimed to maintain its peg through an arbitrage mechanism with its sister token LUNA. It collapsed during market turmoil, highlighting the systemic risks of unbacked algorithmic designs.
- 2023 – PayPal USD (PYUSD): one of the first stablecoins issued by a major global payments company, marking the entry of established financial players into the space.
Today, hundreds of stablecoins exist across multiple blockchains and currencies, but USDT and USDC dominate both circulation and transaction volumes, together accounting for around 90% of the global market. Almost all stablecoins – close to 99% by total market value – are pegged to the U.S. dollar, reflecting the dollar’s central role as the world’s reserve and settlement currency.
- The dominance of the dollar in international trade and finance makes it the most practical reference unit for cross-border transactions.
- Dollar-backed stablecoins also benefit from deep liquidity and universal acceptance across exchanges, payment networks, and DeFi protocols.
- As a result, these “digital dollars” have become the de facto standard for on-chain value transfer, shaping expectations for transparency, convertibility, and integration with traditional financial systems worldwide.
Stablecoins in Focus
Stablecoins have never been entirely invisible. Over the past few years, they have been at the center of several defining moments – from the collapse of algorithmic stablecoins such as TerraUSD in 2022 to brief de-pegging episodes amid banking volatility in 2023.
These episodes drew regulatory and media attention, revealing both the potential and vulnerabilities of this emerging form of digital money. More importantly, they signaled that stablecoins had grown large, interconnected, and economically significant enough to matter beyond the crypto ecosystem.
Today’s intensified focus is not the result of a single event but of several structural shifts that have made stablecoins strategically relevant to the future of payments and banking.
- Stablecoins have grown from a niche settlement tool into a global financial mechanism processing trillions of dollars in transactions each year. While the majority of this activity still takes place within the crypto economy, their continued use through multiple market cycles shows real, sustained demand beyond speculation. At this scale, stablecoins are no longer viewed as a technical experiment but as financial infrastructure, increasingly integral to discussions on liquidity, settlement, and cross-border value flows.
- As stablecoins reached meaningful scale, they inevitably attracted regulatory focus. For years, their legal status remained undefined – too significant to ignore, yet outside the perimeter of traditional supervision. That changed in July 2025, when the United States passed the GENIUS Act, the first federal law tailored to payment stablecoins. The Act set clear standards for who may issue, how reserves must be held, and what transparency and redemption rights apply, creating a consistent framework for oversight. This clarity matters: it builds trust, legal certainty, and institutional confidence, allowing banks, payment providers, and corporates to integrate stablecoins safely into financial operations. The GENIUS Act marked the moment stablecoins entered mainstream financial governance, and it sits alongside a wave of global regulatory initiatives – from the EU’s MiCA to frameworks emerging in Singapore, the U.K., Hong Kong, and the Gulf. While MiCA introduces a more prescriptive and compliance-heavy framework for issuers operating within the EU, the U.S. approach under the GENIUS Act is viewed as comparatively more flexible and innovation-oriented. Given that the vast majority of stablecoins are U.S. dollar-denominated, the GENIUS Act carries greater global importance – influencing how stablecoins are issued, managed, and regulated across markets. Together, these developments point toward a future of defined, supervised issuance as stablecoins become part of the formal financial system.
- Growing demand for U.S. dollar exposure has been a powerful catalyst. In markets facing inflation or currency controls, stablecoins offer a simple way to hold and transfer dollar value digitally. They have effectively digitized dollarization, extending access to the world’s reserve currency through open, borderless networks.
- Higher interest rates have turned stablecoin reserves – cash and short-term U.S. Treasuries – into yield-bearing assets. This has drawn policy attention to how reserves are managed and disclosed, linking stablecoins more closely to the short-term funding ecosystem and reinforcing their macroeconomic relevance.
The Impact of Stablecoins in Business Banking
As stablecoins mature, their impact is shifting from the digital-asset economy to the core functions of business banking. The same qualities that made them indispensable for on-chain trading – speed, transparency, and 24/7 settlement – are now being tested in corporate environments where efficiency, control, and liquidity matter most.
What’s emerging is not a new speculative market, but a new operating layer for money movement – one that enables real-time settlement, automated workflows, and programmable financial logic. These capabilities are beginning to influence how businesses manage liquidity, fund operations, and interact with banks across global networks.
1. Cross-Border Settlements and FX Efficiency
Stablecoins allow funds to move across borders instantly and at minimal cost, bypassing the delays and fees of correspondent banking. Instead of routing payments through multiple intermediaries, companies can settle transactions directly and in real time between digital wallets, with full visibility and traceability.
For businesses operating across multiple markets – from logistics and manufacturing to digital services – this offers faster settlement cycles, simpler reconciliation, and greater control over FX exposure, since they can hold digital dollars and convert only when needed.
2. Liquidity Management and Intraday Funding
Traditional liquidity systems operate within the constraints of banking hours, cut-off times, and settlement windows. Stablecoins move continuously, 24/7, allowing treasurers to shift funds instantly between entities, subsidiaries, or trading venues.
This real-time flexibility enables more efficient intragroup transfers, margin calls, and collateral movements, reducing idle balances and freeing trapped capital. For banks, it also opens new opportunities to support clients with on-chain liquidity and settlement services that operate around the clock.
3. Corporate Treasury and Automation
For corporate treasurers, stablecoins are emerging as a digital cash equivalent – usable for payments, collections, and automated sweeps. Because they exist natively on programmable infrastructure, they can embed business logic into transactions: for example, paying a supplier automatically once goods are delivered or updating accounts the moment a transfer occurs.
This automation reduces reconciliation effort, eliminates manual steps, and enhances visibility over cash positions. As adoption matures, stablecoins could evolve from a tactical payment tool into a strategic treasury instrument, streamlining how working capital is managed across complex corporate structures.
4. From Stablecoins to Tokenized Deposits
The evolution doesn’t stop with privately issued stablecoins. Their success has accelerated the concept of tokenized deposits – digital representations of commercial bank money recorded on blockchain networks. Unlike stablecoins, which are issued by non-bank entities, tokenized deposits are created and redeemed directly by banks, fully backed by customer funds.
They combine the instant settlement and programmability of blockchain with the security and regulation of the banking system. A tokenized deposit can be used for programmable transactions – for instance, releasing funds when a contract milestone is reached or splitting a payment across multiple parties automatically.
In this model, stablecoins and tokenized deposits coexist: the former providing open-network interoperability, the latter offering regulated on-chain cash. Together, they point toward a future where business money is not just digital but intelligent – able to move, verify, and act within financial workflows.
Looking for practical next steps? Explore TreasurUp’s Stablecoins Strategic Playbook for Banks (2025) to see pilots, controls, and implementation roadmaps.
Banks’ Challenges and Opportunities
For banks, stablecoins represent both a competitive challenge and a structural opportunity. Their growing use in cross-border payments, liquidity management, and treasury operations is setting new standards for speed, transparency, and control – areas where conventional banking infrastructure often struggles to keep pace. Banks cannot afford to remain on the sidelines. As stablecoin adoption accelerates, the networks and platforms that enable these transactions are positioning themselves between banks and their corporate clients, capturing activity that was once the foundation of business banking relationships.
Stablecoins directly target areas long dominated by banks – payments, settlement, and liquidity management – by offering faster, cheaper, and always-on alternatives. This creates a margin and relevance challenge. When corporates can settle cross-border obligations in minutes using digital dollars, the traditional correspondent banking model begins to look slow, costly, and opaque.
Each stablecoin transaction that bypasses a bank represents more than lost fee income; it erodes visibility into client cash flows, trade activity, and liquidity positions – the information core of relationship banking. Over time, this loss of data and balance connectivity risks diminishing the bank’s role as the primary hub for corporate financial operations.
The rise of non-bank payment platforms and digital asset networks compounds this threat. These actors are embedding stablecoin-based payments directly into digital ecosystems – marketplaces, supply chains, and fintech platforms – creating new channels for value transfer outside bank-controlled infrastructure. In effect, stablecoins are compressing the distance between corporate treasuries and settlement networks, reducing banks’ traditional intermediation role.
Yet these structural shifts make it clear why banks cannot afford to stay out of this game. The infrastructure emerging around stablecoins – programmable, transparent, and real-time – is quickly becoming the foundation for how value moves in digital commerce. Remaining on the sidelines would mean ceding the transaction layer that underpins corporate relationships. But participation is not just defensive. The same technologies that challenge traditional banking also give banks the means to redefine how they deliver trust, liquidity, and settlement in a digital economy.
Several strategic pathways are emerging:
- Issuance and custody: Banks can issue tokenized deposits – digital representations of customer balances held on blockchain – offering the same settlement benefits as stablecoins while remaining fully within the regulatory perimeter. They can also provide secure custody for corporate clients using approved stablecoins, ensuring institutional-grade governance and risk management.
- Settlement and infrastructure services: Banks can act as trusted gateways between fiat and digital money, facilitating conversion, screening, and compliance. This positions them as essential intermediaries in an increasingly multi-rail payments environment, bridging regulated and open networks.
- Treasury and liquidity innovation: Real-time, programmable settlement enables banks to offer 24/7 liquidity solutions, automated intraday funding, and on-chain cash management – services that enhance visibility and operational efficiency for corporate treasurers.
Design a bank‑grade stablecoin program. See governance, controls, liquidity models, and tokenized‑deposit options in our 2025 Strategic Playbook for Banks.
Banks’ New Role
The transformation underway is not about replacing banks but about redefining their function – from intermediaries of funds to orchestrators of value. Stablecoins are establishing a new operational benchmark for transaction speed, transparency, and automation. The real question is how quickly banks can adapt their infrastructure and governance to meet that standard without compromising stability and trust.
More fundamentally, stablecoins are prompting the financial system to treat money as infrastructure rather than a product. When value moves instantly across networks, the boundaries between payments, liquidity, and data begin to blur. Finance becomes more embedded – integrated directly into the flows of trade, supply chains, and digital platforms.
In this environment, banks that remain central will be those able to embed trust, compliance, and intelligence within these new transaction frameworks. Stablecoins are not an endpoint but a catalyst – one that is accelerating the modernization of business banking and reshaping how financial institutions create value in a digital economy.
Turn stablecoins into your competitive advantage. Contact us to schedule a demo and explore how leading banks use dollar‑pegged stablecoins for faster cross‑border settlement, 24/7 liquidity moves, and programmable treasury operations in business banking.
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